B&Q owner’s £550m loan has interest rate linked to carbon reduction targets
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The owner of B&Q and Screwfix has said it will borrow £550m under an agreement that will see the interest rate being cut if it successfully reduces its carbon output.
Under the terms of the new credit facility agreement, which has a duration of three years with the possibility of two one-year extensions, business owner's Kingfisher will benefit from a lower interest rate if it delivers specific carbon targets.
The firm is currently committed to tackling climate change by reducing carbon emissions from its business, products and supply chain.
The target is to deliver 1.5°C science-based carbon reduction targets by 2025 - an enhancement of the previous target which was in line with the reductions required to keep global warming to 2°C.
Kingfisher also plans to create more forests than it uses, thereby reaching 100 per cent sustainable wood and paper for its products by 2025. Its current level is just over 80 per cent.
It first introduced its 'Responsible Business' principles last year with a focus on sustainability and climate change. As part of this, it has opened 12 'zero energy' stores across the UK in recent years.
Bernard Bot, Kingfisher’s chief financial officer, said: “This revolving credit facility shows our commitment to integrate our Responsible Business principles into all aspects of our business.
“Our Responsible Business plan is an integral part of our 'Powered by Kingfisher' strategy and this facility links our ambitious sustainability and community targets with our financing activities.
“We are making great progress with our climate change and community programmes and I look forward to working with all our stakeholders on realising our commitments.”
The firm said it will also work to help more than two million people fix the bad housing conditions they live in, doubling their previous commitment.
The new loan should help it achieve plans to open 50 new Screwfix stores this year across the UK and employ around 600 people to staff them.
The DIY sector saw booming trade in 2020 as the effect of pandemic lockdowns saw many people forced to stay at home and take greater interest in home improvement projects.
Products such as paint, as well as plants, seeds and bulbs grew by nearly 50 per cent year on year in 2020 due to the increased demand.
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