Walmart eyes sustainable debt sequel after record green deal

Bloomberg

Walmart Inc is looking to sell more sustainable debt amid pressure for the retail industry to reduce its carbon emissions.
The world’s biggest retailer made its debut in the green bond market in September with a $2 billion offering, the largest ever from a US corporation. The transaction was part of $7 billion bond sale spread across five parts with the green tranche receiving the most demand from investors, according to Kathleen McLaughlin, executive vice president and chief sustainability officer.
McLaughlin said Walmart may sell additional bonds under the environmental, social and governance umbrella later as it focuses on selecting and executing eligible initiatives in the future, but for now the focus is disclosing to credit investors the completion of the projects and their impact on the environment.
“If this goes well, watch this space,” McLaughlin said. “I could see us broadening over time and having other ways to participate in sustainability frameworks on the debt side.”
The Bentonville, Arkansas-based company said separately that it will spotlight particularly healthy or sustainable products with a new “Built for Better” tag on its website as consumer companies from retail giants to PepsiCo Inc rush to satisfy customers who are rethinking the impact of their spending in ways they didn’t before.
For Walmart, that means acknowledging that its famous formula of everyday low prices isn’t enough for a growing number of shoppers.
Corporations and governments globally have sold a record $369.7 billion in green bonds so far this year, compared with $234 billion raised in all of last year, data compiled by Bloomberg show. The record issuance hasn’t stifled the price advantage for borrowers and the bonds are performing better in the secondary market than equivalent debt without the tag on average, according to the
Climate Bonds Initiative. While Walmart believes there was some pricing benefit, that wasn’t its focus for issuing the debt, a company spokesperson said.
Walmart has a median percentile of 51.4 among its
retail peers on environmental issues, according to Bloomberg Intelligence compiled 2019 ESG scores.