Retail

Background

A major omni-channel fashion group operating many stores and a e-commerce platform set out to align rapid growth with an ambitious circular-economy roadmap: retrofit energy-intensive distribution centres, launch a nation-wide garment take-back scheme, and digitise supplier traceability. Achieving these goals required huge amount of fresh capital, yet the company’s leverage was already brushing covenant ceilings and its carbon-reduction promises lacked a bankable business case. Our consultants were engaged to secure financing that would drive both profitability and measurable sustainability impact—without diluting equity or breaching debt covenants.

Case Study

The Problem

Balance-Sheet Pressure: High existing leverage limited access to traditional term loans.
Capital-Intensive Upgrades: Distribution-centre retrofits and reverse-logistics infrastructure demanded significant up-front investment.
Investor & Regulator Scrutiny: ESG rating downgrades and looming disclosure rules threatened access to competitively priced capital.
Unquantified Impact: Sustainability ambitions were not yet translated into EBITDA, cash-flow, or covenant headroom projections.

Our Solutions

1. Integrated Value–Impact Modelling – Constructed a granular, five-year financial model linking ESG performance to core value drivers. Emissions abatement (per tonne CO₂e avoided) and recycled fibre usage (per kilogram) were quantified in terms of revenue accretion, gross margin uplift, and enhanced debt covenant resilience. The model enabled scenario testing across regulatory, cost, and pricing variables—positioning sustainability performance as a measurable lever for financial optimization.
2. Sustainability-Linked Financing Architecture – Designed and executed a dual-instrument financing solution comprising a sustainability-linked revolving credit facility and a green trade receivables program. Embedded pricing mechanics were indexed to clearly defined KPIs: a 35% reduction in Scope 1 and 2 emissions and a 50% increase in recycled fibre content by 2027. The structure aligned capital costs with operational ESG outcomes, introducing financial incentives for continuous performance improvement.
3. Green Finance Framework with Third-Party Validation – Developed a comprehensive Green Finance Framework in alignment with ICMA principles, articulating use-of-proceeds, impact metrics, and governance protocols. Secured an independent second-party opinion from a global ESG assurance provider, strengthening credibility among debt investors and reinforcing the bankability of the sustainability strategy.
4. Syndicate Engagement and ESG Credit Translation – Orchestrated a targeted engagement program with credit committees and institutional lenders, translating impact metrics into risk-adjusted return narratives. This process demystified ESG-linked credit exposure and facilitated broader syndication through data-driven risk calibration.

Collectively, this integrated approach transformed sustainability from a compliance obligation into a core financial performance driver—enhancing capital access, improving cost of funds, and embedding ESG performance into the firm’s economic architecture.

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