Warehouse reveals terms of its sustainable loan

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Mon, 8 Nov 2021, 9:57AM
(Photo / NZ Herald)
(Photo / NZ Herald)

Warehouse reveals terms of its sustainable loan

Author
Rahul Bhattarai, NZ Herald,
Publish Date
Mon, 8 Nov 2021, 9:57AM

The Warehouse has signed a $70 million sustainability-linked loan with Westpac. 

Warehouse chief executive Nick Grayston said the group will have to meet five sustainability performance goals including sustainable packaging, carbon emissions and gender targets to receive discounted rates, under the agreed terms. 

The listed retailer and the owner of The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo 7 and TheMarket.co.nz, also has a target to achieve 50 per cent of women in its senior leadership roles and pay equality across all genders. 

The $70m two-year extendible loan financially incentivises the retailer to meet sustainability targets set out over a four-year period, with a higher interest rate on the loan if it falls short of its commitments. 

Grayston said ambitious, innovative and forward-thinking targets are important for the group with its extensive retail presence and complex global supply chain. 

He said his customers want to know the products The Warehouse sold were ethical and sustainable and under these new loan conditions, it would be strengthening that commitment. 

"We're committing to sustainable packaging to ensure that more of our packaging is compostable or recyclable at kerbside or in-store. 

"We are also committing to annual greenhouse emissions reduction targets across the Group. This will help us achieve our science-aligned target to reduce our scope 1 and 2 emissions by 42 per cent by 2030," he said. 

"Likewise, this loan recognises the performance of our ethical sourcing practice. It also incentivises better traceability across our supply chain to help ensure the products we sell are created in a way that treats workers and the environment ethically." 

For sustainable business, diversity and inclusion also played a key part, and the group's goal was to have 50 per cent women in senior positions by the next four years, Grayston said. 

"The loan incentivises The Warehouse Group to achieve two gender goals: diversity of gender, with a target of 50 per cent women in senior leadership by 2025, and gender pay equity for all genders across our whole workforce," he said. 

Westpac NZ head of sustainable finance Joanna Silver said by prioritising gender equality and sustainability goals The Warehouse was serious about bringing positive change. 

Westpac NZ has committed to facilitating $10 billion in sustainable finance by 2025. 

"By agreeing to targets that extend beyond emissions reductions to other key areas like packaging and supply chain, as well as prioritising gender equality, The Warehouse is taking a holistic approach and demonstrating how seriously it takes its sustainability goals," she said. 

"We encourage more businesses to align their sustainability ambition with their financing to help them achieve better outcomes for the environment and communities in Aotearoa New Zealand." 

As part of the loan arrangement, EY provided assurance services over the targets in the loan to ensure it meets the international principles and standards.