by BANKING ON IT: Global bank HSBC is joining the Apparel Impact Institute’s Fashion Climate Fund, pledging $4 million over the next three years to fund projects that reduce supply chain emissions.
FCF Aii is a $250 million hybrid fund that combines contributions from brands and manufacturers, as well as philanthropic donations. Lululemon, H&M Group, PVH Corp. are corporate supporters. and Target Corp., as well as H&M Foundation and The Schmidt Family Foundation, co-founded by former Google chief executive Eric Schmidt.
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The fund was launched in June 2022, with supporters pledging $10 million over eight years to focus on the fashion supply chain. It aims to reach $100 million in philanthropic donations, and $150 million each from brands and manufacturers, to unlock an additional $1.6 billion in debt and equity financing for infrastructure improvements.
London-based HSBC, with a global market capitalization of $148 billion and assets of more than $3 trillion, is the first bank to join the fund. The partnership was announced on Sunday, during a panel held at the COP28 Goals House.
“We’re really trying to change the market around sustainable finance, making sure that the right kind of financial or financing tools are available to suppliers that makes this more incentivized for suppliers,” said Apparel Impact Institute President Lewis Perkins of the group’s overall strategy.
While the providers will do the heavy lifting when it comes to securing funding and making infrastructure upgrades, AII aims to make it more equitable for both the industry and the region.
The Rockefeller Foundation is also joining the partnership to support stakeholder engagement as AII expands their activities.
The idea is to create better terms for suppliers to upgrade their facilities. The goal is to start at the facility level with the brands’ Scope 3 suppliers, such as renewable electricity and waterless dyeing at textile mills and processors, with the intention of expanding to the farm level and Scope 4 raw materials later.
AII is looking at facilities that require “larger capital investments,” Perkins noted, adding that “there is a barrier, a barrier to incentivizing providers” to take on the debt to finance these large infrastructure investments.
While the focus will be on upgrading suppliers that work with AII brand partners, such as H&M, the programs will not be exclusive. Perkins added that since suppliers provide for several brands, there will be a lot of overlap for brands outside the AII universe. “Ultimately AII wants to support the suppliers on their decarbonisation journey and provide funding or funding opportunities that do not need to be tied to the suppliers of these brands alone,” he said. “That’s where there’s a tailwind that’s happening for AII in the industry.”
The group also plans to add more brands to its network, either as key fund partners or at lower contribution levels to enable it to bring smaller brands on board.
The AII’s “Roadmap to Net Zero” report, updated in June, noted that material processing accounts for 53 percent of industry emissions, with raw material processing contributing 15 percent.
“We’re in the 100-day sprint to develop and deliver some specifics [financial] vehicles,” said Perkins, and will bring together stakeholders from 22 brands, suppliers and banks to develop these programs, mixing capital from all contributing sectors. Specific announcements are set for the end of the first quarter or early in the second quarter of next year.
As long as he was attending COP28, Perkins said there was a more powerful mix of brands and suppliers on the ground engaging outside events that were heavily focused on a way to learn from different industries.
However, he noted that he could – and should – participate more in multilateral talks. “There needs to be more representation from brands in the future especially because this is a great place to connect with country strategies, to be in touch with some of the major financial partners that are in development banks and commercial banks and to start on developing programs. ,” he said. “I think a better COP next year would be to have a more organized participation of fashion brand retailers, and then more suppliers will come.”
WAL to wall: The non-profit group Accelerating Circularity has received a new round of support of $1.5 million from the Walmart Foundation.
The group’s mission is to create circular textile-to-textile supply chains and keep used textiles out of the waste streams.
“We are fortunate to have the support of the Walmart Foundation to take the next level of work and move closer to achieving our vision of a world where textiles are no longer wasted,” said Accelerating Circularly president Karla Magruder . “We aim to expand our involvement as we continue to build the business case for circularity and invite new industry collaborators to join us in this endeavour.”
The follow-on $1.5 million will be used to look at the technical feasibility of a textile-to-textile recycling system.
To this end, Accelerating Circularity will develop a tool to create a waste hierarchy to optimize the flow of used textiles based on their potential to be reused or have the greatest potential to reduce greenhouse gases, as well as work with brands and retailers in the USA. creating better disposal and collection systems to keep clothes out of landfills.
Accelerating Circularity also wants to push forward to make textile-to-textile recycling viable by scaling up to what the industry needs to sustain its production needs. The group will work on developing additional circular fibers, yarns and fabrics, and will include new strategic geographies to establish sustainable circular supply chains across North and Central America.
It marks the second grant to Accelerating Circularity from the Walmart Foundation. The group received $1.2 million in 2021, and used the financial infusion to study fabric waste on the East Coast to identify gaps in the recycling and circular chains. The group also launched pilot programs in textile-to-textile recycling to show that it is scalable and can work, in the US and Europe.
ACTUAL SIGNATURE: Inditex sent a virtual trial to its youth-skewed brand Bershka. The technology called YourFit is a virtual fitting room powered by 3DLook, which aims to give more accurate and suitable recommendations. The technology aims to reduce product returns from online sales.
“The fashion industry is changing rapidly, with a strong focus on sustainability and efficiency – and it’s up to industry giants to lead by example. Our virtual fitting room technology has the power to revolutionize the online shopping experience and contribute to the development of a greener, more sustainable and more efficient fashion industry by reducing the number of products related to size and appealing to a more digital generation camera-driven youth,” said 3DLook co-founder and chief commercial officer Whitney Cathcart.
The technology is voice guided and uses front and side photos of the customer; The solution’s precise 3D mapping technology and size recommendation engine provide instant feedback on the best fit and provide a true photorealistic principle experience that is extremely accurate and photorealistic.
Bershka is into the technology and it could be extended to other Inditex brands in the future.
Elsewhere, fast fashion behemoth Inditex Zara expanded its pre-owned resale platform to additional European countries: Austria, Belgium, Croatia, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Netherlands , Slovakia, Slovenia and her homeland. of Spain. The service launched in the UK in October 2022, and was extended to France in September.
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