Leading luxury goods company Prada announced today that it has signed a five-year, €90 million sustainability linked loan with pan-European Commercial Bank UniCredit.
Sustainability linked securities and loans are an emerging form of sustainable finance, with attributes including interest payments tied to an issuer’s achievement of key performance indicators (KPIs) and associated sustainability performance targets.
According to the terms of the agreement, Prada will enjoy the benefits of a lower interest rate on the loan if it reaches KPI targets relating to regeneration and reconversion of production waste in clothing, leather goods and footwear, as well as increasing the share of self-produced energy.
Prada is a leading company in its industry in the use of sustainability linked financing. The company entered the luxury goods industry’s first sustainable linked loan agreement with Crédit Agricole in 2019, followed by another in 2020 with Japanese bank Mizuho.
Alessandra Cozzani, Chief Financial Officer of Prada S.p.A., said:
“Sustainability, as a value, is now universally recognized and shared, also by the financial industry. For us and for all companies, this results in an important stimulus to achieve increasingly ambitious goals towards 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.”
Alfredo Maria De Falco, UniCredit’s Deputy Head of CIB and Head of CIB Italy, said:
“Sustainability is becoming a key competitive factor for businesses as it increasingly informs the choices of consumers and investors. 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.”