Prada ups its climate change commitment with a new sustainability-linked loan.
Luxury fashion house Prada is going green(er). In 2019, Prada became one of 32 fashion brands to sign onto the G7’s Fashion Pact. It’s centered on three sustainability targets: eliminate greenhouse gas emissions by 2050, innovate a way to eliminate all micro-fiber plastic pollution, and reduce single-use plastic by 2030.
Shortly after the G7 summit, it signed the industry’s first sustainability loan for €50 million. Now it’s signed its third sustainability-linked loan, this one for €90 million to help further its sustainability targets.
“Sustainability, as a value, is now universally recognized and shared, also by the financial industry,” Prada’s chief financial officer Alessandra Cozzani said in a statement. “For us and for all companies, this results in an important stimulus to achieve increasingly ambitious goals toward a sustainable economy. We are proud to be among the first players in the luxury sector to have embarked on this path and to be considered a reference counterpart in the field today.”
The loan will go toward regenerating and reconverting production waste. It’s already reducing waste in its production; the loan will help route waste materials to third parties. Some of that may turn into clothes, but it may also end up as fertilizer or energy sources, the company says.
The Italian luxury label will also work to increase its self-producing energy. It has invested in solar power at both its warehouses and corporate offices. Its production and logistics sites in Levanella, Tuscany, are expected to become nearly 100 percent energy independent over the next few years.
Funding a Sustainable Future
UniCredit, which is providing Prada’s loan will reduce interest rates based on the brand’s ability to hit sustainability targets. These targets include achieving LEED Gold or Platinum certifications for its stores, as well as the use of recycled nylon.
The loan builds on its first in 2019, and €75 million it raised last year to further its sustainability initiatives.
“Sustainability is becoming a key competitive factor for businesses as it increasingly informs the choices of consumers and investors,” said Alfredo De Falco, head of corporate and investment banking, Italy, of UniCredit. “UniCredit is amongst the leading banks in Europe with regard to financing solutions linked to ESG objectives, which can effectively support the transformation of companies’ business models. We are therefore particularly pleased to support Made in Italy excellence such as Prada on its path towards a sustainable economy.”
Prada’s sustainable fashion commitments also led to its elimination of fur in 2019. Its 2020 Spring/Summer collection was its first fur-free collection. Fur isn’t just an ethical issue; it’s a big contributor to greenhouse gas emissions and pollution, too. According to the Animal Protection Institute, it takes about 3 tonnes of feed to produce a single mink coat; and a tonne of feed to produce one fox fur coat.
“The carbon footprint of a mink skin is almost equal to the daily footprint of an average Finnish consumer, and the footprint of a fox skin is approximately three days’ worth. The footprints of fur alternatives are much smaller,” according to a life cycle assessment produced by MTT Agrifood Research Finland.
“The Prada Group is committed to innovation and social responsibility, and our fur-free policy is an extension of that engagement,” Miuccia Prada, the artistic director of the fashion house told the Guardian in 2019. “Focusing on innovative materials will allow the company to explore new boundaries of creative design, while meeting the demand for ethical products.”
The company says its sustainability commitments are more than just marketing. “We are very focused on sustainability,” Carlo Mazzi, Prada’s chairman and executive director, told Vogue in 2019. “We know that we have to invest; it’s clear that we have to make efforts. We are continuing to [look at] saving energy, saving raw materials. But these initiatives are not enough. These [are the] kinds of initiatives we started five, six, seven years ago.”
In 2019, Prada also created a Diversity and Inclusion Advisory Council. The council is co-chaired by Black filmmaker Ava Duvernay and artist and activist Theaster Gates.
“Prada is committed to cultivating, recruiting and retaining diverse talent to contribute to all departments of the company. In addition to amplifying voices of color within the industry we will help ensure that the fashion world is reflective of the world in which we live,” Miuccia Prada said in a statement. “We look forward to working with the Diversity and Inclusion Advisory Council to help us grow not only as a company but also as individuals.”