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Second-Party Opinion Download

Project Details


Tesco Sustainability-Linked Bond Second-Party Opinion


Tesco PLC

Project Type

Sustainability Linked Bond or Note

Industry Group


Use of Proceeds




Evaluation Date

Dec 2020

Evaluation Summary

Sustainalytics is of the opinion that the Tesco Sustainability-Linked Bond Framework aligns with the Sustainability-Linked Bond Principles 2020 and considers the KPI to be adequate and the SPTs to be ambitious and impactful. This assessment is based on the following:

Selection of Key Performance Indicators (KPIs)

Tesco has selected total Scope 1 and 2 greenhouse gas emissions as the KPI for its Sustainability-Linked Bonds (SLB). Sustainalytics considers the KPI chosen to be relevant and material for Tesco. While Tesco has defined targets related to its Scope 3 emissions, these are not covered by the KPI. Sustainalytics is of the opinion that the KPI is adequate.

Calibration of Sustainability Performance Targets (SPTs)

Tesco has established SPTs to reduce Scope 1 and 2 emissions by 60% by 2025 and 85% by 2030, which are in line with a trajectory to 100% by 2050. Sustainalytics considers the SPTs to be aligned with the issuer’s sustainability strategy and to be ambitious based on their alignment with Tesco’s approved Science Based Targets. The SPTs contribute to SDGs 7 and 9.

Bond Characteristics

Tesco has disclosed that prior to issuing an SLB under this Framework, it will specify the relevant SPT for that instrument. Failure to achieve the SPT will result in an upwards coupon adjustment or penalty payment on the bond principal, as appropriate, with the amount specified in each of the bonds’ offering documentation.


Tesco commits to reporting on its website performance related to the KPI. This information, subject to limited assurance, will be made available on an annual basis. Tesco also commits to include where relevant and feasible any adjustments to baseline, reassessment of KPI, or restatement of the SPTs. This is aligned with the SLB Principles.


Tesco commits to having an independent and external verifier provide limited assurance on its KPI performance figures annually, as well as on its KPI performance against the SPT until after the KPI trigger event of a bond has been reached. The verification report provided will be made publicly available on Tesco’s website. This is aligned with the SLB Principles on verification.