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Standard Bank has partnered with Woolworths Holdings Limited to complete South Africa’s first sustainability-related working capital facility at a cost of R600m.
This partnership is a testament to Woolworths’ commitment to achieving bold sustainability goals and realizing its vision to become one of the world’s most responsible retailers.
This working capital facility structure aligns Woolworths’ financing decisions with its sustainability commitment by combining performance-based reduced interest rates on sustainability performance targets.
As sustainability-related funding links support terms to ESG outcomes, it supports and encourages responsible corporate behavior and shared value creation. The financing structure is also closely aligned with Standard Bank’s own Social, Economic and Environmental (SEE) Impact Framework.
“This agreement is an example of our continued commitment to ensuring that sustainability is at the heart of our business, particularly in terms of working capital, which drives our day-to-day business needs. We are committed to ensuring that all of our debt is ESG-related going forward.”
Woolworths is now 60% of our debt against our sustainability goals. This is our sustainability strategy in action and demonstrates our desire to make a meaningful difference for the greater good of the planet and its people,” said Feroz Kur, Group Head of Sustainability at Woolworths.
A second sustainability-related agreement was concluded with Standard Bank, where the bank acted as a lender and sustainability coordinator to support Woolworths’ initiatives to ensure responsible environmental resource management with key agreed Sustainability Performance Indicators (SPIs). These include Woolworths food, private label fashion, beauty and home goods as well as electricity consumption in corporate stores.
Seamless integration leads to success.
Acting as lead transaction advisory bank through its Corporate and Investment Banking (CIB) and Transaction Products and Services (TPS) divisions, Standard Bank provided seamless ESG funding to support Woolworths’ journey towards achieving their strategic sustainability objectives.
Justin Dunraj, Sector Head of Consumer, Transaction Products and Services at Standard Bank, explains: “This is an exciting deal, the first of its kind for TPS SA.” “As the first ESG sustainability-related agreement, extensive collaboration with internal stakeholders such as our legal, credit- and commercial teams had to develop the necessary ESG principles.”
Kerry Young, Senior Legal Manager: Transaction Products and Services at Standard Bank, the successful completion of this contract, within a short time frame, the unwavering commitment and support of all Standard Bank departments and the client’s strong commitment to this process and a clear vision of what they want to get out of it. Alana Shapiro, Group Treasury Manager at Woolworths, said: “It’s always exciting to work with a dedicated partner team to develop a first-to-market financing product and still have fun.”
Building on a solid foundation
With this pioneering achievement comes proof of Standard Bank’s ability to evolve and exceed new customer needs. Not only did the bank’s CIB and TPS divisions develop its own ESG template to negotiate this deal, but its innovative solution has put it at the forefront of the industry.
“The negotiation process with Woolworths was a true reflection of our partnership and willingness to meet our customers halfway,” said Tania Trosky, Global Transaction Banking Specialist, Standard Bank, Transaction Products & Services. “Going forward, our aim is to replicate similar ESG deals with other clients as we have a strong foundation to work from.”
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