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Unlocking the Trillion-Dollar Fashion Decarbonisation Opportunity


Key Industry Actions and Recommendations

To mobilise $1 trillion through overcoming the aforementioned barriers, a concerted and collaborative effort is needed by key stakeholder groups inside and outside of the industry.


Government—Strengthening Policy Framework and Mechanisms to Catalyse Private Investment

Although regulatory action has begun to influence the industry’s move toward sustainability, more regulatory pressure is needed to support the business rationales and provide incentives that will drive systemic change. Specifically, the public sector should:

  • Offer government-backed loan guarantee funds and/or green banks to de-risk loans to facilities (i.e., green bank takes first loss on loans to facilities), including making direct loans to local market banks in local currency
  • Require brands to meet specific sustainability targets, such as reducing Scope 3 emissions and meeting minimum thresholds for recycled content of fibres
  • Align upcoming regulatory taxonomy with existing methods used to measure, report and reduce GHG emission (i.e., Corporate Sustainability Reporting Directive and Substantiating Green Claims)
  • Link regulations to preferential trade agreements with key importing countries
  • Ramp up its direct investments and technical support, especially for SMEs
  • Provide additional economic incentives for low-carbon production and energy use, such as tax credits, eco-modulated fees, and feed-in tariffs


Philanthropy—Encourage Coordination, Promote Early-Stage Catalytic Work, and Explore Blended Capital Approaches

Philanthropy has a critical role to play in de-risking projects in order to unlock other forms of capital, specifically:

  • In the absence of stricter regulation, some of the required investments don’t meet traditional investor expectations — therefore, philanthropic funders can play an important role in partnering with financial capital to make edge-case projects viable
  • Fund early-stage catalytic work in order to de-risk solutions prior to industry and traditional financial capital taking them to scale
  • Funding and encouraging coordination between existing industry organisations



Manufacturers—Adopt a Strategic Capital Improvement Plan

Many of the investments that are needed to reach net-zero have positive financial and strategic benefits to manufacturers. These benefits are stronger for manufacturers that:

  • Proactively adopt a strategic plan for funding sustainability initiatives and adopting new innovations
  • Discuss and align environmental priorities with key brand partners
  • Join programmes that aggregate multiple manufacturers for better financing options
  • Evaluate projects based on both GHG reduction potential and financial ROI


Brands—Stronger Engagement and Commitment to Innovation and Suppliers

Brands sit at the nexus of all stakeholders and therefore have a critical role to play in accelerating investment in the sector. Some steps that brands can take, include:

  • Offer more support to their suppliers through volume guarantees, pilot projects, and direct investments
  • Create cross-functional working groups with finance, sourcing, and sustainability teams to identify innovative financing opportunities
  • Endorse innovators and work directly with investors to help identify and prioritize projects to fund
  • Given that brands have an easier time accessing capital markets (i.e. green bonds, bank loans, equity issuance, etc.) compared to manufacturers, brands can serve as an important intermediary for moving capital from investors to manufacturers.
  • Work towards a transparent and traceable, connected, supply chain
  • Work with other brands to adopt an aligned roadmap of environmental initiatives so that manufacturer and investors have a clear understanding of collective brand demand
  • Source materials based on GHG emissions, not just price and performance



Banks and Lenders—Prioritise key production regions and innovative financing opportunities As the largest source of funding, banks and lending institutions can accelerate their impact if they:

  • Prioritise key production regions, which are attractive for investment yet underserved by international financiers
  • Support innovative transitional financing opportunities (e..g, coal phase out programme), which are large in size and low in risk
  • Work with brands and manufacturers to align priorities and quickly find solutions to key roadblocks
  • Fund local banks directly in local currency loans in order to reach small- and medium-sized enterprises


Equity Investors and Funding Aggregators—Become Familiar With The Increasingly Large Array of Investment Opportunities

In order to achieve GHG emission targets, equity investors and funding aggregators must:

  • Advance their industry expertise and join forces with brands, supply chain partners and innovators to develop investment propositions that match their risk-return profiles.
  • Aggregate projects together to achieve larger transaction sizes, potentially through the use of technology platforms
  • Evaluate projects based on both GHG reduction potential and financial ROI.


To mobilise $1 trillion through overcoming the aforementioned barriers, a concerted and collaborative effort is needed by key stakeholder groups inside and outside of the industry. The most relevant stakeholders are: financiers (equity and debt), manufacturers, brands, philanthropy and governments. The recommendations centre around creating the conditions required to enable a larger flow of financing towards a net-zero industry. It is critical that stakeholders work together to create an environment where investors are presented with projects and opportunities that are:

  1. attractive from a risk-return perspective
  2. impactful from an environmental (and social) perspective
  3. understandable for funders not intimately familiar with the industry


Reaching net-zero by 2050 will require all of these stakeholder groups to work together and implement these necessary changes in order to transform the apparel industry.