Prada Pledges Sustainability By Becoming First Fashion Leader to Sign "Green" Loan
The five-year deal allows for adjusted interest rates when sustainability-linked targets are met.
Prada has signed a €50 million EUR (approximately $55 million USD), five-year-long sustainability-linked loan with the Crédit Agricole Group. The Italian fashion house is the first in the industry to sign a “green” deal of this kind.
The agreement stipulates that interest rates can be adjusted annually if Prada meets certain sustainability-linked targets, like certifying Prada stores as LEED Gold or Platinum, or providing employees with a set number of training hours. Efforts to build on the brand’s Re-Nylon initiative — a six-bag collection made from recycled plastic and textile waste that Prada launched in June – also qualifies the company for lowered interest rates.
Prada’s announcement follows its pledge in May to stop using genuine fur. The company’s Chief Financial Officer Alessandra Cozzani expressed her support for continued sustainability-related efforts. “This transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy,” she told Vogue Business.
As more fashion and beauty brands incorporate eco-friendly practices into their business, Prada’s decision is a logical one. Mario Ortelli, managing partner of luxury advisory firm Ortelli&Co., predicts others will follow in Prada’s footsteps. “Now that [luxury] consumer and company awareness of sustainability has noticeably increased, a lot of other companies are to be expected to take on sustainability-linked loans,” he said.
- Vogue Business