Chanel just released a publicly listed sustainability bond – which will trade on the Luxembourg Stock exchange. What’s more? They have reportedly already successfully raised 699 million USD! Chanel is privately owned and operated by the Wertheimer family, and this is the first time since the brand’s inception that it has opened its doors to outside investors.
The issuing of the bond is a part of the brand’s recent “Chanel Mission 1.5º”, a commitment to the Paris Climate Agreement which aims to limit the world’s temperature increase to 1.5 degrees celsius. The brand has an ambitious plan to reduce its carbon footprint and switch to using 100% renewable energy.
The bond serves the purpose of holding Chanel accountable to its commitment towards building a sustainable company. As per the terms of the bond, the brand will have to pay a penalty of 50 basis points to its investors (over and above the coupon rate) if it doesn’t switch to 100% renewable energy by 2025. Additionally Chanel will have to pay another 75 basis points if it doesn’t meet its target of reducing its carbon emissions by 2030!
Philippe Blondiaux, Chief Financial Officer of Chanel said that “By launching these bonds, Chanel hopes to support the development of the sustainable financing market… Investors increasingly recognise that they have a role to play in the fight against climate change, and we look forward to working with them.”
Previously other luxury companies such as Burberry, Salvatore Ferragamo and Prada have also raised funds to show their commitment to sustainable development. Burberry was in fact the first to introduce a sustainability linked bond in public markets.
We’re definitely a fan of this responsible and mindful move by Chanel to protect our planet. Every step counts!
Photo Courtesy: theindustry.fashion; businessgreen.com