Prada Is The First Luxury Fashion House to Ink a Sustainability Loan
The Italian fashion group continues to champion sustainability with its latest ‘green’ initiative.
Prada has signed a 5-year-long sustainability term loan worth €50 million with Crédit Agricole Group this past Tuesday. The first-of-its-kind “green” agreement puts in place interest rates that can be adjusted annually according to how successful the Italian fashion company is in meeting its sustainability-linked targets. For example, the Group will cut down on Prada’s rates if the company employees meet a set number of training or hours or if the house meets targets for using Re-Nylon, a sustainable nylon substitute, for the production of goods.
Though this initiative is very unique in its concept, Crédit Agricole has previously given similar sustainability-linked loans to entities like natural gas distribution company Enel and Hong Kong’s Swire Properties. The loan is the latest of several sustainability projects recently undertaken by Prada S.p.A.: the group has announced that it would stop using fur in its products earlier in May and launched Re-Nylon, a collection of six bags made with Econyl regenerated yarn, a month later.
“This transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy,” Prada’s chief financial officer Alessandra Cozzani told Vogue Business.
Though the company has recently made a measurable move towards sustainability (also pledging to convert all virgin nylon used in its products into Re-Nylon by the end of 2021), other fashion houses are no less qualified for this loan than Prada is. “Any luxury company can aspire at inking sustainability-linked loans,” said Mario Ortelli, managing partner of luxury advisory firm Ortelli&Co.
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