A €500m ($843m) eight-year plan under H&M's EMTN (Euro Medium Term Note) programme will follow the sale with the funds being allocated towards eligible projects related to circular economy, green buildings, renewable energy, energy efficiency and sustainable water management and wastewater management.
H&M says the bond generated great interest amongst a broad international base of institutional investors and was more than 3.5 times oversubscribed.
H&M Group CFO Adam Karlsson states: “We are pleased to have been able to attract strong demand for our inaugural green bond from a large number of international investors. The transaction extends H&M Group’s debt maturity profile and supports our vision to lead the change towards achieving a circular fashion industry with a net-zero climate impact. We are also happy to see a broadening of our investor base, including several leading green investors, which confirms the ambition of our sustainability agenda."
The retailer has previously linked its debt to sustainability targets, including cutting emissions and increasing recycling.
In its Sustainable Finance Framework, released in August 2023, H&M said: “By issuing a combination of green and sustainability-linked finance instruments, H&M Group seeks to maximise the connection between its funding and sustainability strategies, while highlighting the investments that we make today that have a positive impact in the environment and our future trajectory to support our decarbonisation goals and the transition to a circular economy.”
H&M says the bond will be listed on the regulated market Euronext Dublin and has been placed with the assistance of BNP Paribas, ING, J.P. Morgan, SEB and UniCredit. ING also acted as advisor for the Sustainable Finance Framework.
In the past, H&M has faced accusations of greenwashing over its sustainability efforts. In November 2022, a proposed class action lawsuit in the US questioned the sustainability claims made in its Conscious Choice range.
In September 2023, H&M introduced 'pre-loved', which offers second-hand garments from a range of brands and designers, not limited to H&M Group, to its customers in its bid to support a more circular fashion industry.
In its 2022 annual report, H&M warned that increasing awareness of climate change was likely to impact consumer choices, with an increased preference for “products and services with low climate impact from trusted companies that are seen as leaders in sustainability”.
In September, H&M's US employees chose to support Slow Factory’s five-year commitment plan to tackle “human rights and climate justice”.
H&M has a wider goal to reduce its absolute greenhouse gas emissions by 56% between 2019 and 2030, with an ultimate goal of achieving net zero by 2040.
