New financing agreement to drive growth and green transition in DLG Group

The DLG Group has signed a new group-wide EUR 1.1 billion credit facility with Danish, German and international banks. The new credit facility covers the entire DLG Group and will run for three years with the option of a two-year extension. The group’s successful efforts to improve its financial ratios, business performance and strategic focus on sustainability, among other things, attracted a great deal of interest from banks in the process of arranging the new credit facility.

“We’re proud of the interest and trust the banks have shown in our business and in our strategy. In recent years, we’ve delivered strong results and improved our financial ratios. This has paved the way for the new financing agreement, which is vital for us to be able to invest in the future growth of our business,” says Group CFO Christina Nielsen.

One of the DLG Group’s strategic ambitions is to commercialise the sustainable solutions of the future. To promote the group’s strategic sustainability efforts and deliver on the ambition of bringing the more sustainable solutions of the future to customers, three key sustainability goals have been linked to the agreement.

More ambitious sustainability goals

In connection with the new financing agreement, DLG has stepped up ambitions by being one of the first agricultural companies in Europe to include a target of reducing indirect emissions from the value chain (scope 3) by 30 per cent by 2030. The UN Science Based Targets Initiative has validated the target as being consistent with the latest climate science and the Paris Agreement.

“It was natural for us to once again link the financing agreement to our sustainability goals and include the scope 3 target, because it represents more than 98 per cent of our total climate footprint. We will make the biggest difference by far in the green transition for our customers, owners and the world around us by maintaining a focus on our value chain,” says Christina Nielsen.

The link to sustainability means that the interest rate on the credit facility can be adjusted upwards and downwards depending on how the DLG Group delivers on the goals. It has been two years since DLG first signed a credit facility linked to ESG targets.

In the process of setting the sustainability goals, DLG has sought the advice of, among others, Rabobank and BNP.

Christoph Fandrich, Managing Director – Senior Coverage Grains & Sugar at Rabobank, stresses the importance of linking the financing agreement to scope 3. 

“With this new sustainability linked loan agreement, DLG once again takes a leadership position in the sustainable finance space. The loan is linked to the DLG’s scope 3 emissions, highlighting the company’s commitment to make real impact in the food and agribusiness value chain. As Rabobank we are proud to have assisted DLG in structuring such an ambitious and front running sustainability linked facility,” says Christoph Fandrich.

In addition to the scope 3 target, the DLG Group maintains the target of reducing CO2 emissions from the group’s own production and logistics as well as indirect emissions from purchased energy (scopes 1 and 2), which was also part of the 2021 financing agreement.

That agreement also included the goal for all soy imported by the group to be responsibly produced and verified deforestation-free by 2025 at the latest. The new financing agreement will raise the bar for this goal as well, as the group is committing to deliver on the ambitious Science Based Targets Initiative FLAG Guidance from 2025 onwards. This will reinforce the efforts to ensure not only a focus on deforestation but also on other vulnerable natural areas in connection with the DLG Group’s soy imports.

Facts: Science Based Targets Initiative FLAG Guidance
The SBTi FLAG Guidance provides a common, robust, science-based understanding of how much and how fast a company needs to reduce its land-based emissions in line with the Paris Agreement’s goal of limiting global warming to 1.5°C. FLAG is an abbreviation for ‘Forest, Land, and Agriculture Guidance’.