BNP Paribas announced today it has supported leading luxury goods company CHANEL to issue its first Sustainability-Linked Bonds.
The pioneering €600mn inaugural transaction – a first in the luxury sector linked to the ICMA Sustainability-Linked Bonds Principles – will support CHANEL’s ambitious Mission 1.5° climate strategy by linking the bond terms to carbon reduction targets.
The targets have been approved by the Science Based Targets initiative, and include:
- Decreasing CHANEL’s own (scope 1 and 2) emissions by 50% by 2030
- Decreasing CHANEL’s supply chain (scope 3) absolute greenhouse gas emissions by 10% by 2030
- Shifting to 100% renewable electricity in CHANEL operations by 2025
CHANEL is the first unrated issuer to place public bonds linked to its sustainability objectives. The innovative financing is also aligned to the Sustainability-Linked Bond Principles and provides investors with an opportunity to support the luxury sector’s transition to decarbonize. The Sustainability-Linked Bonds were well received by the market and were oversubscribed. BNP Paribas was joint structuring advisor and joint bookrunner on the deal. The progress of sustainability objectives will be assessed regularly by a third-party verifier.
BNP Paribas and CHANEL both share a collaborative and strategic ambition to accelerate towards a low carbon economy and achieve the goals of the Paris Agreement.
Jean-Laurent Bonnafé, BNP Paribas Chief Executive Officer, emphasized: “CHANEL is involved in a significant transformation program to decarbonize its business model. Sustainability-Linked Bonds can be game-changers for accelerating climate action, and CHANEL has demonstrated true leadership through the creation of an ambitious, transparent and scientific framework. We are honored to support CHANEL by structuring and issuing this ground-breaking transaction.”
Philippe Blondiaux, CHANEL’s Chief Financial Officer, commented: “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.”
More information available here.