Chanel raises €600 million sustainability bond

Worldwide
Published:  30 September, 2020

The French luxury fashion group has raised a €600 million sustainability linked- bond.

Chanel’s bonds are different to those recently announced by Burberry as the former is to include financial penalties within the mechanism for any environmental targets that it fails to meet within the given timeframe. The French company’s bond's terms are said to be in line with Chanel’s environmental objectives, as detailed in its ‘Mission 1.5C’ strategy, which include carbon reduction targets to reduce the company’s internal and energy-related emissions, known as Scope 1 and 2 , by 50% cent by 2030, and decrease its supply chain, or Scope 3 emissions, by 10% by the same year.

Allegedly, some proceeds could be used for investments, including in start-ups developing alternatives to plastics or leather. Chanel would also have to pay a premium when the bonds mature if it does not meet certain goals on cutting emissions within the firm and its supply chain.

Earlier in September, British fashion label Burberry also priced its inaugural sustainability bond, whose final terms are for a £300 million (US$387 million) 1.125% bond due September 21, 2025. Read more here.