Pandora Uses Recycled Gold to Ease Borrowing Costs and Dazzle Customers

Danish jewelry brand Pandora is reportedly using recycled gold as a way to appeal to eco-minded creditors and customers via an unprecedented sustainability-linked bond that also allows it to avoid high bank rates.

The new 500-million-euro (about $531 million) bond includes targets of reducing emissions and transitioning to the use of 100% recycled silver and gold by 2025, Bloomberg reported Friday (March 3).

Together with promoting its sustainability efforts, the bond will enable Pandora to gain additional sources of financing and reduce its need for loans, according to the report.

The proceeds from the sale of the bond will be used for general corporate purposes and will come at a time when Pandora plans to add 100 new retail locations within the calendar year, the report said.

Sustainability is one of the trends shaping the banking sector in the Europe, Middle East and Africa (EMEA) region.

As PYMNTS reported Jan. 2, more financial institutions are working towards putting their money where their mouth is to embrace a more proactive stance on sustainable investing and enable consumers to spend more responsibly.

For example, financial institutions have committed to aligning their lending and investment portfolios with net-zero emissions by 2050, routinely monitor and report on their progress toward reaching their environmental targets and have rolled out carbon trackers that help people monitor the carbon emissions their spending generates.

Another increasingly popular practice, “sustainable supply chain finance,” assesses and provides loans that consider suppliers’ environmental, social and governance (ESG) performance.

The report of Pandora’s SLB comes about two years after the company secured a 950-million-euro sustainability-linked revolving credit facility that linked its borrowing costs to its progress on the goals of becoming carbon neutral in its operations by 2025 and using only recycled silver and gold by 2025.

The company’s borrowing costs could rise or fall based on how well it does in making progress toward those targets, the company said of that loan in April 2021.

“Pandora has set out to become a low-carbon and circular business,” Pandora Chief Financial Officer Anders Boyer said at the time. “This type of loan connects the company’s capital structure to our sustainability agenda and creates a very clear incentive for us to reach our targets. It also confirms the financial community’s appreciation of our sustainability strategy.”

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.