Fashion giants are joining forces to share the costs of supply chain decarbonization

A group of clothing brands – including: Best-seller, Gap company, H&M Group
AND Mango — work together to share the costs, risks and responsibilities of reducing CO2 emissions across the fashion value chain. The aim is to encourage a shift to renewable energy and other scalable solutions that will reduce CO2 emissions from textile factories producing their goods.

To meet global climate goals, fashion brands must roughly halve greenhouse gas emissions in their supply chains by 2030. The necessary technologies exist for this; however, financial burdens and extended payback times discourage many factories from adopting electrification and renewable energy solutions, slowing progress towards decarbonization goals.

The Future supplier initiative
(FSI) – facilitated by Fashion Pact
in association with Clothing Impact Institute, Guide
AND DBS Bank — introduces an unprecedented combination of financial security, technical expertise and economic incentives. The collective financing model removes the main barriers that prevent many textile mills from reducing resource use or implementing renewable energy solutions.

Through the Future Suppliers Initiative, participating companies anticipate leading the way to reducing CO2 emissions from the fashion value chain (range 3), which currently accounts for approximately 99 percent of the sector’s total emissions.

“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,” he says. Ewa von AlvenslebenExecutive Director and Secretary General for Fashion Pact. “The Future Suppliers Initiative is a unique opportunity for apparel retailers to join forces and make progress on science-based goals, as well as 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.”

Similar in principle to industry collaboration efforts such as those recently launched Clean Energy Purchasing Academy
– wherein Apple, Nike, Amazon, Meta, PepsiCo AND REI Cooperative
they work with Clean Energy Buyers Institute equipping its suppliers with the technical readiness to seek and receive clean energy; or NRDC‘S Cleanliness by design
program that also aimed to clean up clothing production – FSI says it will develop and fund projects that will enable clothing factories, manufacturers and brands to achieve short-term science-based goals.

“For us, decarbonizing the supply chain is a shared responsibility,” he says Thomas Børglum JensenChief Financial Officer
Best-seller — a Danish, family-owned fashion company with brands including: Jack jones,
JJXX, Just AND Vero Moda. “If we as companies want to achieve our science-based goals, we need to innovate and join forces with the industry. Collective financing allows us to bridge the gap in implementing greener supplies and ensure the transition to renewable energy. The Future Suppliers Initiative is crucial in this sense and is a great example of the industry’s combined efforts.”

Starting with Bangladesh and Vietnam

FSI manages multiple cohorts of providers in different geographic locations. The first two will take place on Wed Bangladesh AND Vietnam — two of the world’s largest fashion-producing countries — with cohorts also planned China,
India, Italy AND Turkey. Baseline measurements and ongoing reduction assessments will document the impact of projects funded and implemented under the Initiative. The alliance will prioritize projects with significant impact potential and those that can be applied on a large scale in the fashion industry.

“On H&M GroupWe want to lead in our industry, and decarbonizing our supply chain is one of the most important keys to further reducing our emissions,” says H&M CEO Daniel Ervér. “The initiative by 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 us in our efforts to address our industry’s negative climate impact.”