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The European Bank for Reconstruction and Development (EBRD) has invested €25 million equivalent in the inaugural sustainable bond issued by Pepco Group, a leading European discount retailer of homewares, clothing and other products. The bond, initially aimed at a limited pool of professional investors, will be placed on the Warsaw Stock Exchange and The International Stock Exchange as part of a targeted programme of up to PLN 2 billion.
Pepco will use the proceeds to advance its goals of reducing Scope 1 and 2 emissions by 50 per cent by 2030 and Scope 3 emissions by 25 per cent by 2035, while supporting its ambition to achieve net-zero emissions by 2050. Key initiatives that will enable the Group to reach these targets include investing in certified sustainable textiles, purchasing renewable energy, and acquiring or leasing certified green buildings.
The bond was issued under the Group’s Sustainable Financing Framework, which was developed for the purpose of the issuance. It has been assessed externally and aligns with both the International Capital Market Association’s Green and Social Bond Principles and the Loan Market Association’s Green Loan Principles and Social Loan Principles.
The fashion industry accounts for up to 8 per cent of global carbon emissions and is the second-biggest consumer of water. To reach the global net-zero goals called for in the Paris Agreement, industry players must scale up decarbonisation efforts at all levels of the value chain. By committing to climate targets, Pepco is thus supporting the industry’s – and Poland’s – transition to a green economy.
Frederic Lucenet, EBRD Head of Manufacturing and Services, said: “Pepco is a strong player on Poland’s apparel market, and we are proud to support it as an anchor investor in this transaction. We hope this issuance will accelerate the growth of local currency green bonds, helping to deepen Poland’s capital markets and raising market standards for sustainability and governance.”
Andreea Moraru, EBRD Head of Poland and the Baltic States, noted: “This transaction delivers on several key priorities for the EBRD in Poland. It helps a leading player become more competitive, supports Poland’s green energy transition and strengthens its capital markets. We stand ready to help more Polish companies access green capital market financing.”
Willem Eelman, Chief Financial Officer of Pepco Group, said: “The completion of this sustainable bond issuance is an excellent result for the Group. This success of this financing marks a key step in Pepco Group’s green transition, enabling us to accelerate progress towards our net-zero ambitions. The EBRD was a key anchor in achieving this milestone, with its strong participation and 17.5 per cent subscription to the issuance. Attracting an international financial institution to our pool of financing partners underscores the credibility of our sustainability strategy and strengthens our commitment to the relevant environmental, social and governance standards”.
Pepco Group is a leading pan-European discount variety retailer, operating under the Pepco and Dealz brands. Through its core Pepco stores, the Group offers customers a wide range of products at affordable prices, serving millions of customers every week, especially families on a budget. Its fully integrated end-to-end global sourcing operation, PGS, has offices strategically located in Asia and Poland. Pepco Group trades on the Warsaw Stock Exchange (WSE: PCO) and is a constituent of the WSE’s WIG20 index.
The EBRD is among the leading institutional investors in Poland. Since the start of its operations in the country in 1991, the Bank has invested more than €16 billion in Poland across 576 projects. Last year the EBRD invested a record €1.4 billion in the country.