Burberry, the luxury fashion brand, has recently made a significant move towards aligning its financial operations with its sustainability and ethical practices. The company announced that it has refinanced its revolving credit facility with a £300 million sustainability-linked loan, arranged by Lloyds Bank. This loan includes specific environmental, social, and governance (ESG) targets that Burberry aims to achieve as part of its plan to become climate positive by 2040.

One of the key targets outlined in the loan agreement is a 46% reduction in emissions across Burberry’s supply chain by 2030. The company also aims to achieve net-zero emissions by 2040, a decade earlier than the goals set out in the Paris Agreement. By integrating these sustainability goals into its financial operations, Burberry is demonstrating its commitment to making tangible progress in addressing climate change.

It is worth noting that this is not the first time Burberry has taken proactive steps in financing its sustainability initiatives. In September 2020, the brand issued a “sustainability bond” to fund various projects aimed at improving its environmental impact. These projects included refurbishing properties within its portfolio to meet LEED or BREEAM certifications, as well as ensuring sustainable sourcing of natural resources and minimizing pollution from packaging.

Burberry’s Chief Financial Officer and Chief Operating Officer, Julie Brown, highlighted the importance of linking funding sources to sustainable initiatives, not just within the luxury sector but across the entire economy. She expressed gratitude for the support of the company’s relationship banks in establishing this funding, which will play a crucial role in achieving Burberry’s decarbonization goals in its operations and supply chain.

Lloyds Bank, the facilitator of the sustainability-linked loan, established a dedicated sustainability and ESG finance team last year to assist corporate clients in their sustainability plans. This team provides funding and strategic insights to support companies in their sustainability efforts.

Burberry’s decision to integrate its finances with its sustainability goals is a testament to its commitment to long-term success through a net-zero future. By taking a leadership role in the luxury industry, Burberry sets a precedent for other fashion brands to prioritize sustainability and take proactive measures to mitigate their environmental impact. With its ambitious targets and strategic financing, Burberry is leading the way in ensuring the fashion industry’s contribution to a more sustainable and ethical world.

Useful links:

1. Burberry’s sustainability goals
2. Lloyds Bank’s commitment to reducing environmental impact