SOUTH AFRICA – Africa’s largest retailer Shoprite, has secured R3.5 billion (US$205m) in loans to be channelled towards expanding its key environmental programmes as part of its wider sustainability strategy.
The financing includes a R2 billion (US$117m) loan from Standard Bank, the banks biggest sustainability loan in the retail sector to date, as well as an R800 million (US$46.8m) sustainability-linked loan.
Another R700 million (US$41m) green loan was obtained from Rand Merchant Bank, a first in the retail sector, with an expected further addition of a sustainability-linked loan.
According to the JSE listed retailer, the funds will go towards investment in renewable energy sources; recycling projects of cardboard and plastic; sustainable packaging including reusable, recyclable and compostable packaging; and driving energy efficiency at its sites including LED lighting, and a monitoring system for refrigeration to reduce energy consumption and waste.
The investment is aimed to give an added impetus to the substantial investments already made by the retailer aimed to achieve net zero-green house gas emissions by 2050, power 25% of operations with renewable energy by 2027, ensure 100% of its own-brand packaging is reusable, recyclable and compostable, and contains on average 30% recycled material content by 2025.
In the previous financial year, Shoprite reduced carbon emission intensity by 3.3% and water use intensity by 7.5% and increased the installed capacity of its solar photovoltaic (PV) systems by 82%.
The supermarket chain store owner also reduced electricity consumption by 150 million kWh through its LED lamp replacement project since inception.
Further to that, it recycled 46 102tons of cardboard from stores and distribution centres, and diverted 10 241 tons of plastic waste from landfills; and paid R2.2 million (US$128,900) in rebates to customers for reusing their Planet bags since inception.
“The loans enable us to continue on the road to reduce our environmental footprint by using more renewable energy and sustainable packaging, and recycling more waste. These environmental programmes are key in our fight against climate change, and we are able to increase the pace and intensity of our actions with these loans,” said Sanjeev Raghubir, Group Sustainability Manager
According to Raghubir, the Group’s record to date has provided funders with demonstrable evidence of the nature and scale of its sustainability projects and ambitions and enabled the retailer to access a preferential cost of funding.
“The loans allow us to continue to make a sustainable, positive environmental impact and improve our operational efficiencies, which in turn result in additional ongoing savings that we can pass on to our customers,” stated Sanjeev.
Announcement of the capital injections follows the roll-out of Shoprite’s largest energy shift, marked by acquisition of more than 100 fuel-efficient trucks dubbed Scania Euro V trucks.
The trucks have a proven fuel saving of around 10% along with lower emissions, forming part of the group’s commitment to reduce its environmental impact.
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