Europcar SLB: driving transparency

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Europcar, the vehicle rental company, announced on April 22 that it failed to achieve any of its three sustainability targets. This triggered a 25bps coupon step-up to its outstanding Sustainability-Linked Bond (SLB) for the last 18 months of its term.

Europcar undershot two emissions intensity targets linked to its fleet of cars and vans, and came up short in its efforts to significantly increase its green vehicle inventory.

SLB price changes related to the target misses, though, are hard to discern given the overall volatility of the instrument.

Still, Europcar’s issuance highlights the important role SLBs play in fostering transparency and accountability in corporate sustainability commitments. The bond structure ensured continued reporting on climate KPIs and opened the door to investor-issuer engagement on transition strategies.