pursued such arrangements in
the last couple of years. In 2018,
AccorHotels received a €1.2 bil-
lion banking credit whose margin
will be dictated by environmental
and social performance, par-
ticularly the creation of more
carbon-neutral buildings. And
last summer Chinese developer
Swire Properties converted an
existing €58 million loan into a
sustainability-linked one that will
be partly used to fund ongoing
green developments such as
Two Taikoo Place, a major new
office tower in Hong Kong.
Such financial products
make particular sense for retail-
ers – a notoriously debit-hungry
sector – helping to reduce the cost
of maintaining their liabilities
as well as satisfying consumer
desire for better climate stew-
ardship. And the growth in
sustainability-linked loans could
have a particularly dramatic effect
on retail spaces as more brands
aim to achieve green building
certifications such as LEED – the
most widely used – in order to
meet creditor demands.How sustainability-linked loans could affect
retail design
4
What could this look like in
practice? Achieving a high
LEED score would require retail
designers to maintain more
non-structural elements such as
interior walls, doors, floor cover-
ings and ceiling systems. It would
even promote a kind of proxy
localism, as points are awarded
for using materials drawn from
each store’s immediate region.
Access to light would be key, as
well as offering external views
in any regularly occupied areas
of the building. At a time when
store design is going through a
maximalist period, both in terms
of the extravagance of interior
aesthetic and the pace of change,
meeting such criteria will be chal-
lenging. Retail currently makes
up only 12,873 of the 100,000+
LEED-certified projects around
the world. If that number is to
grow, retail designers will likely
be required to rethink how to
achieve excess. PMPrada has signed the first busi-
ness loan in the luxury goods
sector with an annual interest rate
that is linked to its environmental
practices. The five-year, €50-mil-
lion loan with France’s Credit
Agricole Group will see interest
rates lowered based on the
‘achievement of ambitious targets
related to sustainability’. Key
among these is ensuring that a set
number of retail stores meet gold
or platinum LEED (Leadership
in Energy and Environmental
Design) green building standards.
Prada is one of an increas-
ing number of businesses
exploring how they can link
access to capital to their sustain-
ability programmes, to the benefit
of both. Data from Bloomberg
shows that sustainability-linked
loans have grown in value from
€9.5 billion in 2017, the year they
were introduced, to just over €72
billion in 2019. For many of these
deals, reducing the environmen-
tal impact of building develop-
ments is a core stipulation.
Brands across sectors such
as hospitality and workplace haveOne of the stipulations of Prada’s
sustainability-linked loan is that
a set number of retail stores meet
strict green building standards.
The brand’s Iconsiam concept store
in Bangkok is pictured.Co
ur
tesy (^) o
f (^) P
rad
a
22 Business of Design