The World Bank is taking a creative approach to tackling food loss and waste, a major global challenge outlined by Sustainable Development Goal 12.3: halving food waste by 2030. In a press release from Washington, D.C. on October 15, 2020, the World Bank announced the issuance of new Sustainable Development Bonds denominated in Norwegian krone (NOK) and Swedish krona (SEK).
Raising Awareness, Raising Capital
This bond issuance, totaling approximately US$550 million equivalent, served a dual purpose. While raising capital to support the World Bank’s mission of ending extreme poverty and promoting shared prosperity, the bonds were also a tool for raising awareness about the importance of combating food loss and waste.
Engaging Scandinavian Investors
The bonds were specifically offered in Norwegian krone and Swedish krona, targeting investors in Scandinavia. This strategic move allowed the World Bank to tap into a new market while simultaneously engaging with investors in a region known for its focus on sustainability.
Over 30 investors including Deka Investment, the Folksam Group, Handelsbanken Treasury, Kommunalbanken (KBN), Länsförsäkringar Treasury, Nordea Asset Management, Odin Forvaltning, Sandnes Sparebank, Sbanken ASA, SpareBank 1 SMN, SpareBank 1 SR-Bank ASA, Sparebank 1 Østlandet, Sparebanken Sør, Sparebanken Vest, Storebrand Asset Management, Storebrand Bank ASA and Union Investment Privatfonds GmbH participated in the bonds. Scandinavian investors accounted for 95% of the NOK bond and 85% of the SEK bond with German, Japanese and UK based investors rounding out the remainder of investor participation.
The Bonds Themselves
The breakdown of the offering is as follows:
- NOK 4 billion (approximately US$436 million) 5-year floating rate bond
- SEK 1 billion (approximately US$114 million) 5-year fixed rate bond
Both bonds have a maturity date of October 23, 2025.
Food Loss and Waste: A Pressing Issue
The World Bank recognizes food loss and waste as a significant global problem. According to estimates, roughly one-third of all food produced globally is lost or wasted each year. This not only represents a massive financial loss but also contributes to environmental issues and food insecurity.
The World Bank’s Commitment
By issuing these Sustainable Development Bonds with a focus on food loss and waste, the World Bank demonstrates their commitment to addressing this critical challenge. The funds raised will support lending programs in middle-income countries aimed at improving infrastructure, access to markets and logistics, and waste management practices throughout the food supply chain.
A Call to Action
The World Bank’s initiative serves as a call to action for all stakeholders involved in the food system. From producers and consumers to policymakers and investors, a collaborative effort is needed to reduce food loss and waste and ensure a more sustainable and equitable food system for all.
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