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Chanel Misses Interim Renewables Target in Sustainable Bond

The fashion giant needed to reach 97% renewables in operations by 2021, but could only manage 92%.

A milliner makes a hat in the Maison Michel workshop at the Chanel SA 19M campus in Aubervilliers, France.

A milliner makes a hat in the Maison Michel workshop at the Chanel SA 19M campus in Aubervilliers, France.

Photographer: Benjamin Girette/Bloomberg

Companies setting net-zero goals typically don’t face any real punishment for missing those targets. Unless, that is, they raise money through a growing market for sustainability-linked bonds.

The fashion giant Chanel, maker of tweed suits and No.5 perfume, missed an interim renewable energy target for 2021. Instead of meeting 97% of its electricity needs from renewable sources, it only reached 92%. This is relevant to investors as the company raised 600 million euros ($613 million) in 2020 through a bond and tied its interest payments, called coupons, to successfully meeting climate targets.