M&S signs new £850m loan linked to Plan A net zero targets

M&S store exterior
M&S has signed a new £850m RCF linked to sustainability targets, highlighting a focus on meeting its Plan A roadmap to net zero.
// M&S has signed a new £850m sustainability loan linked to Plan A net zero targets
// Lower interest rates are linked to M&S delivering its net zero scope 3 target by 2040

Marks & Spencer has signed a new £850m revolving credit facility linked to sustainability targets, in a move which highights the retailer’s focus on meeting its Plan A roadmap to net zero.

In a first for the retailer, the sustainability-linked loan will see M&S benefit from lower interest rates when it delivers measurable improvements in its environmental impact.

Following the reset of the Plan A programme in September, the terms of the new credit facility are aligned to the retailer delivering its net zero scope 3 target by 2040.

The ambitious Plan A roadmap requires M&S to achieve full net zero in 2040, ten years ahead of the government’s UK-wide strategy. It will also require rapid decarbonisation of the business as it aims to cut its carbon footprint by a third by 2025, from a 5.7million tonne 2017 baseline.

The retailer has come to an agreement with BNP Paribas for the £850m revolving credit facility, which will run to June 2025, which will see the retailer being measured against four sustainability metrics.

The chosen metrics – zero deforestation, sustainable fibre sourcing, packaging reduction, and reducing property emissions – span the M&S value supply chain to best support its net zero goal.

Read more: M&S aims to be fully net zero on emissions by 2040

“In September we shared our roadmap to net zero and reset our longstanding Plan A programme to have a singular focus on delivering this goal across our entire supply chain and products by 2040,” said James Rudolph, group treasurer and M&S colleague carbon champion, in a blog post on the M&S website.

“Hitting this ambitious target would see us reach net zero scope 3 a full decade ahead of Government’s UK wide strategy and will require us to transform how we make, move and sell our products to customers and fundamentally change the future shape of the business.

“This is a first for M&S and brings to life the role finance plays in the move to a more sustainable, lower carbon economy,” he continued. “Put simply, sustainability linked loans like our new credit facility, are designed to reward borrowers for delivering measurable improvements in environmental impact.”

“M&S has been built on a belief that doing right by the planet is not just good citizenship, it’s good business and by putting Plan A at the heart of our financing and investment decisions we can build an M&S that is more resilient and efficient as part of a sustainable future.”

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