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H&M and Lululemon back Fashion Climate Fund to cut carbon emissions

By Danielle Wightman-Stone

9 Jun 2022


Image: H&M

Non-profit organisation Apparel Impact Institute (Aii) has announced that Lululemon, H&M Group, H&M Foundation, and The Schmidt Family Foundation are the lead investors in a 250 million US dollar fund that will be used to identify, fund, scale, and measure verified impact solutions to decarbonise and modernise fashion industry supply chains.

The Fashion Climate Fund is a pioneering collaborative funding model between philanthropy and corporate entities and has been designed to unlock an estimated 2 billion US dollars in blended capital in additional asset classes, including debt and equity, to help meet the fashion industry’s ambition to halve carbon emissions by 2030.

The fund aims to drive collective action to tackle fashion’s supply chain emissions by providing programmatic funding for supplier interventions across the value chain, such as transitioning to renewable electricity, accelerating next-generation materials, scaling sustainable materials and practices, eliminating coal in manufacturing, and improving energy efficiency.

Aii has also created strategic collaborations with Textile Exchange, Fashion For Good, and Solidaridad to address those focal areas.

Apparel Impact Institute launches Fashion Climate Fund

This fund comes in direct response to research conducted by the Aii and World Resources Institute that suggests that 96 percent of the fashion industry’s emissions come from third-party farms and factories that are shared across the industry. These are areas deemed “too risky” for brands, retailers, or traditional sources of capital to make necessary upgrades and overhauls.

The Fashion Climate Fund is described by the Aii as “a bolder, more urgent, and holistic evolution” of its existing programme, ‘Clean by Design’. Since 2018, the initiative has aggregated and deployed over 12 million US dollars in philanthropic funding into energy efficiency programmes for factories, which has unlocked 175 million US dollars in financial capital in addition to environmental savings.

Lewis Perkins, president of Aii, said in a statement: “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.”

Leyla Ertur, head of sustainability at H&M Group, added: “It is time for urgent action and the H&M Group is constantly looking out for investment opportunities to further strengthen the availability and usage of renewable energy and fund the innovation and distribution of technology that will allow us to fully decarbonise our production and logistics operations.

“The Fashion Climate Fund has the potential to accelerate the necessary transition of the industry and we are inviting other players to join us on this journey.”

Apparel Impact Institute
Fashion Climate Fund