In early November, Prada announced their signing of a €50 million, 5 year sustainability-linked loan agreement (SLL). Through this agreement, Prada has become the first in the luxury brand fashion industry to set sustainability targets through an SLL. Sustainability-Linked Loans are loans that incentivize borrowers to meet sustainability goals by raising or lowering interest accordingly, based on a set criteria. Although any company can claim they will work towards improving their sustainability, things like SLLs provide concrete ‘rewards’ that are beneficial to the company itself, increasing the incentive to be more sustainable.
Not only is Prada the first luxury fashion brand to have a sustainability-linked loan, it is also the first retail company to link an SLL to LEED certification. Tangible targets that Prada has set under their SLL include having a certain number of stores assigned a LEED Gold or Platinum Certification, having a certain amount of training hours for employees, and the increased use of regenerated nylon for the production of goods.
Though Prada is not the first company to utilize an SLL, it is the first of such a large scale in its industry. As sustainability becomes a bigger interest to consumers, especially as the environmental harms of fast-fashion become more transparent, moves like those being made by Prada can help attract and retain environmentally-conscious consumers. Prada has also taken other sustainability initiatives, such as their recent pledge to use only regenerated nylon in their products by the end of 2021.
The use of SLLs can be a way to incentivize eco-minded business choices and hold companies accountable for their sustainability commitments.
Our Work with Prada Group
BEE has helped the luxury retailer achieve sustainability in its store construction and operations worldwide, from LEED consultancy to energy monitoring solutions. Up till date, BEE has registered and certified 70 stores worldwide to achieve LEED Gold.
BEE has certified Prada’s Alexandra House store in Hong Kong, world’s first retail store to be certified under Arc and LEED v4.1 O+M. Read more about this project here.
