Lululemon and H&M Group Among Donors for $250 Million Fund to Decarbonize Fashion Supply Chains

Lululemon, H&M Group and the H&M Foundation are among some of the lead funders for a new initiative meant to help decarbonize and modernize fashion industry supply chains.

Apparel Impact Institute (AII), a nonprofit organization that focuses on climate action and fashion sustainability, announced on Wednesday the lead funders in its $250 million Fashion Climate Fund.

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Lululemon, H&M Group, H&M Foundation, and The Schmidt Family Foundation were all named as lead founders of the fund, which works to find a model to help the fashion industry halve carbon emissions by 2030. The goal is to announce more donors in the coming months, with each donating $10 million over eight years.

“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,” said president of AII Lewis Perkins. “We are greatly encouraged by the leadership and decisiveness shown today from these lead partners and honored to play this role as we open up this first phase of the project finance.”

Many fashion brands and retailers have signed on to support the Science Based Targets initiative (SBTi), which includes a goal to achieve net-zero value chain greenhouse gas emissions by 2050. However, AII found in a recent report that 96% of emissions in fashion come from third-party farms and factories, which are more difficult to control.

The Fashion Climate Fund aims to improve sustainability across the supply chain in areas such as electricity, materials, manufacturing and energy efficiency. The fund builds off of AII’s Clean by Design program, which has deployed over $12 million in funding for energy efficiency programs since 2018.

In another recent move towards sustainable practices, Lululemon in April expanded its “Lululemon Like New” trade-in and resale program to all U.S. stores. Via the program, shoppers can trade-in their used Lululemon items at more than 390 stores in exchange for a gift-card. 

For two years, H&M has teamed up with Danone AQUA for the bottle2fashion project and has transformed plastic waste into recycled polyester. Shein, another major player in the fast-fashion space, also oversees programs that prioritize recycled materials for packaging content and seek out responsibly sourced materials for its clothes.

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