The Fashion Climate Fund

We currently have seven lead funders (HSBC, Target Corporation, PVH Corporation, Lululemon, H&M Group, H&M Foundation, and The Schmidt Family Foundation) that are each expected to fund $10M by 2030.

Apparel Impact Institute (Aii) is managing the fund. Aii has aggregated philanthropic and industry contributions to fund programmatic work in the apparel and footwear supply chain since 2018. With a $250 million fund, we will accelerate climate interventions by deploying up to $30 million a year into this work. The goal is to apply the full budget each year in alignment with our partners, although we recognize that supply chain volatility still exists which may require us to carry forward funds into the following year.

Yes, Aii tracks the climate impact of every intervention that we are funding in the supply chain.  We have a target cost of carbon per intervention (from solar electricity to use of recycled poly).  We report the return on impact (as measured in CO2 emissions saving per dollar invested) for every program. 

In order to support the growth and development of the Fund and all of Aii’s operations, we apply a management fee of 20% to all philanthropic contributions into the fund and 10% to all treasury contributions into the fund, resulting in a 15% blended management fee.

No. The Fund will not be used for funding events or industry marketing needs beyond that of promoting the Fund as part of the management fee.

Our funding framework is built on the "Roadmap to Net Zero" report Aii co-authored with WRI. Programs and Projects include all tiers of the supply chain from raw materials to yarn preparation to fabric preparation to cut & sew assembly. The report identifies the six intervention areas (or levers) to reduce carbon emissions, such as:

• Material efficiency
• Better, Preferred Materials
• Next Generation Materials
• Energy Efficiency
• Thermal Heat Innovations (dry processing and renewable thermal)
• Clean Energy (renewable electricity)

To identify, fund, and scale proven solutions that lower carbon emissions across the supply chain of the textile, apparel, and footwear sector, with a focus on the primary goal of enabling the reduction of 100M tonnes of GHG emissions by 2030.

Today, we are seeking Lead Partners to the Fund, which means $10 million by 2030. We will accept a pledge for the first three years with the terms and conditions for renewal after the third year.

Lead Partners join the Apparel Impact Roundtable, an industry committee that serves to provide critical and strategic input on the fund and use of funds. Lead Partners help to create, build, and drive the programs to scale, as opposed to only joining the ones that already exist. Lead Partners are at the table from day one to build this system and suite of funding tools to the greatest advantage and need of the fashion sector. This group works closely with our Board of Directors and our Expert Advisory Council, technical experts who provide insights for our work. Lead Partners will also be listed prominently in all communications as founders of the Fashion Climate Fund.

We want you involved. Aii already supports programmatic work for more than 45 brands/ retailers and their suppliers. You can continue to bring your sustainability needs (and budget) for impact programs to Aii, and we can match programs for supplier recruitment.   We may even be able to apply some of the Fund’s grantmaking to support your work, if aligned with our current programs, strategies, and growth.

Yes, the Fund is intended to support companies in reaching their Science Based Targets or other commitments toward climate action. Therefore, companies are able to apply a significant portion of their annual contributions to the Fund directly into CO2 emissions reduction in their own suppliers. As we move more solutions through the pilot phase to scale-ready, that percentage allocation should increase. Aii accepts funding from treasury, philanthropic, and foundation sources from brands. Internal conversations may be required to allow for the appropriate use of funds within the brand’s own supply chain.

The Fund addresses all areas of apparel and footwear. We are already working with several brands/retailers in other product categories (e.g. home products, soft goods, outdoor products). We also apply solutions at an industrial park level, which benefits other manufacturing sectors. 

No, we can apply these funds to work in any region where a meaningful consensus of industry work is happening. Members of the Apparel Impact Roundtable will help to drive the unlock into new geographic regions. 

A minimum of 60% of the funds will be allocated to programming and innovation towards scope 3 (supply chain) CO2 emissions reductions. Another 25% will be applied to “ecosystem leadership,” which we define as continued tool development; contributing to the establishment of industry reporting framework; building relationships with venture capital funds, private equity funds, banks, and loan funds; publishing impact reports; and other activities needed to support the supply chain work. The balance is applied to the Aii management fee. 

The Fashion Climate Fund is a $250M donor-pooled fund with contributions from apparel brands and philanthropy. The Climate Solutions Portfolio (CSP) is Aii’s collection of proven carbon-reducing programs and solutions from pre-seed to pilot to model to scale phase. The CSP Platform is an online registry of those programs; it’s a database of all the solutions across stages of development. Grants will be distributed from the Fashion Climate Fund to select programs in the Climate Solutions Portfolio, and programs in the portfolio will also benefit from connections to other forms of funding and capital (e.g. debt and equity).

The Fund is applied to the entire program portfolio from incubation to commercialization. Once an intervention has proven successful, Aii recruits financial institutions to supply attractive sources of financing for suppliers to make climate-improvement investments. Aii is also advancing new and creative financial solutions for the market and tracking the amount of external capital leveraged as a result of our Fund, as well as the financial ROI and payback period for the supplier that is making the investment.