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Warehouse Group’s $70m Westpac loan ties interest to sustainability path

The Warehouse Group has adopted five “ambitious, innovative and forward-thinking targets” to achieve in a $70 million sustainability loan agreed with Westpac NZ. If it fails, a higher interest rate will be charged. 

The two-year loan facility, which is extendable, includes pledges relating to sustainable packaging, carbon emissions and gender equality. 

“Kiwis care about the environment, and our customers want to know that the way we source, package and ship the products they buy from us is ethical and sustainable,” said The Warehouse Group CEO Nick Grayston. “Under these new loan conditions, we will be strengthening that commitment.” 

Such targets, he said, are important for TWG with its extensive retail presence and complex global supply chain.

“We’re committing to sustainable packaging to ensure that more of our packaging is compostable or recyclable at kerbside or in-store. We are also committing to annual greenhouse emissions reduction targets across the group. This will help us achieve our science-aligned target to reduce our Scope 1 and 2 emissions by 42 per cent by 2030.

“Likewise, this loan recognises the performance of our ethical sourcing practice. It also incentivises better traceability across our supply chain to help ensure the products we sell are created in a way that treats workers and the environment ethically,” said Grayston.

Under the packaging commitment, The Warehouse and its subsidiary Warehouse Stationery have committed that by FY25 (from a baseline of 11 per cent), at least 50 per cent of private label sales must be derived from products with sustainable packaging that is compostable, or recyclable at New Zealand kerbside or in-store. 

On ethical sourcing, the two retail chains have committed to the stricter tracing of textile, wood and paper used by private label suppliers, by 2025, while the third target ensures greenhouse gas emissions are reduced in line with a 1.5-degree Celsius science-aligned trajectory by at least 5 per cent each year of the loan, against an FY20 baseline.

Under the remaining two targets, the company has committed that by FY25 it will achieve 100-per-cent pay equity across its overall workforce and that its board, executive team, or those who directly report to the executive team, comprise 50 per cent of women.

Westpac NZ’s head of sustainable finance, Joanna Silver, says TWG’s commitments demonstrate the company is taking a holistic approach and is showing how seriously it takes its sustainability goals.

For its part, Westpac NZ wants to support Aotearoa’s transition to “a resilient, net-zero economy for the benefit of all New Zealanders” and has made a commitment to facilitate $10 billion in sustainable finance by 2025.

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