Budweiser’s APAC arm has taken out one of the most significant sustainability-linked loans (SLL) ever signed in Asia-Pacific.
The SLL, worth USD 500 million and signed with a Bank of China led-consortium, incentivises Budweiser’s Asia-Pacific operations to achieve sustainability targets by providing interest rate discounts.
Interest rates on the loan will reduce if Budweiser can hit pre-determined “sustainability performance targets” in four key areas: reducing carbon emissions, better water usage, increased usage of recyclable packaging, and improved livelihoods for farmers.
According to Bloomberg, in a milestone for the Asian beer industry’s commitment to environmental, social and corporate governance (ESG) goals, the deal is reportedly the largest of its type in the region for a food & beverage firm.
SLLs are among a growing group of financing options, including green loans, that firms can tap to incentivise their ESG performance and play a more significant role in managing climate change.
One of the specific climate action initiatives Bud APAC has announced is for its brewery in Wuhan to achieve carbon neutrality at the end of 2021, which would be the first of its kind for AB InBev globally.
“Budweiser will facilitate green development with carbon neutral beer, and contribute to Wuhan’s green rise with the carbon-neutral brewery,” said Jan Clynser, CEO of Budweiser APAC.
The brewer, Asia-Pacific largest, has also created programs to be more sustainable when it comes to water. It has launched programs to return reclaimed water from its brewing operations to China’s communities and recharge struggling aquifers in India.