RMB lender and sustainability agent for Shoprite to meet their ESG goals

Client challenge

Shoprite’s strategy aligns with their purpose and values, business objectives and drivers. They make sure to leverage their IT capacity, embed sustainability measuring and monitoring into their business operations and decision-making, and focus on building meaningful partnerships that will help scale the impact of their sustainability projects.

The Group aligns all their operations to its values of doing the right thing; saving to share; and developing local. Their approach to environmental sustainability aligns to these values to ensure cost-savings, efficiencies throughout the value chain, legal compliance and environmental responsibility.

RMB's solution

RMB has partnered with Shoprite to provide a R1.5bn loan facility, which not only aligns to Shoprite’s environmental, social and governance (ESG) targets, but also promotes the implementation of energy efficiency, waste reduction and sustainable packaging initiatives.

The loan facility consists of a R700m green loan (a first for the retail sector) and an R800m sustainability-linked loan, both structured in accordance with Loan Market Association (LMA) green and sustainability linked loan principles (respectively).

The sustainability linked loan is linked to ambitious key performance indicators aligned to Shoprite’s sustainability commitment. This includes 100% of in-store packaging being reusable, recyclable and compostable and 30% recycled by 2025; significant increases in the waste recycling of plastic and cardboard year-on-year through 2024; and the installation of renewable energy (target to have 7.5% of electricity generated by renewable energy by 2024).

Client enablement

Proceeds raised from the green loan will be used to advance key initiatives aligned to Shoprite’s sustainability strategy, including improved energy efficiency, enhanced utilities monitoring, waste reduction and improved refrigeration and temperature control.

Shoprite has committed to ceasing the current, linear make-use-dispose approach to their supply chain. Instead, they are adopting a design-for-sustainability approach based on life cycle thinking. They are also taking this a step further by encouraging greater awareness of the importance of sustainable packaging throughout their supply chain.