Bocconi Students for Sustainable Finance
Prada is an Italian luxury fashion house founded in 1913 by Mario Prada and his brother Martino.
Today Prada designs, manufactures, promotes and sells high-end leather goods, ready-to-wear and footwear through various brands, and it is one of the most popular luxury brands in the world.
But Prada is also a company who is paying an increasing attention on the ESG themes. According to this aspect, Prada is the first firm in the luxury industry to sign a loan linked to sustainability with Crédit Agricole Group, in the November 2019.
In general, “Sustainability linked loans are loans which incentivize the borrower’s achievement of ambitious, predetermined sustainability performance objectives. The borrower’s sustainability performance is measured using sustainability performance targets which include key performance indicators, external ratings and/or equivalent metrics and which measure improvements in the borrower’s sustainability profile”.
Sustainability linked loans aim to facilitate and support environmentally and socially sustainable economic activity and growth and the goal of the SLLP is to promote the development and preserve the integrity of the sustainability linked loan product by providing guidelines which capture the fundamental characteristics of these loans. (“Sustainability Linked Loan Principles”, Loan Market Association, 2019)
In particular, the one Prada signed with Crédit Agricole in 2019 were a five-year 50 million euros loan with interest rate that could be reduced on the achievement of the following objectives: number of stores with LEED Gold or Platinum certifications, number of training hours for employees and the use of Prada Re- Nylon (regenerated nylon) for its own production.
Prada loved this experiment, in fact, on February 10, 2021 the company signs a new loan linked to sustainability with the UniCredit banking group. This one is characterized by the application of a mechanism that provides the reduction of the interest rate upon the achievement of quantitative targets on environmental and sustainability aspects and the final balance of this ESG’s aspects will be certified on an annual basis by a third and independent part.
Author: Alberto Fabiani
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Prada is an Italian luxury fashion house founded in 1913 by Mario Prada and his brother Martino.
Today Prada designs, manufactures, promotes and sells high-end leather goods, ready-to-wear and footwear through various brands, and it is one of the most popular luxury brands in the world.
But Prada is also a company who is paying an increasing attention on the ESG themes. According to this aspect, Prada is the first firm in the luxury industry to sign a loan linked to sustainability with Crédit Agricole Group, in the November 2019.
In general, “Sustainability linked loans are loans which incentivize the borrower’s achievement of ambitious, predetermined sustainability performance objectives. The borrower’s sustainability performance is measured using sustainability performance targets which include key performance indicators, external ratings and/or equivalent metrics and which measure improvements in the borrower’s sustainability profile”.
Sustainability linked loans aim to facilitate and support environmentally and socially sustainable economic activity and growth and the goal of the SLLP is to promote the development and preserve the integrity of the sustainability linked loan product by providing guidelines which capture the fundamental characteristics of these loans. (“Sustainability Linked Loan Principles”, Loan Market Association, 2019)
In particular, the one Prada signed with Crédit Agricole in 2019 were a five-year 50 million euros loan with interest rate that could be reduced on the achievement of the following objectives: number of stores with LEED Gold or Platinum certifications, number of training hours for employees and the use of Prada Re- Nylon (regenerated nylon) for its own production.
Prada loved this experiment, in fact, on February 10, 2021 the company signs a new loan linked to sustainability with the UniCredit banking group. This one is characterized by the application of a mechanism that provides the reduction of the interest rate upon the achievement of quantitative targets on environmental and sustainability aspects and the final balance of this ESG’s aspects will be certified on an annual basis by a third and independent part.
Author: Alberto Fabiani
