Fashion Giants Join Forces to Share Cost of Supply Chain Decarbonization | Sustainable Brands

A group of apparel brands — including Bestseller, Gap Inc, H&M Group
and Mango — are collaborating to share the costs, risks and responsibilities
of reducing CO2 emissions in the fashion industry’s value chain. The goal is to
drive the transition to renewable energy and other scalable solutions that will
reduce CO2 emissions from the textile factories that manufacture their goods.

To meet global climate goals, apparel brands must cut their supply chain
emissions roughly in half by 2030. The technologies required to do this exist;
but the financial burden and extended payback time deter many factories from
adopting electrification and renewable-energy solutions, slowing progress
towards decarbonization goals.

The Future Supplier Initiative
(FSI) — facilitated by The Fashion
Pact
in collaboration with the Apparel Impact
Institute, Guidehouse
and DBS Bank — introduces an unprecedented
blend of financial security, technical expertise and economic incentives. The
collective-financing model addresses the main barriers preventing many textile
factories from reducing resource consumption or implementing renewable-energy
solutions.

Through the Future Supplier Initiative, participating companies anticipate
leading the path towards reducing CO2 from the fashion industry’s value chain
(scope 3), which currently accounts for about 99 percent of the sector’s total
emissions.

“The cost of inaction on climate change is unaffordable. If the fashion sector
is to meet its goals and transform its supply chain, we urgently need to address
the gap between ambition and action,” says Eva von
Alvensleben,
Executive Director and Secretary General of The Fashion
Pact. “The Future Supplier Initiative is a
unique opportunity for fashion retailers to join forces and drive progress
towards science-based
targets,
and offer much needed financial and technical support to apparel suppliers in
their journey to decarbonization. No single business alone can solve this
challenge; but by sharing the costs, risks and responsibilities of the
transition to renewable energy, we can build an ecosystem of solutions and
kickstart a new era of change.”

Similar in principle to industry-collaborative efforts such as the recently
launched Clean Energy Procurement
Academy
— in which Apple, Nike, Amazon, Meta, PepsiCo and REI Co-op
are working with the Clean Energy Buyers Institute to equip their suppliers
with the technical readiness to explore and adopt clean
energy;
or the NRDC’s Clean by Design
program,
which was also aimed at cleaning up apparel manufacturing — FSI
says it will develop and finance
projects that allow apparel mills, manufacturers and brands to achieve near-term
science-based targets.

“For us, supply chain decarbonization is a shared responsibility,” says Thomas
Børglum
Jensen, CFO of
Bestseller — a Danish, family-owned fashion company
home to brands including Jack & Jones,
JJXX, Only and Vero
Moda. “If we as businesses want to achieve our
science-based targets, we need to innovate a way forward and join forces with
the industry. Collective financing allows us to bridge the implementation gap
towards greener supply and secure a transition to renewable energy. The Future
Supplier Initiative is critical in that sense and a great example of industry
combined effort.”

Starting in Bangladesh and Vietnam

FSI manages multiple supplier cohorts in different geographies. The first two
will take place in Bangladesh and Vietnam — two of the world’s largest
fashion-producing countries — with cohorts also planned for China,
India, Italy and Turkey. Baseline measurements and ongoing reduction
assessments will document the impact of the projects funded and implemented
through the Initiative. The alliance will prioritize projects with significant
potential for impact and those that can be widely scaled across the fashion
industry.

“At H&M Group, we want to lead the way within our industry and decarbonizing our
supply chain is one of the most important keys to further reduce our emissions,”
says H&M CEO Daniel Ervér. “The
Future Supplier Initiative shows that solutions are readily available and come
with proven impact, but it requires commitments from brands and investors that
are willing to invest. We encourage others to join our efforts to tackle our
industry’s negative climate impact.”