// Mango has added sustainability targets into its business loan repayment terms
// The fashion retailer will pay back less if it achieves targets such as 100% use of sustainable cotton
Fashion retailer Mango has added sustainability criteria into its business loan terms for the first time.
When extending the repayment date of its main syndicated loan to 2028, Mango has introduced the sustainability targets, whereby the cost of the loan will reduce if the Spanish fashion retailer achieves 100% use of sustainable cotton, recycled polyester and cellulose fibres of controlled origin by 2025, and reduces scope 1 and 2 CO2 emissions by more than 10%.
Mango chief financial officer Margarita Salvans said: “This is a historic transaction for the company. Not only is it the first time we have linked the cost of the debt to sustainability indicators, but we have also managed to extend the repayment calendar, improve its cost and double our financing capacity.”
READ MORE: Fewer than 20% of retailers on track to meet sustainability targets
Mango revealed last month that its profits had soared to their highest level in almost a decade in 2021, as turnover neared 2019 pre-pandemic levels.
The fashion retailer reported sales growth of 21.3% to £1.8 billion, with online accounting for 42% of turnover.
Profits rose to £56 million, treble the £17.6 million it recorded in 2019.
Click here to sign up to Retail Gazette‘s free daily email newsletter
