PRESS RELEASE: Aii Announces Lead Funders for New $250M Fashion Climate Fund, Uniting Brands, Philanthropic Donors, and Industry Stakeholders
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(June 8, 2022) Apparel Impact Institute Announces Lead Funders for New $250M Fashion Climate Fund, Uniting Brands, Philanthropic Donors, and Industry Stakeholders
- Lead funders include Lululemon, H&M Group, H&M Foundation, and The Schmidt Family Foundation.
- The $250M Fund will be used to identify, fund, scale, and measure verified impact solutions to decarbonize and modernize fashion industry supply chains.
- Pioneering a collaborative funding model between philanthropy and corporate entities, the Fund is designed to unlock an estimated $2B in blended capital in additional asset classes, including debt and equity, to help meet the industry’s ambition to halve carbon emissions by 2030.
San Francisco, June 8, 2022
Apparel Impact Institute (Aii), the nonprofit organization dedicated to operationalizing and accelerating climate action and sustainability solutions in fashion, announced today the lead funders in its new $250M Fashion Climate Fund: Lululemon, H&M Group, H&M Foundation, and The Schmidt Family Foundation.
Aii and its lead partners have established the Fashion Climate Fund to drive collective action to tackle fashion’s supply chain emissions. By leveraging a first-of-its-kind collaborative funding model for fashion between philanthropy and corporate entities, the Fund could unlock an estimated $2B in blended capital across various asset classes, including debt and equity, to help meet the industry’s goal to halve carbon emissions by 2030.
While hundreds of fashion brands and retailers have pledged support to the Science Based Target Initiative (SBTi) to reduce their supply chain greenhouse gas emissions, large barriers to action remain: According to Aii and World Resources Institute’s recent report, Roadmap to Net Zero: Delivering Science Based Targets in the Apparel Sector, 96 percent of the fashion industry’s emissions come from third-party farms and factories that are shared across the industry and deemed too risky for brands, retailers, or traditional sources of capital to make necessary upgrades and overhauls.
Following the report’s roadmap, and the financial modeling insights set in Aii and Fashion For Good’s report, Unlocking the Trillion-dollar Fashion Decarbonization Opportunity, the Fashion Climate Fund will provide programmatic funding for supplier interventions across the value chain: transitioning to renewable electricity, accelerating next-generation materials, scaling sustainable materials and practices, eliminating coal in manufacturing, and improving energy efficiency. Aii has created strategic collaborations with Textile Exchange, Fashion for Good, and Solidaridad, among others, to address those focal areas.
Through Aii’s unique model, philanthropic funds will provide the necessary form of capital to accelerate and de-risk pre-seed and pilot innovations, and industry support will advance proven solutions from pilots to scaled impact. This would unlock the estimated $2B in blended capital over the next eight years.
The Fashion Climate Fund is a bolder, more urgent, and holistic evolution of Aii’s existing program, Clean by Design. Since 2018, Clean by Design has aggregated and deployed over $12M in philanthropic funding into energy efficiency programs for factories, which has unlocked $175M in financial capital in addition to environmental savings.
To best support management of solutions and apply use of funds, Aii will launch a Climate Solutions Portfolio to serve as an online registry of early, mid- and late-stage initiatives that tackle supply chain greenhouse gas emissions. Fund partners and strategic advisors will use the portfolio as a tool for industry alignment and decisions on programs and grants. Major stakeholders for this tool, which will go into Beta development in 2022, include brands, retailers, suppliers, solution providers, innovators, foundations, government grantmakers, private equity and banks.
Lewis Perkins, President of Aii, said: “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. We are greatly encouraged by the leadership and decisiveness shown today from these lead partners and honored to play this role as we open up this first phase of the project finance.”
Aii is currently in discussion with additional lead partners, with the goal of each funder committing $10M over eight years. This is the first step of a larger industry and capital markets commitment to reaching science-based targets. Aii will continue to convene more lead partners into this Fund and grow strategic relationships with investment capital, both commercial lending and private equity, to reach even greater scale.
For more details, including quotes from lead funders and strategic collaborators, please see the media kit.
Contact: Lauren Daum email@example.com
Apparel Impact Institute (Aii) is a nonprofit collective founded in 2017 by NGO leaders: the Sustainable Apparel Coalition (SAC), the Sustainable Trade Initiative (IDH) and Natural Resource Defense Council (NRDC), alongside industry leaders Target Corporation, Gap Inc., PVH and HSBC. The organization emerged organically as a result of a real need that apparel brands and retailers self-identified.
Aii identifies, funds, and scales proven quality solutions to accelerate positive impact in the apparel and footwear industry. Aii programs focus on areas that result in positive environmental impact from the production of apparel and footwear products to improve the industry. To learn more about Aii, visit apparelimpact.org.