Prada Has Signed A Deal That Incentivises It To Be More Eco-Friendly In An Industry First
Prada has announced it has inked a €50 million (£43 million), five-year sustainability term loan with Crédit Agricole Group. The agreement allows for the interest rates to be adjusted annually if certain sustainability targets are achieved. For instance, Prada’s rates will be trimmed if a certain number of stores are assigned a LEED Gold or Platinum certification; if employees meet a set number of training or hours; and if it meets targets for using Re-Nylon, a sustainable nylon substitute, for the production of goods.
The initiative is the first of its kind in the luxury industry, but similar loans have been making inroads elsewhere. According to Environmental Finance data, the sustainability-linked loan market has grown from $5 billion (£4 billion) in 2017 to $40 billion (£32 billion) in 2018. They are particularly prevalent in the chemicals and utilities sectors. “This transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy,” said Prada’s chief financial officer, Alessandra Cozzani, in a statement.
The loan is the latest of a number of sustainable initiatives undertaken in 2019 by the Italian luxury house, which also owns Miu Miu, Church’s and Car Shoe. In May, Prada announced that it would stop using fur in its collections, joining brands like Chanel, Burberry and Gucci. A month later, the brand launched Re-Nylon, a collection of six bags made with Econyl regenerated yarn — created with recycled plastic waste from oceans, fishing nets and textile fibre waste. The company also pledged to convert all virgin nylon used in its products into Re-Nylon by the end of 2021.