One day, we’ll all have shares in the ecological transition
Ecological transition is no longer an option. It’s an obligation for everyone: individuals, governments and companies. But for the latter, change can be costly to organise and implement. That’s where the idea of financing through bond issues has come from. Financial products appeal to large corporate groups and to small shareholders, who see it as a profitable and sustainable bet.
The challenges of ecological transition
In the corridors of the prestigious CHANEL fashion house, they don't just speak about collections, shows and trends. Now, global warming and reducing carbon emissions are part of the challenge. To prove it, the luxury brand with the famous logo has decided to finance its ecological transition by issuing sustainable bonds worth €600 million at the end of 2020. It’s intention is to support the group’s environmental objectives, namely CHANEL MISSION 1.5°, the home-grown programme to fight global warming. It’s a reminder of this brand’s, and many others’ commitment through the Fashion Pact signed in 2019 at the G7 in France. Brands are becoming empowered with Socially Responsible Investment (SRI).
Who will finance the ecological transition?
€600 million for CHANEL, €320 million for BURBERRY, €500 million for ORANGE. Green bonds are increasingly attractive to investors. In 2014 they accounted for only 0,2% of total issues, in 2019 they rose to 2,85% (for an overall amount of $205 billion), and projections already total more than $1,000 billion in coming months. The acceleration is due to global awareness of the need for change, and the ability of companies to reverse the situation. Take the participatory platform Time for the Planet , which aims to raise €1 billion to create 100 companies to fight global warming.
Ecological transition: a new flagship for brands
These new social fund-raising opportunities are both an opportunity and a risk for companies that choose to get involved. A risk, because if they fail to meet the objectives set, they are liable to face penalties from their shareholders. But most of all, it’s an opportunity. It echoes the aspirations of a public and consumers who are more sensitive to brands’ commitment to social and environmental issues. And it means being part of the solution and contributing to changing and improving the world. As Henry Ford said: “Doing more for the world than the world does for you - that is success.”
In a time of global warming and carbon control, companies no longer have a choice: they must change so that they continue to advance and appeal to an increasingly sensitive audience. To help them on their way, socially responsible investment opens up interesting prospects.