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Project Details


H&M Sustainability-Linked Bonds Second-Party Opinion


H&M Group

Project Type

Sustainability Linked Bond or Note

Industry Group

Textiles & Apparel

Use of Proceeds




Evaluation Date

Jan 2021

Evaluation Summary

Sustainalytics is of the opinion that the H&M Group Sustainability-Linked Bonds aligns with the Sustainability Linked Bonds Principles 2020 and considers the KPIs to be relevant and material to the issuer and the SPTs to be ambitious and impactful. This assessment is based on the following:

Selection of Key Performance Indicators (KPIs)

H&M Group has selected three KPIs – (i) Share of recycled materials / total materials used, (ii) Scope 1 and 2 CO2-e emissions and (iii) Scope 3 CO2-e emissions – for the Sustainability-Linked Bonds (SLB). Sustainalytics considers the KPIs chosen to be relevant and material for the H&M Group, and further considers the KPIs and methodology to calculate KPI performance to be clear.

Calibration of Sustainability Performance Targets (SPTs)

H&M Group has established SPTs to increase the share of recycled materials as inputs to 30% by 2025, to reduce the Company’s Scope 1 and 2 emissions by 20% by 2025 and Scope 3 emissions by 10% by 2025 compared to a 2017 baseline. Sustainalytics considers the SPTs to be aligned with the Issuer’s sustainability strategy. Sustainalytics further considers the SPT 1 to be highly ambitious based on past performance and in comparison with peers’ targets. The achievement of the SPTs contribute to SDGs 9 & 12.

Bond Characteristics

H&M Group has disclosed that each of the three KPIs is tied to a step-up in coupon rate if their respective SPTs are not achieved. The KPI’s step-up rate is weighted as follows: KPI 1 40%, KPI 2, 20% and KPI 3, 40%. As such, the step-up of the coupons can be 0%, 20%, 40% 60%, 80% or 100% of the total stepup rate (as specified in the security documentation) depending on H&M Group’s achievement of the three SPTs tied to the KPIs. If all three SPTs are achieved and reporting and verification has been made public in accordance with the processes outlined in the Framework, the financial characteristics of the bonds/schuldscheins issued under this Framework shall remain unchanged. This is aligned with market practice.


H&M Group commits to report on an annual basis on its performance on the KPIs in a Sustainability-Linked Bonds Progress Report on its website, which is aligned with market practice.


H&M Group commits to have external limited assurance verification conducted annually on its KPI performance against the SPTs, which is aligned with market practice.