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09/10/2021

Walmart issues $2 billion green bond

Dan Berthiaume
Senior Editor, Technology
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Walmart will use proceeds from a $2 billion bond to fund sustainability projects.

Walmart is taking a big step toward financing its sustainability goals.

The discount behemoth has successfully priced its first green bond. Net proceeds from the $2 billion bond offering will be used to fund existing and future sustainability projects.

Over the next few years, Walmart intends to allocate an amount equal to the net proceeds of the $2 billion offering toward a portfolio of eligible green investments that meet certain eligibility criteria within the areas of renewable energy, high-performance buildings, sustainable transport, zero waste and circular economy, water stewardship, and habitat restoration and conservation.

The green bond is part of $7 billion of new senior unsecured notes that the company successfully priced across five-, seven-, 10-, 20- and 30-year tranches.

In September 2020, Walmart released ambitious new sustainability goals, including a zero emissions target across the chain’s global operations by 2040. The retail giant and the Walmart Foundation philanthropy organization are also committing to help protect, manage or restore at least 50 million acres of land and one million square miles of ocean by 2030. 

At the time, Walmart said it would take a number of steps to meet its zero emissions target, including harvesting enough wind, solar and other renewable energy sources to power its facilities with 100% renewable energy by 2035. Also by 2040, the chain plans to transition to low-impact refrigerants for cooling and electrified equipment for heating in its stores, warehouse clubs, and data and distribution centers, and to electrify and zero out emissions from all of its vehicles, including long-haul trucks.

Chief Walmart rival on co-launched a similar initiative, the Climate Pledge, in September 2019, which commits to meet the net zero carbon targets of the Paris Agreement by 2040. But while Amazon plans to neutralize any remaining emissions that may be left after its decarbonization efforts with quantifiable, permanent offsets, Walmart intends to remove all carbon from its global operations without the use of offsets.

Walmart will issue a public report with information on allocation to and estimated impact of the eligible green investments on an annual basis, until an amount equal to the net proceeds of the green bond has been allocated. An outside consultant with recognized expertise in environmental, social and governance research and analysis has issued, and made publicly available, a second party opinion in respect of the alignment of eligibility criteria of the type described above with the Green Bond Principles, and the company’s external auditor EY will provide an assurance report on each allocation report.

Leading the green bond as active bookrunners were four nationally recognized minority- and women-owned firms including African-American and service-disabled veteran-owned AmeriVet Securities, Inc., women-owned C.L. King & Associates, Inc., Hispanic-owned Samuel A. Ramirez & Company, Inc. and African American- and women-owned Siebert Williams Shank & Co., LLC. BofA Securities, Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC also served as active bookrunners on the green bond. BofA Securities, Inc. was the Green Structuring Agent, while Citigroup Global Markets Inc. served as diversity and inclusion coordinator.

Walmart Inc. operates approximately 10,500 stores and clubs under 48 banners in 24 countries and e-commerce websites.