Finland. Kesko Oyj

The loan has been provided to Finnish Kesko Oyj to support its company-wide sustainability transition.

The interest rate margin on the sustainability-linked loan is tied to three key performance indicators (KPIs). The KPIs are part of Kesko’s wider sustainability strategy and are related to its own operations and value chain emissions.

The agreed sustainability KPIs address:

• KPI 1: Reduction of absolute greenhouse gas emissions (GHG) from Kesko Group’s own operations (Scope 1) and from energy purchased and used by the group (Scope 2). The KPI is aligned with Kesko’s science-based targets to decrease absolute Scope 1 & 2 GHG emissions by 90% by 2030 from a 2020 baseline.
• KPI 2: Increase in the share of Kesko Group’s suppliers of goods and services that have publicly set GHG emission reduction targets approved by the Science Based Targets initiative (SBTi). The KPI is aligned with Kesko’s science-based targets that 67% of suppliers and service providers by spend have science-based targets by the end of 2026.
• KPI 3: Reduction of food waste generated in Kesko’s food retail operations (including K-Retailer food stores and Kesko’s own warehouses and logistics) in relation to the total food sold. The KPI is aligned with Kesko’s target to reduce food waste by 50% by 2030 from 2019 baseline.

The climate-related KPIs (1 and 2) have been validated by the Science Based Target initiative (SBTi). KPI 2 is related to Kesko’s upstream Scope 3 GHG emissions from purchased goods and services, which represent approximately 92% of Kesko’s total value chain GHG emissions.

NIB and Kesko have agreed that the climate-related KPIs (KPI 1 and 2) in the loan shall be updated once Kesko has finalised the ongoing process of updating its science-based targets, and after the new targets have been approved by the Science Based Targets initiative.

The target achievements are reported annually, and NIB will follow up the selected key performance indicators with the client.

Kesko operates in grocery trade, building and technical trade, and car trade. Kesko’s net sales total around EUR 12 billion and Kesko employs approximately 18,000 people. Kesko’s chain operations include approximately 1,800 stores in Finland, Sweden, Norway, Denmark, Estonia, Latvia, Lithuania and Poland. Kesko’s shares are listed on Nasdaq Helsinki. Kesko and K-retailers together form K Group. K Group is the leading trading sector operator in Northern Europe and it employs approximately 45,000 people.

The targets set by Kesko fit NIB’s environmental mandate and address material sustainability issues for the company. Kesko’s climate targets will contribute to climate change mitigation, and the science-based targets follow the decarbonisation trajectory, consistent with the aim of limiting global warming to 1.5 °C.