Tesco could be taking advantage of “unwitting investors” through an “unambitious” sustainability target, critics have warned.
It comes as world leaders gather in Glasgow to discuss the climate emergency at Cop26.
Last week, the supermarket launched a £400 million bond linked to reducing its greenhouse gas emissions by 60 per cent by 2025.
However, the goal is already 90 per cent complete.
It also does not include pollution from suppliers – known as “Scope Three” emissions – which make up most of its carbon footprint.
Speaking to Bloomberg, abrdn investment manager Jamie Irvine claimed that Tesco was easily on track to hit the goal.
“It might be plausible for a company to issue unambitious or ‘lazy’ sustainability-linked bonds that do not tangibly promote the company’s sustainability goals,” he said.
“These structures should not simply be an easy way for issuers to access cheaper financing from unwitting investors.”
Nevertheless, investors are said to have been positive about the bond, with final demand in excess of £1.2 billion.
Tesco does not intend to eliminate its Scope Three emissions until 2050, 15 years behind its core business.
Environmental, Social and Governance (ESG) bonds have reached a record $1 trillion this year.
The John Lewis Partnership – which owns Waitrose – recently agreed a £420 million sustainability-linked credit facility.
Its interest rate is dependent on the group reaching net zero by 2035, while cutting out fossil fuels from its vehicles and halving Waitrose food waste by 2030.