2019 has been an important shift for many luxury fashion houses. For one, they are competing with street wear brands for a new mass of Gen Z clientele, and with the future of the planet in view now more than ever, brands are implementing sustainability strategies left, right and centre. In a world first, Prada is looking to keep to its targets in a new and surprising way. According to Dezeen, the Italian house has signed a £42.9 million GBP loan (approximately $81 million AUD) with French banking group Crédit Agricole, which involves repayment terms conditional to meeting key targets around the sustainability of its products and operations. This is the first time a luxury brand has signed such deal.
Across a five-year loan, the company’s interest rate will be determined annually based on whether the company has hit three specific objectives. The first relates to brick-and-mortar stores, where a certain number must be certified gold or platinum by the green-building rating system Leadership in Energy and Environmental Design. This takes into account a number of practices including the construction of a building, its management, and the number of resources it consumes or waste it produces. Secondly, Prada will have to increase its training hours for its employees. The last objective looks to brand’s pledge to reduce and phase out the use of virgin nylon by 2021. Instead Prada will move to Econyl, a recyclable yarn made from up-cycled plastic waste.
For chief financial officer of Prada Alessandra Cozzani, linking sustainable business practices to financial reward is a bid to engrain these values into the very functioning of the company. “This transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy,” she explained in a statement.