Burberry, the renowned luxury fashion brand, has taken a significant step towards integrating its financial operations with its commitment to sustainability and ethical practices. The company announced on Monday that it has refinanced its revolving credit facility (RCF) with a £300 million sustainability-linked loan, facilitated by Lloyds Bank.
In line with Burberry’s ambitious goal to become climate positive by 2040, this loan includes specific environmental, social, and governance (ESG) targets. By 2030, the company aims to reduce emissions across its entire supply chain by up to 46% and achieve net-zero emissions by 2040, a decade earlier than the targets outlined in the Paris Agreement’s 1.5°C pathway.
This recent development follows Burberry’s issuance of a sustainability bond last September, making it the first luxury brand to do so. The funds raised from the bond were directed towards financing sustainability initiatives such as LEED or BREEAM certified property refurbishments in Burberry’s portfolio, as well as ensuring sustainable sourcing of natural resources and reducing pollution from packaging.
Julie Brown, Burberry’s Chief Financial Officer and Chief Operating Officer, emphasized the company’s belief that long-term success is contingent upon establishing a net-zero future. By linking funding sources to sustainable initiatives, Burberry aims to drive sustainability not only within the luxury industry but also throughout the broader economy. Brown expressed gratitude for the support of their relationship banks in securing this funding, which will contribute to the decarbonization of Burberry’s operations and extended supply chain.
Lloyds Bank, committed to supporting corporate clients in their sustainability efforts, established a dedicated sustainability and ESG finance team last year. This team provides funding and strategic guidance to help companies like Burberry achieve their sustainability goals.
Burberry’s decision to align its financing with environmental and social objectives is a powerful indication of its commitment to sustainability. By integrating its financial operations with its green ambitions, the company is showcasing leadership within the fashion industry, setting a precedent for other luxury brands to follow suit. This move underscores the growing significance of sustainability within the corporate world and serves as a reminder that companies must go beyond mere rhetoric to make a genuine and lasting impact on the planet.
Useful links:
1. Burberry’s climate justice and nature conservation initiatives
2. Lloyds Bank’s sustainable business and finance initiatives
