Fashion giant Chanel, known for its iconic perfume and tweed suits, keeps up to date with changing tastes. These days that means showing consumers ¡ª and investors ¡ª that it¡¯s doing its part to combat climate change.
So when the company needed to borrow money two years ago, it turned to a hot new financial product: sustainability-linked bonds (SLBs).
The investors who purchased Chanel¡¯s €600 million ($589 million) of bonds also got a promise: If the company didn¡¯t meet certain climate goals, it would pay them millions of euros more. In other words, they¡¯d pay a penalty for not being green.
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