Published on 16 April 2018

SUSTAINABLE FINANCE

Danone issues a 300 million-euro pioneer social bond, a first for a multinational corporation

The agribusiness giant has issued a 300 million-euro positive social impact bond. This sum will be used to finance research on food, the emancipation of various populations or the improvement employee protection within the group. This is the first time that a private actor has carried out such an operation.

Dairy project in Merapi: Danone’s rehabilitation of agricultural activity in a disaster-ridden area in Indonesia.
©Thomas Haley/Danone

Danone, one of the largest agribusiness groups in the world (leader in dairy products, and second in bottled water), has issued a social impact bond, called "Social Bond" worth 300 million euros. This is the first time a multinational company has made such an issuance.

This reflects new commitment to sustainable finance led by Emmanuel Faber, the CEO of the social-conscious group. By the end of February, like EDF and Philips, Danone had already announced the introduction of ESG criteria (environmental, social and governance) in its syndicated credit facility, (contracted with several banks) a facility worth 2 billion euros.

Strong demand for social bonds

This social impact bond has attracted investors. While the maximum issue amount was 300 million euros, demand exceeded 700 million euros. 41% of investors served were French, 25% Chinese and 13% German. 50% were asset managers and 25% belonged to banks.

"Our program has generated a lot of interest amongst ESG investors, encouraging us to pursue our ambition in becoming a key player in the food revolution," says Cécile Cabanis, CFO of Danone. The issuance will focus on five objectives: the development of agricultural practices and responsible breeding; the emancipation of populations and social entrepreneurs; medical nutrition research; research in healthy eating; improving health coverage and parental policies for employees.

Sharing with stakeholders

"With this positive social impact program, Danone is once again pioneering the creation of sustainable value and sharing it with all its stakeholders," says Cécile Cabanis. The social bond issued by the company, with 7-year maturity, meets the "Social Bond Principles" criteria established in 2017 by the International Capital Market Association.

They provide for, among other things, the financing or refinancing of social projects, communication to investors on project selection, fund identification and an annual report. The social bond has been validated by the Vigeo Eiris agency.

In 2017, according to Crédit Agricole figures, Social Bonds represented 9 billion euros. Compared to the 130 billion euros raised by Green Bonds, the issuance from these bonds finance projects or activities that benefit the environment. But Social and Green Bonds are just a drop in the global bond market, which totals tens of trillions of dollars.

Ludovic Dupin, @LudovicDupin


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