Accor and Air France-KLM Face Higher Debt Costs After Missing Climate Targets
Photo Credit: An AirFrance KLM plane and the Accor head office. Air France and Accor
Skift Take
The financial hit isn't big, but the disclosures reveal the reasons companies may miss climate targets.
Air France-KLM and Accor will pay higher interest rates on some debt after missing climate targets tied to their sustainability-linked bonds.
Both companies disclosed the penalties in financial filings over the past week.
Sustainability-linked bonds are a type of debt where the interest rate a company pays is tied to whether it meets environmental targets. If a company hits its goals, it continues paying the agreed interest rate. If it misses them, it faces a penalty.
Accor Misses Two Climate TargetsIn November 2021, Accor obtained a €700 million sustainability-linked bond with a 2.375% interest rate, which it had agreed to pay off in November 2028.
The bond was tied to two specific greenhouse gas reduction targets, both measured against a 2019 baseline and to be achieved by the end of 2025.
