Co-op ties £400m credit facility to sustainability and diversity goals
The Co-op has announced a five-year extension to its £400 million sustainability-linked revolving credit facility, a move that ties the cost of borrowing to ambitious environmental, social, and governance (ESG) targets.
This innovative approach reflects a growing trend of integrating sustainability into corporate finance and highlights Co-op’s commitment to reducing carbon emissions, cutting food waste, and improving diversity within its management team.
The facility, supported by six major banks including Barclays, Lloyds, and Santander, will run until November 2029, providing liquidity to support the Group’s growth strategy while aligning with its sustainability commitments. These include reducing supply chain emissions, halving food waste by 2030, and achieving representation in management that mirrors UK population demographics.
Rachel Izzard, CFO at Co-op, said: “The successful extension of our credit facility out to 2029 underscores the improved financial position of our Co-op, the balance sheet strength we now have to fuel our sustainable profitable growth ambitions, and the collective confidence in our ongoing financial resilience. As a Co-op we are here to create sustainable value for our more than 6 million active member-owners and the communities in which we operate and source from.”
The extended facility links borrowing costs to clear targets, including enrolling 79% of suppliers in the Science Based Targets initiative by 2030 (up from 47%) and reducing nearly 650 tonnes of food waste annually. Efforts include partnerships with suppliers, embedding sustainability goals in contracts, and supporting farmers to reduce emissions from production.
Diversity also takes centre stage, with a new metric introduced to align the proportion of women and ethnic minorities in management with UK population data. This builds on the Co-op’s history of championing representation, with female leadership across its CEO, CFO, and board chair roles.
Izzard added: “It is wonderful, and true to our Co-op heritage and values, to be able to weave our social value commitments into our longer-term funding strategies. I would like to personally thank our partner banks for their shared commitment in supporting these important areas, which matter so much to our member-owners.”
The Co-op also remains focused on reducing food poverty, committing to halve food waste by 2030 and contributing to redistributing surplus food through partnerships with organisations like FareShare and The Trussell Trust. These efforts complement its broader sustainability goals, ensuring the Group not only leads in sustainable retail but also actively supports vulnerable communities.
This extension demonstrates how sustainability can be embedded into corporate finance, providing a blueprint for other organisations while reinforcing the Co-op’s role as a leader in environmentally and socially responsible business practices.
