CHANEL pioneers new Sustainability-Linked Bonds supported by BNP Paribas
September 24, 2020 - 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 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
The emission reduction targets were approved by the Science Based Targets Initiative.
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 decarbonise. 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, emphasised: “CHANEL is involved in a significant transformation program to decarbonise 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 honoured 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.”
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 71 countries, with approximately 199,000 employees, of which more than 151,000 in Europe. The Group has key positions in its three main activities: Domestic Markets and International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors. The Group helps all its clients (individuals, community associations, entrepreneurs, SMEs, corporates and institutional clients) to realise their projects through solutions spanning financing, investment, savings and protection insurance. In Europe, the Group has four domestic markets (Belgium, France, Italy and Luxembourg) and BNP Paribas Personal Finance is the European leader in consumer lending. BNP Paribas is rolling out its integrated retail-banking model in Mediterranean countries, in Turkey, in Eastern Europe and a large network in the western part of the United States. In its Corporate & Institutional Banking and International Financial Services activities, BNP Paribas also enjoys top positions in Europe, a strong presence in the Americas as well as a solid and fast-growing business in Asia-Pacific.