Why
We acknowledge the negative impact of scope 3 emissions in the fashion industry and the unique challenges they pose in multi-tier supply chains.
Addressing energy efficiency, electrification and renewable energy are key to driving decarbonisation of the fashion industry. Suppliers need both technical & financial support to transition at the pace required for apparel brands to achieve their Science Based Targets and stay within the 1.5 degree pathway.
There is an increased focus to decarbonise our industry- however, transitioning to renewables in supplier factories requires substantial investments. With FSI we aim to bridge the implementation gap towards 2030 and beyond.
The financial burden and extended payback time deter many factories from embracing electrification and renewables
Why collective financing?
The cost of inaction on climate is unaffordable, but for many the cost of action, at the speed and scale required, has felt unattainable. The Future Supplier Initiative is an opportunity to address that gap between ambition and action, innovation and implementation, by putting in place the technical and financial support needed. This is an opportunity to kickstart a new era of action, powered by the willingness to work together across the value chain, to share the risks, costs and rewards that come with challenges such as the switch to renewable energy and the transition to lower impact production. Challenges too big for any individual organisation or brand to solve alone.
Eva von Alvensleben
Executive Director and Secretary General, The Fashion Pact
To achieve this industry’s ambitious climate goals, it’s imperative that every stakeholder leverages 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. Financial institutions are poised to offer better finance options provided there’s a robust pipeline of suppliers ready to embrace decarbonisation efforts. The acceleration of these efforts occurs when the industry aligns its business strategies, resources and investments toward the most impactful solutions.
Lewis Perkins
CEO, Apparel Impact Institute
Decarbonising the manufacturing process presents a challenge that no single fashion brand or supplier can take on alone. It demands significant investments and collective action from brands to support their supply chain partners in implementing water and energy measures, as well as adopting renewable energy and heat solutions. It is encouraging to see that The Fashion Pact and partners are promoting this initiative. The Future Supplier Initiative is a tangible way to help brands build supply chain resilience and contribute to their water, biodiversity and climate ambitions.
Payal Luthra
Global Apparel and Textiles Lead, WWF
What others say
The fashion industry urgently need to catalyse tangible actions removing hurdles to fund decarbonisation through increased access to affordable capital.
Business of Fashion
Why is funding fashion’s climate goals so hard?
Most of fashion’s environmental impact takes place during energy-intensive manufacturing activities like dyeing and treating fabrics. The majority of the industry’s profits, however, go to large brands. And while many of fashion’s biggest businesses are setting impressive sustainability goals, they’re mostly not stumping up cash to help support the transition. Meanwhile, many manufacturers are small and medium-sized businesses in emerging economies that already struggle with access to affordable capital, let alone find the financing for long-term climate projects with dubious payback prospects…
“All the pressure of decarbonisation and the funding of decarbonisation lies with suppliers,” said Saqib Sohail, responsible business projects lead at Pakistan-based denim manufacturer Artistic Milliners. “The risk, we feel, is not shared across the whole supply chain.”
McKinsey & Company
Make collaborations action oriented
Not only will taking these actions help fashion executives achieve accelerated [greenhouse gas] abatement at a modest cost, but they can also create substantial business value in sustainable transformations. To capture the opportunity, time is of the essence. Early movers can realize commercial value and positive effects on brand equity for years to come. We also see an early-mover advantage on the cost side: while the cost of sustainable solutions will likely fall over time, we expect that a widening supply-and-demand gap in the near term will increase the price of scarce sustainable solutions and assets (including materials, machinery needed for decarbonisation, renewable energy, and manufacturers with more sustainable processes). Moving early can help a brand secure access at lower prices than its peers can and reach its 2030 decarbonisation targets.
Impact of the Fashion Industry
For 2022, Aii and the World Resources Institute (WRI), using data from Cascale, Wordly and Textile Exchange, estimated total apparel sector GHG emissions for 2022 to be 878.7 Mt CO2e, or 0.879 Gt. Roughly 2 percent of annual global greenhouse gas emissions.
Assuming business-as-usual growth for the sector, emissions are projected to be 1.243 Gt in 2030. To stay within a 1.5°C trajectory — achieving 45 percent reduction by 2030 — the sector would need to reduce emissions from 0.889 Gt in 2019 to 0.489 Gt by 2030.
Projected Apparel Sector Emissions (Gigatonnes)
Source: Apparel Impact Institute: Taking Stock of Progress Against the Roadmap to Net Zero
Supply chain split
SCOPE 1 + 2
approximately
1%
of GHG Emissions
SCOPE 3
approximately
99%
of GHG Emissions
Scope 3 split
TIER 4
Raw Material Extraction
24%
of GHG Emissions
TIER 3
Raw Material Processing
15%
of GHG Emissions
TIER 2
Material Production
52%
of GHG Emissions
TIER 1
Finished Product Assembly
9%
of GHG Emissions