Starbucks completes issuance of $1bn Sustainability Bond

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Starbucks Corporation has completed the issuance of a $1 billion Sustainability Bond, which is the third and largest Sustainability Bond Starbucks has issued to date.

The funds will support ethically sourced coffee including purchase of coffee that is verified by Coffee and Farmer Equity (C.A.F.E.) Practices; the continued development and operation of Farmer Support Centres and research and development centres in coffee-growing regions around the world, as well as new and refinanced loans to coffee farmers made through Starbucks Global Farmer Fund.

The bond will also help fund the company’s Greener Retail commitments, including its Greener Stores initiative to design, build and operate 10,000 Greener Stores globally by 2025.

“The bond demonstrates Starbucks commitment to meaningful, continual progress toward our aspiration of sustainable coffee, served sustainably. It also illustrates a trend toward heavier interest from investors in our socially and environmentally focused projects – in this case supporting coffee farmers and leading in green retail,” said Patrick Grismer, CFO of Starbucks.

Grismer added that Starbucks leadership in social and environmental responsibility “is a defining element of who we are as a company. Our intent is that, by issuing a Sustainability Bond, we’re providing investors an opportunity to participate in our sustainability efforts, and our hope is that this inspires others to pursue more sustainability-related investing opportunities.”

Bond Sustainability

According to Sustainalytics, which provided a Second-Party Opinion on the bond, Starbucks has aligned its Eligible Sustainability Projects in the new bond with the priorities outlined in the U.N. Sustainable Development Goals, established in 2015, as well as with the 2018 Sustainability Bond Guidelines (SBG).

“We applaud Starbucks efforts to broaden its social and environmental programs and to align its eligible projects with the U.N. Sustainable Development Goals,” said Heather Land, executive director of Sustainalytics’ Sustainable Finance Solutions team. “In addition, Starbucks inclusion of its Greener Retail initiative is a meaningful addition to its Sustainability Bond.”

“Morgan Stanley is proud to support Starbucks in their third and largest Sustainability Bond in three years, and their continued commitment to the U.N. Sustainable Development Goals,” said Audrey Choi, Chief Sustainability Officer at Morgan Stanley, which acted as the Sustainability Structuring Agent and a joint book-running manager on the transaction.

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