Yesterday, luxury fashion house Prada became the first in the industry to sign a new kind of sustainability deal.
According to Vogue Business, the €50 million deal comes in the form of a 5 year loan from Crédit Agricole bank, and will allow Prada’s interest rates to be adjusted providing they meet certain sustainability landmarks. These are based on three target areas. The first is about green building, based on the number of Prada stores assigned with LEED Gold or Platinum Certifications, next is the number of products made with Prada Re-Nylon (regenerated nylon), and finally the amount of time taken to train Prada employees.
Alessandra Cozzani, Chief Financial Officer of Prada, stated in a press release; “this transaction demonstrates that sustainability is a key element for the development of the Prada Group, increasingly integrated into our strategy.”
The deal marks the latest step in a series of moves towards sustainability for the fashion house. In the sustainability news section on Prada’s website, it is possible to read about the brand’s pledge to go Fur Free by February 2020, and for its Autumn/Winter 2019 collection, the brand revealed it was releasing six recycled nylon bags made with Econyl, a regenerated nylon. On Friday 8th November Prada will be hosting its third meeting in the ‘Shaping a Future’ project, entitled ‘Shaping a Sustainable Future Society’ in New York City.
“The luxury sector is being increasingly committed in developing a sustainable business”, Alberto Bezzi Senior Banker at Crédit Agricole said in the same press release, reiterating that this deal was an important signifier of Prada’s dedication to this goal.
Prada’s deal with Crédit Agricole has been signed at a time when more awareness is being drawn to the environmental impact of the fashion industry. The luxury fashion industry accounts for 8% of all global emissions, which is greater than all air travel and shipping emissions combined.
The luxury fashion industry isn’t perfect
The industry has received criticism recently for its treatment of the environment. A clear example of this is the backlash after it was revealed that Burberry burned £28.6 million worth of unsold stock in 2017 in order to prevent replicas being produced. In response to this, Burberry has been trying to change its business model. Last month, Euronews Living reported that the brand’s partnership with luxury marketplace The RealReal would mark a step towards a more circular future.
The impact of Millennials and Generation Z is also being felt. It was revealed that 87% of Millennials “believe that companies should address urgent social and environmental issues.” As such, young consumers are demanding a more transparent and sustainable supply chain.