Future Supplier Initiative has launched its inaugural collective financing model in Bangladesh, partnering with four leading fashion companies worldwide to bolster apparel suppliers in their shift toward decarbonisation.
H&M Group, Gap Inc, Mango and Bestseller have committed to the initial decarbonisation programme in Bangladesh, according to a statement released on Thursday.
The Initiative is actively seeking additional brands and plans to extend its efforts to other critical apparel manufacturing regions such as Vietnam, India, China, Italy and Turkey.
Facilitated by The Fashion Pact in collaboration with Apparel Impact Institute, Guidehouse and DBS Bank, the Future Supplier Initiative introduced a collective financing approach aimed at supporting extensive decarbonisation within the apparel sector.
According to the initiative, nearly 99 per cent of fashion brand emissions arise from supply chain (ccope 3 emissions), underscoring its mission to accelerate transition to net zero by distributing the financial risks and obligations associated with adopting renewable energy sources in tier 1 and 2 garment and textile factories.
The initiative, designed as a brand-agnostic mechanism for project development and financing, will assist brands and suppliers alike in meeting their science based targets and aligning with 1.5-degree trajectory, as outlined in a statement from H&M Group, the statement said.
To overcome existing barriers preventing many factories from adopting electrification and renewable energy solutions, a blend of technical support and financial incentives will be employed.
During its inaugural year, the initiative鈥檚 cohort will prioritise factories based on their potential impact, develop technical proposals for achieving comprehensive decarbonisation and mitigate lending risks to suppliers by offering more favourable terms for project implementation.
In its second year, the programme will concentrate on project execution and monitoring to evaluate the climate impact resulting from these investments.
In addition to financial incentives, the initiative will furnish technical assistance to aid suppliers in identifying and implementing low-carbon technologies and solutions.
Baseline assessments and ongoing monitoring of emission reductions will also be conducted to validate the efficacy of projects financed and implemented through the initiative.
The initiative aimed to pinpoint and support projects with the highest potential for impact, fostering a collaborative global and regional effort among fashion brands.
This shift from setting targets and roadmaps to concrete implementation and measurable reductions goes beyond mere energy efficiency metrics, the release read.
Eva von Alvensleben, executive director and secretary general of The Fashion Pact, said that the cost of inaction on climate change was unaffordable. To achieve its objectives and overhaul its supply chain, the fashion sector must swiftly bridge the divide between ambition and implementation, she added.
鈥楴o 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,鈥� she said.
鈥榃e know that as an industry, we still have many steps ahead of us, but we believe that the Future Supplier Initiative can make a positive and significant difference,鈥� Anders Holch Povlsen, owner and chief executive officer of Bestseller said.
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, H&M Group CEO Daniel Erv茅r said
Toni Ruiz, CEO of Mango, said that to achieve this industry鈥檚 ambitious climate goals, it was imperative that every stakeholder leveraged their influence to drive tangible change.
A joint effort among brands and retailers is essential to create conditions where suppliers are motivated and capable of making these investments, he added.