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H&M sustainability bond generates huge interest

Tue 23 Feb 2021 | 01:05 pm GMT
Michelle Urquhart | Products of Change Writer

H&M is committed to introducing sustainably sourced fibres

The €500 million sustainability-linked bond was launched 18 February and was 7.6 times oversubscribed. Sustainability-linked bonds are something new on the bond market. In contrast to green bonds, where the funds are linked to specific projects, sustainability-linked bonds are coupled to the company meeting a number of defined sustainability targets. H&M Group has issued a €500 million sustainability-linked bond with a maturity of 8.5 years. The annual coupon rate is 0.25 percent. The bond generated great interest and was 7.6 times oversubscribed. “For H&M Group, sustainability is an integral part of our operations,” says Adam Karlsson, chief financial officer. “This type of bond creates a clear and transparent commitment and incentive for the company. It is an important step in our continued work to optimise the company’s capital structure, while at the same time providing investors with an opportunity to contribute to positive transformation of the fashion industry.” The targets that H&M Group has committed to achieving by 2025 are: - Increase the share of recycled materials used to 30 percent. - Reduce emissions from the Group’s own operations by 20 percent. - Reduce absolute Scope 3 emissions from fabric production, garment manufacturing, raw materials and upstream transport by 10 percent. “Our customers are showing on a daily basis that they appreciate H&M Group’s offering with the best combination of fashion, quality, price and sustainability. Today’s successful bond issue is proof that the financial market also values our ambitious sustainability work and we look forward to working together for a sustainable industry,” says Helena Helmersson, CEO of H&M Group.
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