Maple Leaf lands ‘sustainability-linked’ credit

Canadian food processor Maple Leaf Foods is taking its recently-established sustainability cred to the bank.

The Toronto food firm announced Wednesday it’s the first Canadian company to secure “sustainability-linked terms” for its credit facilities.

Specifically, the company has picked up an unsecured committed revolving line of credit and two unsecured committed term facilities for a total of $2 billion in funding, for a period ranging from this year to 2024.

The credit facilities include an amendment which provides for terms that reduce the interest rate “as key sustainability targets are met.”

Maple Leaf had announced Nov. 7 it would now bill itself as “the first major food company in the world to be carbon-neutral.”

That designation comes from a combination of emissions reduction work, cutting its use of electricity and natural gas, with investments in “independently verified, high-impact environmental projects” throughout Canada and the U.S., such as wind energy, methane recovery and biomass programs, to offset its remaining carbon footprint.

It also announced at that time it has become “one of just three animal protein companies in the world” to set targets approved by the international Science Based Targets Initiative (SBTi).

Maple Leaf in August released its latest annual sustainability report, in which it highlighted work done during 2018 to reduce artificial ingredients and sodium levels and produce meat and poultry raised without antibiotics, as well as “continually advancing leadership in food safety.”

The same report also made note of Maple Leaf having transitioned about 44,000 sows, or 67 per cent of its sow herd, to an open housing system, as well as its plans to move all remaining sows under its management from gestation crates to advanced open sow housing by the end of 2021.

The report also described the company’s work with organizations to reduce food insecurity in Canada, including investment of more than one per cent of Maple Leaf’s pre-tax profit in advancing “sustainable food security.”

Maple Leaf at that time also noted it had already set goals to cut its environmental footprint by 50 per cent by 2025 (including a 20 per cent reduction by next year), calling for “significant” reductions in the company’s energy and water use and solid waste.

By the end of 2018, Maple Leaf said in August, it was “ahead of target in both electricity usage and solid waste” and was developing what it described as “a comprehensive carbon management strategy.”

BMO Capital Markets is sole bookrunner on the credit facilities and acted as a “sustainability structuring agent” working with Maple Leaf to integrate the sustainability targets into the credit facilities, the company said Wednesday.

Co-lead arrangers on the credit facilities were BMO Capital Markets, Scotiabank, RBC, CIBC and Rabobank Canada, Maple Leaf said, with other participating lenders including Bank of America, JP Morgan Chase, National Bank Financial and Toronto Dominion Bank. — Glacier FarmMedia Network