Hong Kong property developer New World Development (NWD), owner of the K11 property, became the first real estate developer in the world to sell US dollar-based sustainability-related bonds (SLB) last Friday.
In doing so, the company raised US $ 200 million and is also committed to achieving 100% renewable energy for its Greater Bay Area rental properties within the next five years. So, the future K11 will use more solar panels and wind turbines to generate power. This move will also benefit fashion brands committed to sustainability in their operations and help fashion brands achieve their renewable energy mission in stores.
NWD maintains a 5 star (highest) rating on the Global Real Estate Sustainability Benchmark (GRESB) in 2019 and 2020. “Businesses must take timely action to combat climate change,” said CEO Adrian Cheng.
Green branding is nothing new, but collaboration between brands and developers is on the rise as fashion brands are the most prominent tenants of these shopping centers, and fashion brands seem to value sustainability more than ever. They are looking for a greener place to set up their shop.
The move relates to an industry labeled as the second most polluting industry by the United Nations Conference on Trade and Development (UNCTAD) in 2019. Within a year, global fashion brands rushed into fashion issuing fashionable and greener bonds.
Path announced in September 2020 that it was brought up € 600 million via SLB, the first ever fashion brand. Therefore, Chanel needs to use 100% renewable electricity by 2025 in all of its stores, which encourages it to look for places with high-tech and renewable energy missions to help achieve these goals.
British rival Burberry announced its own SLB that same month, and aimed to achieve climate neutrality by 2022.
In an era of pandemics and financial problems, ESG commitments (environment, sustainability and governance) are not only injecting greener energy but also real money into the fashion industry. Ferragamo secured € 250 million in sustainability loan for ESG targets in June 2020. Moncler secured a loan commitment of € 400 million in July 2020. And Prada signed a contract with Credit Agricole for sustainable lending in November 2019.