2023Yearly Report
ANNUAL IMPACT REPORT
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Our Vision, Mission, & Values
Our Vision
A transformed apparel, footwear, and textile industry that has a positive impact on people and the planet.
Our Mission
We identify, fund, and scale proven quality solutions to accelerate positive impact in the industry.
Our Values
Passionate and purpose-driven: We are ambitious about making a positive impact, and we’ll go the extra mile for the cause. We’re grounded, brave, bold, and intellectually curious.
Trustworthy and real: We value working together in a manner that is transparent, authentic, and credible. We can be trusted to do what we say we will do.
Human-centered: We believe humans are the path to delivering data driven solutions and impact. We bridge people to people, people to ideas, and people to tools. We work with mutual respect for each other’s diverse viewpoints and examine our own bias.
Collaborative: We seek to partner and align with existing impact-related work streams rather than reinvent the wheel, and yet we are ready to build new pathways when gaps exist.
Trustworthy and real: We value working together in a manner that is transparent, authentic, and credible. We can be trusted to do what we say we will do.
Human-centered: We believe humans are the path to delivering data driven solutions and impact. We bridge people to people, people to ideas, and people to tools. We work with mutual respect for each other’s diverse viewpoints and examine our own bias.
Collaborative: We seek to partner and align with existing impact-related work streams rather than reinvent the wheel, and yet we are ready to build new pathways when gaps exist.
Our History
The Apparel Impact Institute is a not-for-profit (501c3) registered in the state of California and founded in 2017 by four industry leaders: Cascale, the Sustainable Trade Initiative (IDH), Natural Resource Defense Council (NRDC) and Target Corporation. The organization emerged organically as a result of a real need that apparel brands and retailers self-identified.
Today, Aii is recognized as an ecosystem leader in carbon reduction programming.
Today, Aii is recognized as an ecosystem leader in carbon reduction programming.
2007
Founding of Clean by Design
Clean by Design was created to improve energy and water efficiency in mills by implementing 10 Best Practices.
2017
Founding of Aii
Apparel Impact Institute was established by a group of diverse stakeholders to strategically drive sustainability improvements.
2020
apparel alliance
Aii partnered with the Sustainable Apparel Coalition, Textile Exchange, and ZDHC to form the apparel alliance, a connected, end-to-end path to action for the industry.
2021
Roadmap to Net Zero
Aii and WRI released the "Roadmap To Net Zero" report which identified six interventions delivering over 60% of necessary reductions to reach 2030 goals.
2022
Fashion Climate Fund
Aii launched the innovative $250M Fashion Climate Fund designed to unlock up to $2B in capital to reduce carbon emissions in fashion.
2023
Climate Solutions Portfolio
Aii deployed its first Climate Solutions Portfolio grants funded by the Fashion Climate Fund. Aii also debuted the CSP platform, a registry of proven climate solutions.
2030
Looking forward
By 2030, Aii aspires to enable the reduction of 100 million tonnes of CO2e from the apparel and footwear supply chain.
2050
Looking forward
We envision the industry reaching net-zero, driven by Aii’s support.
Aii’s Theory of Change
Apparel Impact Institute was founded in 2017 to accelerate positive impact in the apparel, footwear, and textile industry to transform the impact that the sector has on people and the planet.
The basis of our theory of change is the “Roadmap to Net Zero: Delivering Science-Based Targets in the Apparel Sector” report published by World Resources Institute and Aii in 2021, which identifies six solutions the fashion industry can adopt to deliver the GHG reductions needed by 2030 to stay within the 1.5°C pathway.
These solutions enable a net-zero industry to be achieved by 2050, with a combined GHG emissions reduction potential of 2.5 Gt CO₂e, of which 1.2 Gt (47% of combined solution categories) will be contributed by solutions already existing today, 1.0 Gt (39%) by innovative solutions, and 0.3 Gt (14%) by other solutions including materials efficiency and reducing overproduction.
Our research indicates that it will cost $1 Trillion for the apparel industry to fully decarbonize its supply chain by 2030. Much of this investment has a positive financial ROI and can be funded by financial institutions.¹⁴
Therefore, Aii applies a blended capital approach, utilizing funds from apparel brand and philanthropic foundations to catalyze investment from debt and equity providers, thereby achieving greater impact and scale.
The basis of our theory of change is the “Roadmap to Net Zero: Delivering Science-Based Targets in the Apparel Sector” report published by World Resources Institute and Aii in 2021, which identifies six solutions the fashion industry can adopt to deliver the GHG reductions needed by 2030 to stay within the 1.5°C pathway.
These solutions enable a net-zero industry to be achieved by 2050, with a combined GHG emissions reduction potential of 2.5 Gt CO₂e, of which 1.2 Gt (47% of combined solution categories) will be contributed by solutions already existing today, 1.0 Gt (39%) by innovative solutions, and 0.3 Gt (14%) by other solutions including materials efficiency and reducing overproduction.
Our research indicates that it will cost $1 Trillion for the apparel industry to fully decarbonize its supply chain by 2030. Much of this investment has a positive financial ROI and can be funded by financial institutions.¹⁴
Therefore, Aii applies a blended capital approach, utilizing funds from apparel brand and philanthropic foundations to catalyze investment from debt and equity providers, thereby achieving greater impact and scale.
Pathway to Net-Zero: Reduction Potential by 2050
Solution categories that enable a net-zero fashion industry by 2050. Source: Aii and FFG analysis (2021).
Additionally, Aii’s Climate Action Approach portfolio and Climate Solutions Portfolio are establishing a deliberate, scientific approach to selecting the most cost-effective and scalable solutions to reduce carbon in apparel supply chains.
All Aii programs are aligned with science-based targets to reduce apparel sector carbon emissions by 50% by 2030 and to net zero by 2050.
All Aii programs are aligned with science-based targets to reduce apparel sector carbon emissions by 50% by 2030 and to net zero by 2050.
Our Focus Areas
Our immediate priority is carbon reduction to work toward a zero-carbon fashion industry. The following secondary impact areas result from this work.
To achieve sufficient carbon reductions for a 1.5C pathway, Aii and WRI concluded in the report Roadmap to Net Zero that the following six interventions are needed to be implemented by the apparel sector.¹⁵
- 1. Maximizing material efficiency.
- 2. Scaling sustainable materials and practices.
- 3. Accelerating the development of innovative materials.
- 4. Maximizing energy efficiency.
- 5. Eliminating coal in manufacturing.
- 6. Shifting to 100 percent renewable electricity.
Beyond the six interventions, the paper also identified the potential benefits of circular business models and practices. All seven areas are critical to decarbonizing the supply chain.
Based on these findings, Aii has identified focus areas that form the fundamentals for our Climate Solutions Portfolio, and our own Climate Action Approach programming.
We are looking to:
We are looking to:
- Reduce process demand for energy & reduce energy losses
- Reduce/eliminate GHG emitted from generating heat and electricity
- Reduce emissions from production of natural & synthetic fibers
- Minimize waste in each step of production
- Maximize circular reuse of fibers, fabrics or chemicals
As shown in the below figure, material production is the biggest hotspot of emissions (52% of total) followed by raw material extraction (24% of total). Therefore, Aii’s programs currently focus mainly on material production.
Tier 4
Raw material extraction
0%
of GHG Emissions
Tier 3
RAW MATERIAL PROCESSING
0%
of GHG Emissions
Tier 2
MATERIAL PRODUCTION
0%
of GHG Emissions
Tier 1
FINISHED PRODUCT ASSEMBLY
0%
of GHG Emissions
How We Work
1. We Identify
We use verified data to identify programs and solutions that are poised to have a significant impact on industry carbon emissions.
2. We fund
We aggregate existing resources and attract new ones to build
a pipeline of scalable impact in the industry.
a pipeline of scalable impact in the industry.
3. We scale
We remove barriers to accelerate the implementation of proven solutions.
4. We measure
We ingest, analyze, and report critical data to move our partners closer to their climate targets.
Aii provides access to, implementation, and tracking of programs that result in positive environmental impacts in the production of apparel and footwear products.
We’re transforming the apparel and footwear industry by identifying, funding, scaling, and measuring proven solutions and programs that decrease carbon emissions.
We’re transforming the apparel and footwear industry by identifying, funding, scaling, and measuring proven solutions and programs that decrease carbon emissions.
Aii’s Daily Work Spans The Following Five Areas:
Aii Team
Organogram¹⁶
16 Employees and job titles during the financial year 2023 until 12.31.2023:
Download the OrganogramGeography & Demographics of the Team
Aii is thrilled to have grown from 15 employees to 26 in 2023.
In 2023, Aii’s team represented almost an equal distribution of male and female employees. Aii’s executive team is composed of four people — 75% identifying as male and 25% as female. We are especially proud to be an international and diverse team from nine different nationalities.
We are based in nine countries over three continents.
In 2023, Aii’s team represented almost an equal distribution of male and female employees. Aii’s executive team is composed of four people — 75% identifying as male and 25% as female. We are especially proud to be an international and diverse team from nine different nationalities.
We are based in nine countries over three continents.
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Click and Drag!
Graphic shows gender and nationalities of the Aii team.
Team Initiatives
Employee Guidebook — Created and released our employee guidebook, offering employees around the globe unified guidance surrounding values, working norms, and expectations for working at Aii.
Employee Engagement Survey — Produced and deployed our first annual employee engagement survey to set a baseline for future benchmarking of our organizational health as it relates to our employees. The survey consisted of 26 questions surrounding employee engagement and satisfaction on a 1-5 scale rating with 5 being positive.
Our overall engagement score from our employees was an impressive 4.2 out of 5. We have committed to ongoing improvement initiatives in the lower-scoring areas:
- Work/Life Balance: Developed a communication guide to support and encourage work/life balance and the ability to disconnect while not working.
- Operations: Formed a culture committee composed of a cross- functional team of employees to support a better understanding of Aii’s informal structures and processes.
- Connection: Established new team-building initiatives and opportunities for connection in both our monthly staff meetings and asynchronously in internal communication channels to feel more connected globally.
“The engagement survey was monumental in focusing our efforts
to build a top-notch culture for our employees. It provided a much- needed baseline to measure employee engagement year-over-year and the opportunity to focus team initiatives catered to the specific needs of our employees.”
to build a top-notch culture for our employees. It provided a much- needed baseline to measure employee engagement year-over-year and the opportunity to focus team initiatives catered to the specific needs of our employees.”
- MICHELLE WILLIS
Aii’s HR director
Aii’s HR director
Compensation Philosophy & Strategy — Established and internally shared a transparent policy framework that enables systematic decisions around employee compensation.
Compensation Benchmarking & Analysis — Conducted a detailed compensation review to ensure fair pay internally and to remain competitive and aligned with the outside labor market. Using data from reputable compensation benchmarking tools, as well as an industry-specific benchmarking project with other NGOs in our ecosystem, we have formed global salary bands to go hand in hand with our Compensation Philosophy & Strategy. Employees who were at a compensation level below our research were adjusted to be within our newly established bands.
Compensation Benchmarking & Analysis — Conducted a detailed compensation review to ensure fair pay internally and to remain competitive and aligned with the outside labor market. Using data from reputable compensation benchmarking tools, as well as an industry-specific benchmarking project with other NGOs in our ecosystem, we have formed global salary bands to go hand in hand with our Compensation Philosophy & Strategy. Employees who were at a compensation level below our research were adjusted to be within our newly established bands.
“This initiative holds immense significance for me given my role in overseeing a team across Europe and Asia. I take great pride in the collective growth of each team member, as they have all experienced substantial individual development. The compensation benchmark has been instrumental in acknowledging the contributions of team members to Aii’s vision and mission in a comprehensive, fair, and equitable manner. This recognition is crucial in cultivating a global culture that values and respects local contexts.”
- TAMARA WULF
Aii’s vice president of programs
Aii’s vice president of programs
Internal Staff Newsletter — Initiated a monthly staff newsletter that celebrates birthdays, anniversaries, internal victories, and allows a place for our employees to get to know each other on a deeper level.
Staff Retreat — Gathered in Atlanta, GA, to build in-person bonds. Together we reaffirmed who we are as an organization, where we are going, and what we hope to accomplish in the short- and long-term. We learned collaboration, communication, and problem-solving skills while recommitting to our vision, mission, goals, and objectives.
Staff Retreat — Gathered in Atlanta, GA, to build in-person bonds. Together we reaffirmed who we are as an organization, where we are going, and what we hope to accomplish in the short- and long-term. We learned collaboration, communication, and problem-solving skills while recommitting to our vision, mission, goals, and objectives.
“Attending the Atlanta retreat was an immensely enriching experience for me. It was a time of recharging both personally and professionally, surrounded by a team of individuals who quickly became more than just colleagues. The retreat seamlessly blended enjoyable team building activities and high-level strategic discussions, creating an environment where bonds were forged and cultural differences dissolved. Overall, the Atlanta retreat was more than just a getaway; it was a transformative experience that left a lasting impression on me. Thanks to the Aii family for a memorable retreat.”
- LAXMIKANT JAWALE
Aii’s regional lead (SA & SEA)
Aii’s regional lead (SA & SEA)
Holiday Gift — Planted 10 trees in each of our employees’ names in countries most relevant. You can follow the report of the 260 trees planted here: Company Report - EcoMatcher
Aii Governance
Board of directors
Aii is governed by its Board of Directors, whose role includes:
- Determining Aii’s mission and purpose.
- Monitoring and strengthening programs and services.
- Ensuring adequate financial resources.
- Protecting assets and providing proper financial oversight.
- Building a competent Board, including articulating prerequisites for candidates, orienting new members, and periodically and comprehensively evaluating their own performance.
- Maintaining legal and ethical integrity.
- Enhancing the organization’s public standing.
- Establishing a balance of representation from a variety of fields on the Board to maintain diversity and encourage inspiration and innovation from a wide range of sources.
- Approving the final Fashion Climate Fund allocations as part of the budgeting process.
Aii board members serve a three-year term and attend quarterly Meetings. The Board has three established committees: Board Development, Audit, and Finance.
CSP Advisory Council
The Climate Solutions Portfolio Advisory Council (CSPAC) operates as a diverse multi- stakeholder entity with a primary focus on identifying solutions capable of significantly reducing CO₂e at scale within the textile industry. The ultimate aim is to include these impactful solutions in the Climate Solutions Portfolio (CSP).
Apparel Impact Roundtable
The Apparel Impact Roundtable (AIR) is a strategic advisory body consisting of brands and retailers, responsible for driving the strategic scale and implementation of sponsored initiatives.
The Apparel Impact Roundtable is composed of the industry partners contributing to the Fashion Climate Fund along with additional strategic industry partners. Their primary responsibility is to review and provide feedback on the recommended docket of the fund.
The Apparel Impact Roundtable is composed of the industry partners contributing to the Fashion Climate Fund along with additional strategic industry partners. Their primary responsibility is to review and provide feedback on the recommended docket of the fund.
Stakeholders in 2023
2023 Partners
Apparel, footwear, or retail companies who nominate, sponsor, or provide funding to Aii to drive facility-level environmental improvement programs and impact reductions.¹⁷
Abercrombie & Fitch, Amazon, Amer Sports, American Eagle, Arc’teryx, ASICS, ASOS, Burberry, C&A, Columbia, Decathlon, Eileen Fisher, European Outdoor Group, Farfetch, FILA, Fjällräven, Gap, HellyHansen, Icebug, JCPenney, J. Crew, Kering, Levi Strauss, LL Bean, Marks & Spencer, Nemo, New Balance, Nike, Nordstrom, Otto Group, Outdoor Industry Association, Prada Group, Primark, Puma, PVH, Ralph Lauren, Rapha, REI, REWE, SHEIN, Stella McCartney, Tchibo, The Reformation, Under Armour, VF Corporation, Victoria’s Secret, W.L. Gore
Non-profit organizations with expertise and knowledge of the apparel, footwear, and textile industry or adjacent sectors collaborating with and providing guidance and insights to Aii.
Cascale
Fashion for Good
Solidaridad
Textile Exchange
ZDHC Foundation
Fashion for Good
Solidaridad
Textile Exchange
ZDHC Foundation
Organizations committing at least $10M to the $250M Fashion Climate Fund.
H&M Foundation
H&M Group
HSBC
Lululemon
PVH Foundation
The Schmidt Family Foundation
Target Corporation
H&M Group
HSBC
Lululemon
PVH Foundation
The Schmidt Family Foundation
Target Corporation
Organizations who provided funding to Aii in 2023 to advance our mission for the apparel, footwear, and textile sector.¹⁸
Bank Of The West
Cascale
Chaiken Foundation
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
Fair Wear Foundation IDH
Roy A. Hunt Foundation
Cascale
Chaiken Foundation
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
Fair Wear Foundation IDH
Roy A. Hunt Foundation
Organizations with expertise and knowledge on issues relevant to the apparel, footwear, and textile sector that collaborate with and provide guidance to Aii.
Accelerate Circularity
Fashion Conveners
Fashion Pact
Global Fashion Agenda
Natural Resources Defense Council (NRDC)
Pakistan Environment Trust
Race to the Top
The Industry We Want (TIWW)
United Nations Fashion Industry Charter for Climate Action (UNFCCC)
Value Change Initiative
World Resources Institute (WRI)
World Wildlife Fund (WWF)
Fashion Conveners
Fashion Pact
Global Fashion Agenda
Natural Resources Defense Council (NRDC)
Pakistan Environment Trust
Race to the Top
The Industry We Want (TIWW)
United Nations Fashion Industry Charter for Climate Action (UNFCCC)
Value Change Initiative
World Resources Institute (WRI)
World Wildlife Fund (WWF)
Solution providers with specialist knowledge in countries that implement Aii’s programs.
Albini Energia
Italy
Beijing Jingneng Power
China
BluWin Ltd.
India, Bangladesh, China, Mexico, Honduras, El Salvador, USA
Cascade Energy
United States
Ckinetics
India
Italy
Beijing Jingneng Power
China
BluWin Ltd.
India, Bangladesh, China, Mexico, Honduras, El Salvador, USA
Cascade Energy
United States
Ckinetics
India
Catoer Wibowo
Indonesia
Energica SRL
Italy
Enerteam
Vietnam
Hongyu
(Guangzhou Hongyu Ecological Technology) China
International Energy Management Association (IEM)
China
Indonesia
Energica SRL
Italy
Enerteam
Vietnam
Hongyu
(Guangzhou Hongyu Ecological Technology) China
International Energy Management Association (IEM)
China
Legambiente
Italy
Pozzi Leopoldo
Italy
Reset Carbon
Multiple locations
VNCPC
Vietnam
Yujin Energy Technology Co.,Ltd. South Korea
Italy
Pozzi Leopoldo
Italy
Reset Carbon
Multiple locations
VNCPC
Vietnam
Yujin Energy Technology Co.,Ltd. South Korea
Organizations who contributed finance and blended capital expertise to Aii in 2023 to further our Sustainable Finance Strategy objective of unlocking $2 billion in decarbonization/climate funding for the apparel and footwear industry.
BNPP
Standard Chartered
HSBC
Rockefeller Foundation
IFC
Workshop DFI
Guidehouse
BluWin
Standard Chartered
HSBC
Rockefeller Foundation
IFC
Workshop DFI
Guidehouse
BluWin
17 Partners include organizations that previously contributed and/or currently contribute funding to Aii
18 Industry & Funding Partners include organizations that previously contributed and/or currently contribute funding to Aii.
18 Industry & Funding Partners include organizations that previously contributed and/or currently contribute funding to Aii.
2023 Producers Implementing Aii Programs
