BN Danone

By Dieter Holger

Danone SA said Wednesday that it would spend 2 billion euros ($2.2 billion) over the next three years to fight climate change through agriculture, energy, packaging and digital technology, as the company looks to boost growth.

The investments, which include recurring costs behind its brand and EUR1 billion in capital expenditures, are expected to "deliver in the mid-term a consistent mid-to-high single digit recurring earnings per share growth," Danone said.

As part of the plan, the French food company said its water bottles will be made of 100% recycled plastic in Europe from 2025 onward as it aims to use 50% recycled plastic world-wide.

Starting in April, Danone's Evian and Volvic brands will offer some recycled plastic bottles, including in Germany, France and the U.K. The two brands should hit carbon neutrality later this year.

Danone also estimates its emissions peaked at the end of 2019 and are set to fall. Overall, it said it cut its greenhouse-gas intensity--the emissions required for an activity--by nearly a quarter since 2015.

In an effort to link environmental, social and governance metrics with financial performance, Danone said it would for the first time price carbon emissions into its quarterly earnings.

The new "carbon adjusted" earnings per share factors in the estimated cost for absolute GHG emissions throughout the company's footprint.

Carbon-adjusted EPS is set to grow faster than recurring EPS since the company's emissions are falling, Danone said. In 2019, Danone said the carbon-adjusted EPS grew 12%, ahead of the company's 8.3% recurring EPS growth.

"We are convinced that there is an urgent and significant opportunity to put climate actions even more at the core of our business model," said Emmanuel Faber, chairman and chief executive at Danone, in prepared remarks.

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

(END) Dow Jones Newswires

February 26, 2020 06:26 ET (11:26 GMT)

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