In February 2021, H&M Group issued a sustainability-linked bond, a new way to invest in our company while also investing in our environment and the planet. The bond got an incredibly positive reception — a clear indication that the market believes in our sustainability efforts.
Sustainability-linked bonds
Report stories
A new way to invest in our company and the planet
With investments in sustainability being an integral part of H&M Group’s strategy, linking our newly established bond programme to our sustainability goals was a natural choice. And the positive thing about them is that investors such as banks and other major players on the market now have the option to choose greener investments and can better contribute to a more sustainable future.
Sustainability-linked funding is also helping us increase awareness of our commitment to these goals.
Meaning business
Sustainability-linked bonds are different to regular bonds because they are tied to the borrower, in this case H&M Group, living up to its set sustainability targets. That is one of the reasons to choose this type of bond. And if the borrower doesn’t meet the set targets, they risk having to pay a higher interest. In conclusion, sustainably-liked bonds show that we stand by our goals and that we’re not only talking the talk but walking the walk.
We also see the bond as a great way to spread the word about our extensive work for the environment among investors. We are happy to see that more and more people are willing to invest in companies that take responsibility and drive positive change.
7.6 times oversubscribed
When we first issued our bond in 2021, it was 7.6 times oversubscribed, which means that we got offers of 7.6 times the amount we asked for, indicating we are on the right track. Our aim is for all our financing to be sustainable in one way or another in the future, and that the sustainability-linked bond format is a great way to enable issuers in starting their sustainability transition.
If you are interested in our framework for sustainability-linked bonds you can read more here.
More recycled materials – fewer emissions
For our sustainability-linked bond, we have committed to achieving three targets by 2025*.
- The first target is around circularity, which plays an important role in a sustainable future. The target is to increase our share of recycled materials to 30%.
- Our second target is to reduce scope 1 and 2 greenhouse gas emissions by 20%. Scope 1 emissions come from our owned and controlled sources, while scope 2 emissions are indirect emissions from purchased energy.
- The third target is to reduce Scope 3 greenhouse gas emissions by 10%. These emissions come from our suppliers and are related to fabric production, garment manufacturing, sourcing of materials, and transport.
*The base year is 2017, meaning we compare our target numbers with the corresponding numbers from 2017.
