Dunelm announces £185m sustainability-linked credit facility

UK homewares retailer Dunelm has agreed and signed a £185 million sustainability-linked unsecured revolving credit facility (RCF) from Barclays, Lloyds Bank, NatWest, Santander, London Branch, and Credit Industriel et Commercial.

The facility has an initial term of four years, which may be extended by a maximum of a further two years at Dunelm's request, subject to lender consent.

The RCF incorporates four sustainability-linked performance targets which align with the retailer’s sustainability plans, including:

·50 per cent reduction in Dunelm's greenhouse gas emissions by 2030 against a 2019 base, in line with the Science Based Targets Initiative 1.5 degrees scenario;

·All own brand cotton products to meet Dunelm's "More Responsibly Sourced" standard by 2025;

·20 per cent reduction in plastic packaging of own brand products by 2024; and

·Provision of a customer take-back service for 50% of its products by 2024.

Dunelm's performance against the sustainability performance targets will be verified by an independent external assurance provider and published in the Group's annual report.

Dependent on performance against the targets, there will be a 2.5bps premium or reduction to the base margin.

The RCF is Dunelm's first sustainability-linked loan facility and replaces the Group's existing RCF, which was due to expire in March 2023.

"Our sustainability plans have already taken a big leap forward as we continue to pursue our ambition of being sustainable in everything we do,” said Laura Carr, Dunelm chief financial officer. "We are delighted to further demonstrate our commitment with this new sustainability linked revolving credit facility, which is clearly aligned to our Net Zero Pathway.”

Carr added: "We appreciate the support of our banking partners and their alignment with our sustainability ambitions."

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