rival, Burberry announced the issuance of the first sustainability labelled bond issued by a luxury fashion company. Chanel, Burberry, Prada Pave the WayĬhanel is not alone. Chanel is setting an important example,” says Anastasiya Ostrovnaya, research fellow at the Centre for Climate Finance and Investment of Imperial College Business School. However, the industry transition depends on all players setting and achieving ambitious climate targets. “Fast fashion is especially an environmental concern within the industry, and no one would call Chanel “fast fashion”. As for carbon emissions, the industry is responsible for more emissions than all international flights and maritime shipping combined. The UNCTAD estimates that some 93 billion cubic meters of water – enough to meet the needs of five million people – is used by the fashion industry annually. “Sustainability -linked bonds can support the transition to more sustainable business models in an industry that has a rather problematic environmental and social track record,” explains Ulrich Volz, founding director of the SOAS Centre for Sustainable Finance. According to the UN Conference on Trade and Development (UNCTAD), the fashion industry is considered to be the second most polluting industry in the world. The fashion industry has come under a lot of scrutiny in recent years and for a good reason. LONDON, ENGLAND – FEBRUARY 15 2020: Extinction Rebellion Climate Crisis activists protesting outside … Chanel’s sustainability goals include a 50% decrease in its own emissions (Scope 1 and 2) by 2030 and a shift to 100% renewable electricity by 2025. “The fact they are committing to a coupon step up if they miss the achievement of their targets and the fact their goals have been verified by the Science Based Targets Initiative (SBTi) indicates they are serious about their green transition,” says Krista Tukiainen head of research and reporting of Market Intelligence at the Climate Bonds Initiative.
The privately-owned fashion brand seems keen to walk the talk: in a bold move, it pegged its bond issuance to the achievement of its sustainability goals, meaning, if they are not met, Chanel will have to pay a penalty. Luxury designer Chanel is among the latest fashion houses to issue a $700 million bond linked to its environmental goals. Fashion brands are jumping on the green bond issuance bandwagon, which seems to be heading for another record year after a slowdown at the peak of the pandemic.