Burberry, the well-known British luxury fashion brand, has recently taken a unique step towards supporting its sustainability efforts by raising new funds. In a groundbreaking move for the company, Burberry turned to the debt markets for the first time ever, but with a strong emphasis on ethics and sustainability.

To achieve its goals, Burberry introduced a sustainable bond as a means to enhance its liquidity, while also making it clear that the funds raised will be fully dedicated to advancing its environmental initiatives. Not only is this sustainable bond the first of its kind issued by Burberry, but it also stands as a pioneering initiative within the luxury business sector as a whole.

Burberry’s commitment to ethics and sustainability has been deep-rooted, particularly since the controversial revelation in 2018 that the company had been burning millions of pounds worth of unsold stock. As a direct response to this scandal, Burberry has significantly intensified its efforts in the realm of environmental sustainability. This new sustainable bond serves as another significant step in that direction.

The purpose of introducing this bond is twofold: to diversify Burberry’s funding sources and to introduce long-term financing into its capital structure. In order to secure the best possible terms for the bond, the company has already applied to be rated by Moody’s, expecting a Baa2 rating with a stable outlook.

However, some may question whether this move is indicative of Burberry being in dire need of cash. The company is eager to dispel any such notion, stating that it has a conservative capital allocation policy and holds substantial liquidity. Earlier this year, in response to the COVID-19 pandemic, Burberry drew down £300 million from its revolving credit facility (RCF) and issued £300 million of short-dated commercial paper through the Bank of England’s Covid Commercial Financing Facility (CCFF). It is important to note that these funds had a maturity date in March 2021, and the RCF drawing has already been fully repaid in the first quarter of Burberry’s latest financial year.

Overall, the issuance of this sustainable bond by Burberry serves as a powerful symbol of the brand’s ongoing commitment to sustainability and responsible business practices. With the proceeds specifically designated for eco-driven initiatives, Burberry aims to further solidify its position as a leader in both luxurious and sustainable fashion. By taking this step, Burberry not only reinforces its dedication to sustainability, but also sets a meaningful precedent for other luxury brands to follow suit.

Useful resources:
– To learn more about Burberry’s sustainability efforts, visit their official website:
Burberry sustainability
– For more information on sustainable fashion in general, check out this comprehensive guide:
Vogue’s Sustainable Fashion Guide