“Bunge’s Sustainability-Linked Loan Pegged to Transparency in Soy and Palm Activity” – Chain Reaction Research – January 17, 2020

On January 17, 2020 Chain Reaction Research reported that “(a)griculture giant Bunge recently announced that it closed its first sustainability-linked revolving credit facility, worth USD 1.75 billion. The new facility agreement links Bunge’s interest rate to its performance on five sustainability targets. These involve cutting greenhouse gas emissions with improved industrial efficiency; increased traceability on its agricultural commodity supply chains; and increased sustainable practices for soy and palm oil. Bunge, as one of the largest agriculture commodity traders, is a major global player in both palm oil and soy, with Brazilian soy as its biggest market. Chain Reaction Research reached out to Bunge for more details about the loan, but did not receive a response. Questions loom about how Bunge’s progress toward its sustainability goals will be measured, how the interest rate will be tied to Bunge’s performance, what the penalties the company will see for not reaching sustainability targets, and how Bunge plans to achieve its sustainability goals in order to keep interest rates low.

With this announcement, Bunge joins its competitors Wilmar (the world’s largest palm oil trader) and Louis Dreyfus Company (a major actor in the Cerrado soy market), both of which receive sustainability-linked financing. More generally, Bunge’s announcement comes amid a broader uptick in sustainability-linked finance.”

You may read the article on the Chain Reaction Research internet site.

You may read a press release about the facility on the Bunge internet site.