Silver Fern Farms Ltd (SFF) has entered into one of New Zealand’s largest sustainability-linked working capital financing facilities (SL Financing) in partnership with a syndicate of lenders.
The Dunedin-based company says the $320 million deal has been carefully tailored to the challenges faced by the red meat industry. The facility will see SFF receive financial incentives as it delivers on sustainability targets linked to its newly-developed Sustainability Action Plan, while equally paying a premium on its lending margin if it does not achieve these targets.
Chief executive Simon Limmer said it is committed to leading food system-change and supporting a just transition to a low carbon economy.
“Our commitment, and follow-through, on sustainability issues is a key way we’re making sure we do the right thing by our customers who increasingly want their red meat sustainably produced and processed,” Limmer said.
“The targets associated with the facilities will hold us to account as we accelerate towards a nature positive business model that incentivises low emissions, biodiverse and regenerative farming practice.”
The SL Financing is provided by ANZ, Bank of China, BNZ, Citibank and Rabobank. ANZ, BNZ and Rabobank, who together acted as Joint Sustainability Coordinators (JSCs) on the transaction, recognised SFF market-leading approach to sustainability.
Rabobank NZ chief executive Todd Charteris said the new facility was one of the first of its type for New Zealand’s red meat processing sector.
As part of the SL Financing, Silver Fern Farms will receive financial incentives as it delivers pre-agreed and pre-defined sustainability targets including: adoption of the comprehensive New Zealand Farm Assurance Programme Plus (NZFAP+) by SFF suppliers; reduction of processing emissions in line with its Science-Based Target initiative (SBTi) target of 42% Scope 1 and Scope 2 Greenhouse Gas emissions reduction by 2030 from 2020 baseline year; reduction of total waste to landfill from processing sites; reduction of water used at processing sites; and enhanced environmental monitoring and reporting.
SFF chief financial officer Vicki McColl said the SL Financing would add another strong incentive for the company to achieve the targets set out in its newly adopted Sustainability Action Plan.
“With the support of the JSCs, we have achieved a Sustainability-Linked financing facility that is customised for the sustainability challenges and opportunities in the red meat industry and one that aligns with international best practice,” McColl said.
Limmer said sustainability-linked financing of this size is a significant step for SFF and emphasises its commitment to respond to the rise of conscious consumers and create new forms of value for farmers.
