New £300m loan puts green goals at heart of Burberry finances
Burberry has become the latest big name in fashion to fundamentally link its finances to its drive to operate an ever-more-green and ethical business. The luxury company said Monday that it has refinanced its revolving credit facility (RCF) to a £300 million sustainability-linked loan, coordinated by Lloyds Bank.
It has the achievement of key environmental, social and governance (ESG) targets woven into its terms as part of the company’s ambition to become climate positive by 2040. This includes accelerating emissions reductions across its extended supply chain by as much as 46% by 2030 and becoming net zero by 2040, 10 years ahead of the 1.5°C pathway set out in the Paris Agreement.
It follows the firm’s move in September 2020 that saw it issuing a ‘sustainability bond’. It said it was “enlisting the support of investors to finance ambitious sustainability projects including refurbishing properties across its portfolio which are certified by LEED or BREEAM and ensuring natural resources are sourced sustainably and pollution from packaging is prevented”.
It was the first luxury brand to issue such a bond.
CFO and COO Julie Brown said: “We believe our long-term success depends on creating a net zero future. Linking sources of funding to sustainable initiatives will help drive this, not only in the luxury industry but also across the wider economy. We’re grateful for the support of our relationship banks in establishing this funding, which will help us on our journey to decarbonise our own operations and extended supply chain.”
Lloyds Bank created a new sustainability and ESG finance team last year “to support corporate clients with their sustainability plans, providing funding and strategic insights”.
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