ArticleOp-ed by Lewis Perkins published in Sourcing Journal
The clock is ticking for the fashion industry.
As one of the largest contributors to global carbon emissions, and with 2030 climate goals just around the corner, plans for decarbonization can no longer just sit in a drawer. It’s time to get moving.
Across the industry, progress has been made. More than 50 percent of major brands have committed to science-based targets and energy-efficiency initiatives, which will reduce emissions by 10 to 20 percent in some supplier facilities. Yet, the often-overlooked Scope 3 emissions, which span the entire value chain—including manufacturing, transportation, and supplier operations—can account for up to 99 percent of a brand’s carbon footprint. The fashion industry cannot even dream of meeting net zero without tackling those emissions.
To achieve net zero, we need a fundamental shift in how our industry does business and approaches partnerships. The age of implementation demands more than fleeting fixes—it calls for long-term, strategic collaborations that address systemic barriers and accelerate progress across the value chain. To reach net zero, the industry must prioritize shared responsibility, mutual investment, and partnerships that are built to last.
Despite this need, much of the sector still relies on short-term, low-risk collaborations focused on quick fixes—transactional partnerships. For instance, a brand might fund an energy efficiency upgrade in a supplier’s factory but withdraw support once the project is completed, leaving broader challenges like infrastructure improvements or renewable energy adoption unresolved. These transactional relationships often leave suppliers vulnerable, emissions’ root causes unaddressed, and brands with sticky Scope 3 emissions.
Today’s brands must establish longer-term relationships with suppliers—instead of bouncing from supplier to supplier to save pennies—to support decarbonization efforts in any significant way. Investing in long-term collaborations provides more than climate benefits; it delivers tangible advantages for brands: getting ahead of regulation, creating goodwill, and generating financial gains. By committing to invest in—and transform—supplier operations, brands can strengthen sustainability and resilience across the supply chain. These strategic partnerships go beyond tackling low-hanging fruit for suppliers as brands and suppliers work together to adjust supply chains and challenge the status quo.
In the near term, brands must find ways to de-risk and share the costs of carbon reduction initiatives—having some “skin in the game” alongside suppliers—and moving beyond education and technical assistance. One way to do so is through collaborative financing models, with brands sharing risks with suppliers.
Approaches like the Future Supplier Initiative, which collaborates with brands to reduce the cost of capital for loans that can accelerate decarbonization, or H&M Group’s Green Fashion Initiative (GFI) illustrate how joint responsibility can drive meaningful change. For instance, the GFI, which funds supplier projects to phase out fossil fuels and cut emissions, reduces approximately 50 kilotonnes of CO2 within H&M’s supply chain each year. In Pakistan, the fund has enabled a denim manufacturer to replace a coal boiler, reducing 14,000 metric tonnes of CO2 annually. The Supply Chain Finance program by PVH, owner of brands including Calvin Klein and Tommy Hilfiger, also delivers funding to producers to invest in infrastructure and sustainable material transitions, and there are many other examples.These programs illustrate the importance of financial creativity in developing long-term, strategic collaborations that tackle emissions and address systemic barriers.
There are myriad ways to approach sharing these financial opportunities and risks. For instance, The Brand Playbook for Financing Decarbonization by the Apparel Impact Institute sets out twelve different financial approaches brands can take to support their producers’ decarbonization efforts. From producer incentives to project assistance, debt mechanisms to equity investments, financial contributions and shared risks—true partnerships—can encourage producer decarbonization.
Ultimately, these collaborations enable brands to co-develop sustainable solutions, positioning them as leaders in a rapidly evolving market where consumers and investors demand accountability. In the long run, strategic partnerships future-proof operations while building stronger reputations and deeper loyalty with stakeholders.
The path to net zero is not going to come easily—it’s one of the most demanding challenges of our lifetime. But it’s one that must be achieved. Through initiatives like the Fashion Climate Fund and Future Supplier Initiative, Aii will continue to mobilize brands to adopt long-term strategies that tackle funding gaps and technical roadblocks head-on. Working together, brands, suppliers, and organizations like Aii can help create the conditions necessary to facilitate a reduction of 100 million tonnes of carbon emissions across the apparel industry in the next five years.
Lewis Perkins is the president of Apparel Impact Institute (Aii), the nonprofit dedicated to identifying, funding, scaling, and measuring the apparel and footwear industry’s proven environmental impact solutions. Perkins is dedicated to building programs and systems designed to activate brands, manufacturers, financiers, and innovators to do their part to decarbonize the industry.
