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June 8, 2022updated 09 Jun 2022 4:19pm

Apparel Impact Institute Fashion Climate Fund draws major industry names

H&M Group, H&M Foundation, Lululemon and The Schmidt Family Foundation have been named as the lead funders for the Apparel Impact Institute (Aii) US$250m Fashion Climate Fund.

By Hannah Abdulla

Apparel Impact Institute (Aii) and its lead partners have established the Fashion Climate Fund, an upgrade of the existing Clean by Design programme, to encourage collective action for tackling fashion’s supply chain emissions.

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By leveraging a first-of-its-kind collaborative funding model for fashion between philanthropy and corporate entities, the Fund could unlock an estimated $2bn in blended capital across various asset classes, including debt and equity, to help meet the industry’s goal to halve carbon emissions by 2030.

Citing data from its Roadmap to Net Zero: Delivering Science Based Targets in the Apparel Sector report, Aii says 96% of the fashion industry’s emissions come from third-party farms and factories that are shared across the industry and deemed too risky for brands, retailers, or traditional sources of capital to make necessary upgrades and overhauls.

Following the report’s roadmap, and the financial modelling insights set in Aii and Fashion for Good’s report, Unlocking the Trillion-dollar Fashion Decarbonization Opportunity, the Fashion Climate Fund will provide programmatic funding for supplier interventions across the value chain: transitioning to renewable electricity, accelerating next-generation materials, scaling sustainable materials and practices, eliminating coal in manufacturing, and improving energy efficiency. Aii has created strategic collaborations with Textile Exchange, Fashion For Good, and Solidaridad, among others, to address those areas.

Aii says the Fashion Climate Fund is a “bolder, more urgent, and holistic evolution” of Aii’s existing programme, Clean by Design. Since 2018, Clean by Design has aggregated and deployed over $12m in philanthropic funding into energy efficiency programmes for factories, which has unlocked $175m in financial capital in addition to environmental savings.

To best support management of solutions and apply use of funds, Aii will launch a Climate Solutions Portfolio to serve as an online registry of early, mid and late-stage initiatives that tackle supply chain greenhouse gas emissions. Fund partners and strategic advisors will use the portfolio as a tool for industry alignment and decisions on programmes and grants. Major stakeholders for this tool, which will go into Beta development in 2022, include brands, retailers, suppliers, solution providers, innovators, foundations, government grant-makers, private equity and banks.

Lewis Perkins, president of Aii, said: “By aligning industry leaders and climate-focused philanthropists behind scalable solutions, the Fashion Climate Fund opens a pathway for greater collaboration and cross-pollination of solutions, facilitating greater investment and stronger collective action toward the industry goal of halving emissions by 2030, while also seeking climate justice for the citizens and communities where our fashion is made. We are greatly encouraged by the leadership and decisiveness shown today from these lead partners and honoured to play this role as we open up this first phase of the project finance.”

Lululemon’s sustainable business and impact vice president Esther Speck, said: “Lululemon is proud to support the Fashion Climate Fund and collaborate with other brands as we collectively work to accelerate climate action and sustainability solutions in the apparel industry. We remain committed to our climate goals, and are confident that this fund will help to innovate solutions that decarbonise and modernise industry supply chains.”

Leyla Ertur, H&M Group’s head of sustainability, added: “It is time for urgent action and we as H&M Group are constantly looking out for investment opportunities to further strengthen the availability and usage of renewable energy and fund the innovation and distribution of technology that will allow us to fully decarbonise our production and logistics operations. The Fashion Climate Fund has the potential to accelerate the necessary transition of the industry and we are inviting other players to join us on this journey.”

Aii is currently in discussion with additional lead partners, with the goal of each funder committing $10m over eight years. This is the first step of a larger industry and capital markets commitment to reaching science-based targets. Aii will continue to convene more lead partners into this fund and grow strategic relationships with investment capital, both commercial lending and private equity, to reach even greater scale.

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img

How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.

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