Prada takes out £43m sustainability loan

10 November 2019 by Grace Coleman
blog author

Prada has become the first in the luxury goods industry to sign up to a sustainability-linked loan, the Italian fashion house has announced.

It has signed up to the five-year €50million (£43m) Sustainability Term Loan deal with Crédit Agricole Group, the world's largest cooperative financial institution.

Prada’s interest rate can then be reduced over this period provided it meets several eco-friendly, sustainability-boosting targets, as set out by the financial services firm. These include LEED (Leadership in Energy and Environmental Design) Gold or Platinum Certification assigned at a certain number of its stores, an amount of training hours for the employees and the use of Prada Re-Nylon (regenerated nylon made from materials such as recycled ocean plastics) for the production of goods.

In June, Prada pledged to have all of its nylons made from recycled materials by 2021. It started producing its iconic nylon bags made from recycled items which retail for around 20 percent less than its virgin nylon bags, with a portion of sales proceeds going towards a UNESCO project focused on sustainability.

Alessandra Cozzani, chief financial officer of Prada S.p.A said: "This transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy.

“We are confident that this collaboration with Crédit Agricole, a leader in its sector, will help to extend the benefits of a responsible business to the financial world."

The combined total of all green and sustainability-linked loans issued to date has reached more than $111.5 billion, according to figures compiled by Environmental Finance, a news and analysis service.

Environmental Finance also stated that the sustainability-linked loan market increased in value from $5bn (£4bn) in 2017 to $40bn (£32bn) in 2018.