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H&M issues 500 million euro sustainability-linked bond

By Huw Hughes

19 Feb 2021


H&M has issued a 500 million euro sustainability-linked bond which the Swedish fashion giant said will encourage it to meet its previously announced 2025 sustainability targets.

Unlike green bonds, where funds are linked to specific projects, sustainability-linked bonds - which are relatively new additions to the bond market - are coupled to companies meeting several defined sustainability targets.

H&M has previously set out 2025 targets to increase the share of recycled materials used to 30 percent; reduce emissions from the group’s own operations by 20 percent; and reduce absolute Scope 3 emissions from fabric production, garment manufacturing, raw materials and upstream transport by 10 percent.

“For H&M Group, sustainability is an integral part of our operations. This type of bond creates a clear and transparent commitment and incentive for the company,” said H&M chief financial officer Adam Karlsson in a statement.

“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 bond H&M issued has a maturity of 8.5 years and was 7.6 times oversubscribed. The annual coupon rate is 0.25 percent.

H&M CEO Helena Helmersson said: “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.”

Photo: H&M