The world’s largest brands have committed to decarbonizing the fashion sector

The Future Suppliers Initiative, led by The Fashion Pact in partnership with the Apparel Impact Institute, Guidehouse and DBS Bank, offers a collective financing model to support deep decarbonization in the apparel sector.

The initiative will launch with a program in Bangladesh, supported by Bestseller, Gap, H&M Group and Mango. The Future Provider initiative is actively recruiting more brands with a view to expanding into other key apparel producing regions, including Vietnam, India, China, Italy and Turkiye.

In the first year, the cohort will prioritize factories based on impact, develop technical proposals to achieve deep decarbonization, and de-risk supplier credit to deliver these projects at more attractive rates. The second year of the program will focus on implementing projects and monitoring the impact of these investments on the climate.

The Future Provider initiative, led by The Fashion Pact with partners such as Apparel Impact Institute and DBS Bank, offers collective financing to drive deep decarbonization in the Bangladeshi apparel sector, initially expanding globally. It aims to reduce emissions by facilitating investment in renewable energy and energy-saving technologies in garment factories.

By including more brands and geographies in the program, the Future Suppliers Initiative aims to support brands and their supply chains in achieving their near-term science goals by 2030, H&M Group said in a press release.

Given that an estimated 99 percent of fashion brands’ total emissions occur in the supply chain (Scope 3), the Future Suppliers Initiative aims to accelerate the transition to net zero by sharing the financial risks and responsibilities associated with the transition to Tier 1 and renewable energy sources. 2 clothing and textile factories.

The initiative is a brand-agnostic mechanism that will develop and fund projects to support both brands and suppliers in achieving their science-based targets (SBT) and maintaining the 1.5 degree trajectory.

A combination of technical support and financial incentives will be used to overcome the barriers that prevent many factories from adopting electrification and renewable energy solutions.

“The costs of inaction on climate change are unbearable. If the fashion sector is to achieve its goals and transform its supply chain, we must urgently close the gap between ambition and action. The Future Suppliers Initiative is a unique opportunity for apparel retailers to join forces and make progress on science-based goals and offer much-needed financial and technical support to apparel suppliers on their decarbonization journey. No single company can meet this challenge alone, but by sharing the costs, risks and responsibilities of transitioning to renewable energy, we can build an ecosystem of solutions and usher in a new era of change,” she said. Eva von Alvensleben, Executive Director and Secretary General of The Fashion Pact.

To achieve significant emissions reductions, suppliers can adopt a range of energy-efficient technologies and processes, as well as switch to renewable energy sources, often with long payback periods that can last decades. This deters many suppliers from adopting electrification and renewable energy solutions, hindering progress towards decarbonization goals.

To accelerate progress and fill these gaps, the Future Suppliers Initiative aims to reduce supplier costs by working with fashion brands to reduce the cost of capital for loans that can accelerate decarbonization.

In addition to financial incentives, technical support will be provided to help suppliers identify and implement low-emission technologies and solutions. As the release added, baseline analyzes and emissions reduction monitoring will also be carried out to demonstrate the impact of projects financed and implemented under this initiative.

The initiative aims to identify and match projects with the greatest impact potential. By identifying common factory units, interventions and costs, it will enable a global and regional collaborative effort by fashion brands, moving from targets and action plans to implementation and measurable reductions, beyond energy efficiency measurements.

“At Bestseller we are working intensively to improve our impact on the climate. We have largely managed to tackle our direct emissions, but it is clear that emissions across our value chain require ambitious efforts at a scale that requires innovative, collaborative solutions. The Future Suppliers Initiative represents a new way of thinking about how fashion companies can connect and accelerate the solutions needed for a green transition across the industry and especially in manufacturing countries. We know that as an industry we still have many steps ahead of us, but we believe that the Future Suppliers Initiative can bring positive and significant change,” he said. Anders Holch Povlsen, owner and CEO of Bestseller.

“Gap is committed to closing the climate gap by working with our supply chain partners to reduce emissions. We look forward to making our commitment even more meaningful. That’s why we’re participating in the Future Suppliers Initiative, which brings together brands, technical partners and financial institutions to take meaningful climate action across the industry, better and faster than any single company can do on its own,” he said Richard Dickson, president and CEO of Gap.

“At the H&M Group, we want to lead our industry, and decarbonizing our supply chain is one of the most important keys to further reducing our emissions. The initiative of future suppliers shows that solutions are easily available and have proven effectiveness, but requires commitment from brands and investors who are willing to invest. We encourage others to join our efforts to address our industry’s negative impact on the climate,” he said Daniel Ervér, CEO of the H&M Group.

“Mango sees sustainability as a journey the fashion industry must take to create a more equitable society and reduce its environmental and social impact. To achieve our climate ambitions, fashion companies inevitably need to decarbonize their supply chains. The joint effort representing the Future Suppliers Initiative is certainly a huge step forward for the industry to provide factories with affordable financing to engage in energy efficiency initiatives, and a sign that collaboration is possible on our path to sustainability,” he said. Toni Ruiz, CEO of Mango.

“To achieve the industry’s ambitious climate goals, it is imperative that every stakeholder uses their influence to drive tangible change. A concerted effort between brands and retailers is essential to create the conditions in which suppliers are motivated and able to make such investments. Financial institutions are willing to offer better financing options, provided there is a solid pipeline of providers willing to commit to decarbonization efforts. “These efforts are accelerating as the industry realigns its resources and investments toward the most effective solutions,” he said Lewis Perkins, president and CEO of Apparel Impact Institute.

“Accelerating the achievement of net zero in supply chains requires the rapid scaling of low-carbon technologies, innovative financing models and thoughtful actions by the partner ecosystem to accelerate adoption. The Future Suppliers Initiative brings these elements together to offer practical assistance by directly financing factory retrofits to help suppliers improve energy efficiency and reduce their carbon footprint. The decarbonization of the global fashion sector transcends geographical boundaries – DBS is honored to be the first bank and founding partner of this groundbreaking initiative, working with global brands to create a more sustainable fashion industry. This way we have a real impact on the real world.” Tan Su Shan, Head of Institutional Banking Group, DBS Bankhe said.

“The decarbonization of suppliers must progress faster to meet science-based climate goals. The Future Supplier Initiative (FSI) aims to bridge the gap between the way we do business today and the needs of operating in a world constrained by climate change. FSI provides technical, financial and program management support to help suppliers remain sustainable, resilient and competitive,” he said Gaurav Menon, Partner at Guidehouse.

Fiber2Fashion Information Desk (RR)