H&M Group announces €500 million sustainability-linked bond

H&M Group has issued a €500 million sustainability-linked bond with a maturity of 8.5 years.

Sustainability-linked bonds, which are relatively new on the bond market, are coupled to the company meeting a number of defined sustainability targets. The bond issued by H&M Group generated great interest and was 7.6 times oversubscribed.

The bond will be listed on the regulated market Euronext Dublin, and has been placed on the assistance of BNP Paribas, Commerzbank, Danske Bank, SEB and Standard Chartered. SEB also acted as advisor for the Sustainability-Linked Bond Framework.

Adam Karlsson, CFO says “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. It is an important step in our continued work to optimise the company’s capital structure, while at the same providing investors with an opportunity to contribute to positive transformation of the fashion industry.”

The targets that H&M Group are committed to achieving by 2025 are:

• Increase recycled material usage to 30%
• Reduce emissions from the Group’s own operations by 20%
• Reduce absolute Scope 3 emissions from fabric production, raw materials, garment manufacturing and upstream transport by 10%

Evan Bruner, Project Manager, Sustainalytics added “Sustainalytics is of the opinion that the H&M Group Sustainability-Linked Bond KPIs are relevant and material to the issuer and that the SPTs are ambitious and impactful. The goal to reach 30 percent recycled materials as inputs is a highly ambitious SPT (Sustainability Performance Target) and represents leadership in the clothing industry.”

“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.

For full details on the target and framework click here.