Arla green bonds snapped up

By Jim Cornall contact

- Last updated on GMT

Arla has set a climate target of reducing CO2e emissions by 30% in 2030 and has an ambition of becoming carbon net zero by 2050. Pic: Arla
Arla has set a climate target of reducing CO2e emissions by 30% in 2030 and has an ambition of becoming carbon net zero by 2050. Pic: Arla

Related tags: Arla, Sustainability, emissions, Net zero, Milk

Danish-headquartered dairy cooperative Arla has issued its first green bonds to help finance the transition towards a climate friendly future.

Arla has set a climate target of reducing CO2​e emissions by 30% in 2030 and has an ambition of becoming carbon net zero by 2050.

Now, investors are supporting the transition by purchasing green bonds issued by Arla. The SEK 1.5bn ($180m) proceeds from the green bonds will be allocated to green investments within the cooperative.

“Green bonds support our green thinking and is one more step towards a carbon net zero future. As one of the largest dairy companies in the world, we owe it to consumers and climate alike to take responsibility and play our part. As a cooperative we work hard to reduce greenhouse gas emissions across the entire value chain – from farm to fork – and are taking every step possible towards a green future,”​ said chief financial officer at Arla Torben Dahl Nyholm.

He added the decision to issue green bonds is an integrated part of Arla’s financing strategy.

Arla issued a floating rate green bond at the Swedish bond market in Swedish kronor on May 7, 2021, at a credit margin of 0.68%.

“Sweden has a large corporate bond market which, combined with the fact that Arla is a household name in Sweden, makes it very attractive for Arla to utilize this market,”​ Nyholm said.

With asset managers, banks as well as insurance and pension funds in the Nordic countries as primary investors, the bonds were immediately overbooked with banks receiving bids for more than SEK 4bn ($481m) before the issuance was closed at the announced SEK 1.5bn.

The EMTN (Euro Medium Term Note) bond program with a maximum value of €750m ($910m) is registered on the Irish Stock Exchange Euronext Dublin where the bonds are also listed.

The proceeds from the issuance will be used in accordance with Arla’s Sustainable Financing Framework, which is supported by a Second Party Opinion from Sustainalytics. Examples of how the proceeds are allocated include efficient use of biogas, water treatment and recycling, energy optimization on Arla’s 60 production sites as well as climate checks on farms.

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