Mango signs first finance deal linked to ESG targets

Spanish fashion retailer, Mango, said that it has signed its first financial arrangement tied to environmental, social, and good corporate governance (ESG) requirements, as it continues to enhance its commitment to sustainability.

Mango has extended the repayment date of its primary syndicated loan until 2028, improving the cost of its debt, while also tripling the availability of revolving credit lines and establishing sustainability conditions, after completing 2021 with its healthiest financial structure in a decade.

If Mango uses 100% sustainable cotton, recycled polyester, and cellulose fibers of controlled origin by 2025, and reduces scope 1 and 2 CO2 emissions by more than 10%, the loan cost will be reduced. Anthesis Lavola wrote a Second Party Opinion that validated the targets.

Margarita Salvans, chief financial officer at Mango, said that this is a significant transaction for the company. Not only have they tied the cost of debt to sustainability measures for the first time, but they’ve also been able to lengthen the payback calendar, lower the cost, and double their financing capacity.

Mango has repaid a total of 240 million euros in credit lines sought from the Instituto de Crédito Oficial (ICO) at the outset of the pandemic, which the business never utilized but held on its financial sheet.