Sustainable finance
Overcoming the industry’s financial barriers
Our sustainable finance strategy
Aii is committed to unlocking $2B by 2030 towards the $1T total that the industry needs
We’ve built a coalition of brands, financial institutions, and manufacturers to collectively fund the decarbonization of the supply chain through a mix of capital sources. This effort includes our $250M Fashion Climate Fund, which provides catalytic capital in the form of grants and subsidies for early- to mid-stage projects. In parallel, we are advancing a broader strategy to unlock blended capital, which provides suppliers with the attractive finance packages needed to make climate-improvement investments commercially viable.
IT WILL TAKE $1 TRILLION IN INVESTMENT FOR THE APPAREL AND FOOTWEAR INDUSTRY To DECARBONIZE
Financing is one of the biggest barriers to progress. Traditional funding structures aren’t working fast enough or equitably enough for suppliers. If we’re going to meet our 2030 targets, we can’t rely on business as usual. We need innovative models that align the industry, philanthropy, and financial institutions to catalyze innovation and scale..
EXAMPLE APPLICATION OF FINANCIAL ASSISTANCE
Access to finance remains a major challenge for suppliers looking to invest in reaching net zero. Aii deploys grants to solutions with a data-backed path to significant carbon reductions, intended to help them reach scale quickly and attract commercial funding.. We know that billions in capital expenditures will be required to upgrade manufacturing facilities, and many suppliers struggle to access affordable financing. That is why we are building a portfolio of financial tools and working to connect suppliers with the financing options that fit their needs.
Example application of financial assistance
Breaking down the $1 Trillion
Reaching net zero will require a variety of stakeholders and solutions. We believe that not all solutions are created equal, and we’re committed to scaling those with the greatest potential impact on carbon emissions. Our portfolio delivers a more favorable cost-per-tonne of carbon reduction than many other solutions on the market.
Funder distribution
Program cost
Types of funders that contribute to the $1 Trillion investment
Bank debt, bonds, and loan funds (Debt investment)
Venture capital and private equity (equity investment)
Government, development banks and philanthrophy (debt, equity and grants)
Brands and manufacturers (debt, equity and grants)
Sustainability premiums
Types of Funders. Source: Aii and FFG analysis (2021)
Program cost per tonne of reduction of CO2e over useful life
*cc&s = Carbon Capture and Storage
Source: Kenneth Gillingham and James H. Stock. “The cost of Reducing Greenhouse Gas Emissions.”
Journal of Economic perspectives 32, no. 4 (Fall 2018) 53-72.
Journal of Economic perspectives 32, no. 4 (Fall 2018) 53-72.
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HELP US CREATE SYSTEMIC CHANGE IN THE INDUSTRY
Contact us to learn more about our strategy and how you can get involved, or learn how we’re raising and deploying grants through the Fashion Climate Fund.
