CHANEL MISSES RENEWABLES TARGET IN SUSTAINABLE BOND

Companies setting net-zero goals typically don’t face any real punishment for missing those targets. Unless, that is, they raise money through a growing market for sustainability-linked bonds. The fashion giant Chanel missed an interim renewable energy target for 2021. Instead of meeting 97 per cent of its electricity needs from renewable sources, it only reached 92 per cent. This is relevant to investors as the company raised 600 million euros (US$613 million) in 2020 through a bond and tied its interest payments, called coupons, to successfully meeting climate targets. “Conditions in certain markets, including South Korea, have meant that it has taken more time than expected to find the right solution to shift to renewable electricity,” the company said. “We remain confident of achieving our objective of 100 per cent by 2025.” While missing the interim target doesn’t lead to a financial penalty, failing to meet the 2025 target would mean the company will have to pay millions of dollars more to its bondholders.