Chanel’s revolutionary move to achieve environmental targets

Chanel's 1.5C environmental targets.

Chanel’s revolutionary move to achieve environmental targets

Chanel’s revolutionary move to achieve environmental targets

In Sustainable Fashion News Ireland, Chanel issue transaction for bonds that are directly linked to their company’s 1.5C environmental targets.

The Paris fashion house which was founded in Paris, France in 1910 by Coco Chanel have launched their new multi-million bonds valuing €600 million euro in total which is being supported French international banking group BNP Paribas.

This rare move is seen by some as a first in the luxury fashion sector being linked to the International Capital Market Association (ICMA) Sustainability Linked Bonds who are responsible for providing guidelines for companies looking to improve their environmental reporting and disclosure which helps them access capital injections of cash for programmes that will reduce emissions.

Implementing eco-friendly, sustainable and environmental changes of practice for any company today requires huge investment which lots of companies may not have.

With more fashion houses now realising the importance put on them by governments and customer demands to become more sustainable in the way they operate, this road of raising capital through bond issuing is expected to rise in the next 24 months.

Most of the big fashion houses are now implementing their own sustainable and environmental targets, through use of eco-friendly materials, recyclable packaging and more energy efficient production and delivery processes.

This is putting some under huge financial strain, especially during COVID-19 where they have had to make big cutbacks.

Global CFO for Chanel, Philippe Blondiaux commented that both their 5-year and 10-year bond deals is a first for the Parisian fashion house in venturing into the bond market.

This type of commitment from Chanel will put huge pressure on the French fashion house to ensure they hit their environmental targets in reducing emissions within their supply chain. Failure in doing so will see them having to pay a premium when the bonds mature at the end of their terms.

Philippe Blondiaux said: “The philosophy of Chanel is the creation of long-term value for the business and for society. This financing is entirely in line with these principles. In launching these bonds, Chanel hopes to support the development of the sustainable financing market and the wider social and environmental progress that this type of financing can advance.”

“There is a growing recognition amongst investors that they have a role to play in helping to tackle climate change, and we look forward to engaging with them.”

“It’s a logical step…we’re making (the financing strategy) consistent with the company strategy, which is centred around travelling to a more sustainable model.”

Money from some of the bonds is set aside to be used for investments in start-ups companies that can develop and deliver alternatives to leather and plastics.

 

Chanel’s revolutionary move to achieve environmental targets

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