More money is flowing toward decarboniziing fashion.
As of Wednesday, Lululemon, H&M Group, H&M Foundation and The Schmidt Family Foundation (a philanthropic venture cofounded by Silicon Valley veterans Eric and Wendy Schmidt) are among the first funding partners for the Apparel Impact Institute’s new $250 million climate fund.
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“It’s time for every industry in the world to reconsider business-as-usual to halt the destruction of our climate, and fashion is no exception,” said Wendy Schmidt, cofounder and president of The Schmidt Family Foundation. “The Fashion Climate Fund is a critical step to support and encourage suppliers, designers, manufacturers and retailers to work together toward a significant reduction of waste and carbon emissions in their supply chains and increase responsibility for their water and energy use. It’s going to take all of us to reverse the environmental damage of last century’s industrial infrastructure.”
Each funder will commit $10 million over eight years as the first step in a broader industry effort to meet science-based climate targets and advance fashion supply chains. The Fashion Climate Fund is a more aggressive funding pathway to Aii’s predecessor programs. Since 2018, Aii has deployed more than $12 million in philanthropic funding under its lauded Clean by Design program helping clean up factories’ energy efficiency standards and proof-casing millions in added value.
The Fashion Climate Fund’s roadmap builds upon work and research from Aii, the World Resources Institute, Global Fashion Agenda and Fashion For Good (a strategic partner to Aii along with Textile Exchange and Solidaridad), among others.
The potential unlock is sizable at an estimated $2 billion in blended capital over the next eight years, yet some reports — like Fashion for Good and Aii’s very own “Unlocking the Trillion-dollar Fashion Decarbonization Opportunity” from two years ago — underline transformative change occurs at anywhere between $20 to $30 billion investment per year.
Lewis Perkins, president of Aii, told WWD how the fund fits into the bigger picture.
“What we’re trying to demonstrate is that this is the center of gravity for all of climate work and everyone from Textile Exchange to Fashion for Good to many others — that are working in lowering carbon and coming up with solutions and getting them to pilot — are all beneficiaries of this,” he said. “This is a collective ‘we.’ This is not giving it to Aii, and it’s not going to go into other climate work. This is creating a central pooled fund whereby we all can begin to look at a more consolidated approach as opposed to fragmentation of project work that’s not talking to each other and duplicating efforts.”
In addition to the fund, Aii is launching a “Climate Solutions Portfolio” sometime this year to serve as an online registry of early, mid- and late-stage initiatives that tackle supply chain greenhouse gas emissions. Per Aii and World Resources Institute’s recent “Roadmap to Net Zero” report, 96 percent of the fashion industry’s emissions can be attributed to third-party farms and factories. The Climate Solutions Portfolio will lean into WRI’s roadmap and tiers of investment buckets, be it material efficiency or DEI initiatives.
Similarly, the Global Fashion Agenda’s new “The GFA Monitor” report — which Aii contributed to — identified a handful of investment priorities, including respectful and secure work environments, better wage systems, resource stewardship, smart material choices and circular systems.
Emphasizing Aii’s current role “to improve the making of things,” Perkins also believes in acknowledging the industry’s complicated relationship to degrowth, microplastics and the carbon conundrum.
“Even as we are announcing and launching a climate fund focused on lowering carbon, it is critical that we don’t make carbon emissions reduction the only metric of our success in sustainability because there are unintended consequences of pushing everybody toward recycled [polyester] or pushing everyone toward a different practice,” he said.