Abstract

On September 30, 2020, German multinational sporting goods company, Adidas AG (Adidas) raised € 500 million by issuing zero percentage sustainability coupon bonds. The bonds were issued with the objective of funding and supporting the ongoing sustainability practices at Adidas. The terms sustainability and sustainability financing are gaining prominence due to the growing importance of businesses to protect the environment and society. Companies are also opting for responsible corporate governance, social and environmental practices, and disclosing them through the ESG framework (Environmental, Social, and Governance). Sustainable finance takes ESG into account in the financing and investment strategies of a company. The objective of sustainability financing and investment is to ensure integration of business objectives that would ensure responsibility toward the economy, the environment, and society through a responsible corporate structure. In this context, the present case study can be helpful in understanding the concept of sustainable financing, strategy, and guidelines followed in designing, monitoring, and controlling the sustainable investment practices of a company. The case covers the sustainability practices at Adidas, sustainability investment framework, and the process of monitoring, evaluating, and controlling the sustainable investment practices at the company.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the sustainability practices of a company
• Analyze the features of sustainable finance
• Explain the impact of sustainable investments

Keywords

Sustainability; zero coupon bonds; Sustainable Finance; Sustainable Investment; ESG Framework; Intergovernmental Panel on Climate Change (IPCC); Sustainability Bond Framework; International Capital Market Association (ICMA); Sustainable Bonds; Green Bonds; Social Bonds; Impact assessment