Woolworths Group has chosen to create a Sustainability Linked Bond Framework in order to align its sustainability plan with its long term financing strategy.
Woolworths Group cares deeply about its impact on people and the planet, and we want to go further than just minimising harm – we want to create good. This will be done through ongoing improvement of how Woolworths Group conducts its own business, including how it engages its people and the communities in which it operates.
The documents relevant to our Sustainability Linked Bond Framework are set out as below:
A$350m Nov-27, EUR550m Nov-28, A$350m Nov-31 Sustainability Linked Bond Report
Woolworths Group’s target reduction in scope 1 and 2 emissions was validated by the SBTi in 2020. SBTi is an independent global body formed by the United Nations Global Compact, CDP, the World Resources Institute and the World Wildlife Fund for Nature. The SBTi assesses and approves company targets through a scientific lens, ensuring alignment with the Paris Agreement goal of limiting global temperature rise to well-below 2°C above pre-industrial levels, and pursuing efforts to limit warming to 1.5°C.
To align to this goal, Woolworths Group’s current target is to reduce scope 1 and 2 emissions by 63% from a 2015 baseline, by 2030. This is a 1.5 degree-aligned pathway.
Basis of preparation
As per the terms of the Sustainability Linked Bonds and the Sustainability Linked Bond Framework, Woolworths Group is required to annually report progress on its reduction in scope 1 and 2 emissions (expressed as a percentage). Our current target as verified by the SBTi uses a location-based approach for our scope 2 emissions.
Woolworths Group uses an operational control approach to measuring emissions, where we have the primary authority to introduce and implement operating policies. Woolworths Group reports in compliance with the NGER Measurement Determination, NZ Ministry for the Environment - 2022 Emissions Measurement Guide, National Greenhouse Accounts Factors and the GHG Protocol.
Material scope 1 emissions sources include fugitive synthetic refrigerants, transport fuel for company-owned or company-controlled fleet cars and home delivery trucks and natural gas.
Scope 2 emissions are those associated with purchased electricity used across all stores, distribution centres and offices; they comprise the largest part of our operational footprint.
Baseline and restatements
The baseline year used to create the SBTi approved decarbonisation trajectory was F15 and this is the relevant baseline year for the purposes of calculating the percentage reduction in emissions for the Sustainability Linked Bonds.
The F15 baseline as verified by the SBTi has been adjusted to reflect the de-merger of Endeavour Group and acquisition of PFD Foods and Quantium.
Performance against SBTi
Scope 1 and 2 emissions – location-based
F15 - baseline¹
1. SBTi has confirmed that it is appropriate for Woolworths Group to adjust the 2015 baseline to account for organisational structure changes i.e. acquisitions and divestments and that location-based reductions on the adjusted baseline can be counted as progress towards Woolworths Group’s existing Science Based Targets. The F15 baseline has been presented on this basis.
2. In November 2022, the Clean Energy Regular (CER) provided new guidance on the treatment of Australian Carbon Credit Units (ACCU) issued for projects registered with the Emissions Reduction Fund (ERF). As per that guidance, F22 emissions have been revised to include ACCUs issued in that year. Further, F22 emissions associated with stationary refrigerants, transportation refrigerants and home delivery fuel usage have also been revised to reflect improved data tracking.
As per the terms of the Sustainability Linked Bonds, F25 is the first financial year that the Group is required to test against its trajectory to reduce scope 1 and 2 emissions emissions by 63% from a 2015 baseline, by 2030. At the end of F25, the Group will be required to reduce its scope 1 and 2 emissions by at least 42% to meet the target in its A$350m bond, maturing in November 2027.
Context of F23 Group reporting and targets
F23 marked a transition for the Group to include market-based scope 2 electricity reporting (in addition to location-based) which enables us to account for the investment we are making in renewable electricity and our F23 sustainability reporting has been presented on this basis. As at the end of F23, Woolworths has reduced its scope 1 and 2 emissions from the 2015 baseline by 36.4% under a market-based approach.
SBTi target update
In late 2022, in acknowledgement of the complexities of reducing emissions for companies with forestry, land and agricultural emissions, SBTi introduced FLAG (Forestry, Land & Agriculture) Guidance. Woolworths Group is captured by this definition and we intend to update our targets to reflect the FLAG Guidance in F24.
- Sustainability Linked Bond Report independent assurance report (2023)
- Sustainability Linked Bond Report independent assurance report (2022)