Financing Sustainable Logistics Investments Using Selected Sustainable Finance Instruments
Purpose: The main purpose of the paper is to identify the key factors driving the development of sustainable logistics investments, with particular emphasis on the construction of modern warehouse facilities, including logistics centers. Another objective of the paper is to analyze the determinants underlying environmentally sustainable logistics investments, as well as the financial instruments supporting their implementation that incorporate sustainable development mechanisms. In addition, this research also examines the possibilities of applying dedicated financial instruments in economic practice with particular emphasis on loans secured by export credit agency guarantee. Design/Methodology/Approach: The analysis of literature sources enabled the synthesis of data and information necessary to structure knowledge related to the implementation of sustainable investments and sustainable financial instruments. Based on publicly available materials, the article presents an analysis within a case study framework referring to the investment carried out by Żabka Group. The investment involved the construction of a build-to-suit logistics center in Małopole village nearby Warsaw, with an area of approximately 60,000 square meters, designed to support the delivery operations for around 3,500 ‘Żabka’ stores. The distribution center which has been developed is characterized by its environmentally sustainable design, as proved by BREEAM certification. Findings: The results of the research has been conducted indicate the steadily growing importance of environmental protection, an integral part of which is the design and implementation of sustainable logistics investments, such as warehouse facilities. Within the scope of the topic addressed in the research it is demonstrated how crucial the daily execution of environmentally sustainable investments has become as well as how significant a role is played by financial instruments with embedded sustainability mechanisms, implemented simultaneously by governmental and commercial financial institutions during their realization. The paper highlights key conclusions drawn from the research, namely: the fact that logistics investments are often perceived as more cost-intensive due to their complex nature and the aspect pointing to the necessity of providing financial support by funding institutions through frequently non-standard solutions, designed appropriately to meet specific and individual needs. Practical Implications: The key study focuses on the implementation of a sustainable logistics project, supported by international certifications such as BREEAM and financed through a financial instrument designed to promote such initiatives particularly those incorporating sustainability mechanisms (ESG-linked). This instrument takes the form of an export credit agreement that includes an embedded sustainability component. The research describes the practical aspects of using such an instrument, including all documentary and cash flows between the parties involved in the project. Originality/Value: This paper contributes to the development of a coherent analysis of sustainable logistics investments that utilize innovative solutions derived from the financial market, understood as the practical application of sustainable financial instruments. The research focuses on the implementation of an export credit secured by an export credit agency guarantee (insurance) to finance a logistics investment aimed at constructing a logistics center with an environmentally sustainable character which has been documented by the possession of a BREEAM certificate as well. The literature review conducted indicates the unique nature of the topic as well as the solution described within the article is one of the first of its kind in whole Europe.