- The Prada Group signs a sustainability linked loan for ninety million euros
- The five year contract with Bank UniCredit is linked to sustainable performance indicators
- Among other things, Prada wants to promote their waste recycling
Sustainability has become one of the most important issues for companies - also in the luxury industry. Hence, luxury company Prada is now committed to more sustainability - and is again investing millions in sustainable development.
Waste reduction and green energy
The Prada Group signed a loan with the banking group UniCredit to achieve its sustainability goals. Within 5 years, the company aims to improve the recycling of production waste and expands its share of self-generated energy, in order to be able to repay the loan of 90 million euros by 2026.
Prada also plans to use the money to expand its Photovoltaic systems.This should allow its buildings, such as the production and logistics headquarters in Tuscany, to be powered by its own electricity.
Sustainable development bonus
Prada has already proven its commitment for more sustainability in the past. As part of their sustainability strategy "Impact" the brand now wants to become more sustainable in the long term. According to the company, the primary goal is to appreciate people and protect the environment. Prada is also committed to respect ethical values and promote different cultures.
This is not the first loan Prada has signed to accelerate its sustainability development. In 2019, Prada signed the first ever sustainability-linked loan agreement in the luxury industry with the Crédit Agricole Group. The new loan is further linked to a bonus, which the company receives as soon as certain sustainability goals have been achieved. From now on, these will be assessed by an independent party on an annual basis.
Conclusion - green credits as a starting point for sustainable solutions
According to data from BCG and Fashion for Good, The fashion industry needs around USD 20 to 30 billion in financing annually in order to be able to commercialize sustainable products and solutions. Companies like Moncler, Salvatore Ferragamo and Burberry have therefore taken out similar green loans before. A good step in the right direction, but more remains to be done. In order to implement sustainability, the entire value chain and its actors need to be involved. From raw material suppliers to end-of-life solutions. When it comes to green loans, disclosure of performance targets is therefore of the utmost importance - to increase trust and transparency.
