The apparel conglomerate, which owns Timberland, The North Face and Vans, announced Tuesday that it will begin offering 500 million euros ($542.7 million) in unsecured senior notes to investors, with the goal of financing projects “designed to contribute” to select Sustainable Development Goals as defined by the United Nations.
The projects include “new, existing and prior” investments in categories that include identifying and developing innovative and more sustainable packaging solutions, developing and constructing renewable energy storage units, improving the energy efficiency of the company’s operations and supply chain, and promoting LEED Gold- or Platinum-rated features in buildings.
VF Corp. says it plans to bankroll projects to help its distribution centers attain “zero waste” status, which it defines as a site that diverts 95 percent or more of its waste away from disposal through recycling, composting and reuse. It also intends to fund projects that improve wastewater quality across its supply chain and promote “natural carbon sinks” designed to create and restore natural sources of carbon capture such as reforestation and regenerative farming, grazing and ranching.
The company is working with Sustainalytics U.S., an independent consultant that specializes in environmental, social and governance research and analysis, to obtain a third-party opinion in connection to the notes. VF Corp. says it will publish annual updates on the net proceeds of the notes, including descriptions of projects funded with the proceeds, and, “to the extent possible,” their environmental impacts on the Sustainability & Responsibility section of its website beginning next year.
The sale of the notes, due 2028, was underwritten by Barclays, Bank of America Securities and Morgan Stanley as joint book-running managers. The notes offering is expected to close on Feb. 25, 2020, subject to customary closing conditions.
Shares of VF Corp. slipped 17 percent last month after it posted lackluster overall third-quarter earnings results, according to data from S&P Global Market Intelligence. The company estimates a full-year revenue of $11.8 billion, down from its earlier guidance of $11.75 billion, said Wedbush analysts.