BoF Exclusive | Prada’s Commitment to CSR: ‘It’s Natural’

MILAN, Italy — Most people, when they picture the Tuscan countryside, probably imagine rolling hills, streaming sunlight and hilltop towns that look like they were plucked from the pages of a storybook.

But on 1 December two years ago, as an uncontrollable fire raged through the Teresa Moda garment factory on the outskirts of Florence, the landscape would have looked very different. Seven workers were killed that night, all of whom were Chinese migrants.

Although Teresa Moda was producing garments for low-cost, fast-fashion retailers, the tragedy shone a light on an entire network of Chinese-owned factories, operating in the Italian garment industry without meeting basic safety and welfare standards. The result was an industry-wide scandal that dulled the sheen of many of the most prestigious brands across the country, including those controlled by Prada Group.

It is one of the reasons that the company — which includes Prada, Miu Miu, Church’s and Car Shoe — now operates a strict ethics code, which must be signed by all of its manufacturers, and includes an agreement that partners cannot sub-contract production without Prada Group’s approval. At the same time, Prada regularly audits its partners’ factories, employing a team of inspectors that carry out visits to ensure the code is being adhered to and that working conditions are up to par.

The code is part of a wider programme of Corporate Social Responsibility (CSR) initiatives that Prada is communicating both to the industry and, for the first time, to its customers, with the launch of its new CSR website today.

Through a series of case studies, videos and image galleries, the website documents such initiatives past, present and future. In a message published on the site, Carlo Mazzi, chairman and chief executive officer of Prada Group, sets out the programme’s goals “to broaden our horizons and consider the consequences of what we do” — ensuring the business progresses with respect for the environment and observes fundamental ethical principles — but also to “promote culture in all its various forms.”

According to Mazzi, CSR is a key element of any successful business. “In my opinion, [it is] not something that is divided from the life of everybody… A company, especially a big company, has to be aware of these big responsibilities, because it is impossible to set up a business that is just for your single interest,” he tells BoF.

In publicly outlining its commitment to CSR, Prada Group has broken down its agenda into three separate areas: “Know-how,” “Places” and “Culture.” Each articulates a different element of Prada Group’s aims for the programme, although many of the specific initiatives span more than one category.

Firstly, “know-how” — key to every product Prada Group makes and the foundation on which its heritage has been built, the site explains. “The quality of our products is made by the right raw materials and good manufacturing, but is also based on the littlest detail,” says Mazzi. “In order to have this capability, you need to have workers very sensitive about this.”

In the past, Prada has experimented with outsourcing some stages of production to factories in China. “Everybody thinks that the Chinese products are low quality. I have visited some Chinese factories and I realised that they are very able to manufacture everything,” says Mazzi. Prada provided the factories with the material and buttons — everything they needed to manufacture the garments — except for the yarn to sew with.

“So they used yarn very poor and we lost all of the buttons, but they didn’t do [this] because we asked for a lower price, they did it because, for them, there is no sensitivity of the quality in every detail,” he says.

As part of its initiative to preserve and support “know-how,” the Group recently bought and reopened the Tannerie Mégisserie Hervy near Limmoges, France, a leather tannery established in 1936 that had shuttered in 2013 due to financial difficulties. Not only does this secure Prada Group’s brands a supply of top-quality leather (a crucial and limited resource for its businesses), but it also revives traditional artisanal knowledge that would otherwise have been lost.

In the wake of industrialisation and machine-driven production, such initiatives are necessary to preserve the “know-how” of the luxury industry. “It is not simply a new responsibility,” says Mazzi. “To find on the market workers who are already expert is really, really difficult.”

It is for this reason that in 2016, Prada Group will launch Prada Academy: a training hub in Tuscany designed to ensure that the industry as a whole has access to workers trained in the artisanal craftsmanship of luxury goods. The school will have a two-part structure, with the first half of the education providing students with a general diploma, followed by more specialist training.

For Mazzi, the promotion of “culture” benefits the general public, but also has an important role to play as a stimulus and tool for innovation within Prada Group. “It is a natural desire of Prada company, because our activity is something that is closely related to creativity — and creativity is first of all the action of artists,” says Mazzi, who says Prada Group’s businesses have an intrinsic relationship with art.

“Our approach to cultural initiatives are not made just in order to show our ownership of a big piece of art,” he says. “Culture for us is to work together with the artists in order to think and in order to learn… If we can understand [their] new proposals, we can trust these ideas into our design.”

In May this year, this commitment saw the Prada Group open a permanent space in the heart of Milan as a home for the Fondazione Prada. The art initiative was launched in 1995 to bring together ideas from literature, cinema, music, philosophy, science and art, in the hope of helping people understand the changing world and encouraging innovation and reinvention.

A month before the Fondazione opened, Prada Group also completed restoration efforts on the Galleria Vittorio Emanuele II, an historic, glass-ceilinged galleria in Milan, whose construction began over 150 ago. The restoration took a year to complete, taking an team of, on average, 12 restorers 35,000 hours to return one of the city’s most iconic monuments to glory. It was accompanied by a communications project that promoted the value and heritage of Italian culture.

While “know-how” ensures craftsmanship and “culture” encourages innovation, Prada’s support of “places” — the third sector outlined by the Group’s website — encapsulates considerations for the brand that are both business-oriented and CSR-minded.

Through its programmes, the company — whose manufacturing plants, the majority of which are in Italy, extend over 240,000 square metres — aims to reduce consumption of land, re-utilise existing spaces more efficiently and transform its buildings to improve their working environments. Aside from obvious environmental concerns, these initiatives create productive, encouraging spaces where workers can achieve their best results, says Mazzi.

“It is like for an artist — you do not put an artist in a studio with no large windows, but a wonderful landscape. No, you need to get an artist to go into the country in order to see the landscape,” he continues. “We need to put our workers in a place where it could feel comfortable, where it could release their creativity.”

CSR is a particularly pertinent issue for “young people who are more sensitive about these ideas,” he adds. “Sometimes I learn from my daughter — she says ‘Don’t waste so much water!’”

Indeed, environmental and social concerns have global resonance today. In 2014, through CSR initiatives, Prada Group cut its CO2 emissions by 596 tonnes from 2013 and reused or recycled 90 percent of waste from manufacturing sites and headquarters. “The younger generation that are our future customers consider very much this kind of radius, these kind of items,” he adds.

Prada’s commitment to CSR is established and long-standing. The group’s code of ethics was first formally expressed in 2007 and its Industrial Compliance Committee, which ensures that 100 percent of materials come from certified legal sources, was established in 2010.

So why wait until today to communicate these activities?

“I do not know,” replies Mazzi. “Let me say that it is better late than never,” he says, adding that, for Prada Group, CSR is not simply an advertising tool: “If you want to use these items of social responsibility just like an opportunity in order to advertise your products or advertise your brand, in this case, it is completely wrong and useless, in my opinion.”