Mango signs first finance deal linked to sustainability criteria

Spanish fashion retailer Mango has signed its first finance deal link linked to the environment, social and good corporate governance (ESG) criteria as it continues to strengthen its commitment to sustainability.

After closing 2021 with its healthiest financial structure in a decade, Mango has extended the repayment date of its main syndicated loan until 2028, improving the cost of its debt, while also doubling the availability of revolving credit lines and introducing sustainability criteria.

The cost of the loan will reduce if Mango achieves 100 percent use of sustainable cotton, recycled polyester and cellulose fibres of controlled origin by 2025, as well as reducing scope 1 and 2 CO2 emissions by more than 10 percent. Targets that have been validated in a Second Party Opinion drafted by Anthesis Lavola.

Margarita Salvans, chief financial officer at Mango, said in a statement: "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.”

As well as refinancing its debt, Mango has repaid the credit line requested from the Instituto de Crédito Oficial (ICO) at the start of the pandemic, a total of 240 million euros, which the company never used, but kept on its balance sheet.