Fashion Climate Fund (apparel and footwear decarbonization)

Fashion Climate Fund (apparel and footwear decarbonization) is sponsored by Apparel Impact Institute (with major brands and foundations). Subsidizes suppliers for carbon‑technology assessments, efficiency programs, clean energy solutions in apparel/footwear production facilities.

The Fashion Climate Fund | Apparel Impact Institute 2024 Annual Impact Report Climate Solutions Portfolio Energy and Carbon Benchmark Climate Solutions Portfolio Energy and Carbon Benchmark FUNDING MEASURABLE PROGRAMS We're mobilizing a $250M Fashion Climate Fund to unlock up to $2B in blended capital - accelerating the deployment of proven impact solutions and aiming to reduce up to 100 million tonnes of CO2 from the apparel supply chain by 2030.

What the FASHION CLIMATE FUND Does The Fund strategically allocates capital across four key areas: We're directly empowering suppliers with subsidies to jumpstart carbon technology assessments, efficiency programs such as Clean By Design, and the development of thermal energy roadmaps. These initiatives enable suppliers to lead - not just comply - in the global shift toward net-zero production.

Climate Solutions Portfolio Through a rigorous, data-driven Request for Proposal (RFP) and grantmaking process, we’re expanding our Climate Solutions Portfolio, which identifies and scales proven decarbonization programs, solutions, and technologies targeting Scope 3 emissions, the largest source of Greenhouse Gas Emissions in the apparel sector.

Ecosystem & Thought Leadership We fund and facilitate systems-level change by supporting cutting-edge research and comprehensive reporting, as well as convenings with cross-sector stakeholders. including suppliers, brands, investors, philanthropies, and solutions providers.

All of this work is designed to activate new projects in facilities, thereby unlocking substantial reductions in carbon emissions and fostering the broader adoption of commercially viable climate solutions throughout the supply chain.

Because many textile producers face limited access to affordable capital, the Fashion Climate Fund partners with leading financial institutions to derisk investment, making financing more accessible and attractive. Tools such as first-loss provisions, loan guarantees, and other risk-sharing mechanisms help unlock the commercial financing needed to scale impact.

With $250M in philanthropic and brand treasury funds, the Fashion Climate Fund aims to unlock a total of $2B in blended capital to accelerate positive apparel impact. FCF LEAD PARTNER BENEFITS Create, build, and drive programs to scale Climate Solutions Portfolio The CSP is an online registry of programs and solutions designed to provide visibility and transparency.

Its easy-to-use and frequently updated dashboard connects stakeholders with solutions that align with their science-based targets and deliver verified impact. Propel the industry toward its climate goals Lead Partners will join the Apparel Impact Roundtable, an industry committee that serves to provide critical and strategic input on the Fund.

From day one, you will be at the table with our Board of Directors, Advisory Council, and technical experts to build this system and suite of funding tools to the greatest advantage and need of the fashion sector.

Partner with financial capital to de-risk and scale investment in proven clean energy solutions From rooftop solar to more efficient boilers and insulation, we already have the solutions and experts to make factories more environmentally sound; we just need access to the capital to ensure it happens.

Fashion Climate Fund (FCF) Lead Partners support research and development to reduce the risk faced by businesses that want to adopt clean energy solutions. By ensuring programs are proven and scale-ready, we can connect factories with financial capital that has better investment and lending terms.

Fund the development of digital tools for transparent, standardized impact reporting To reach our goals, we must bring existing datasets together and enhance verification. FCF Lead Partners help the fashion sector by aligning existing data sets, investing in stronger number-crunching tools, and supporting data scientists to translate findings into actionable steps.

Additionally, our FCF Lead Partners advance education and outreach to manufacturer groups, building increased awareness and capacity for adoption. The science is very clear: Immediate and effective actions are crucial . The mission of the Fashion Climate Fund is to drive collective action to tackle fashion supply chain emissions .

Head of Sustainability, H&M Group FREQUENTLY ASKED QUESTIONS How much funding do you have committed so far? 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. Who is managing the Fund?

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. How does Aii ensure that the $250 million Fashion Climate Fund is actually going into carbon reductions in the supply chain? Do you track it?

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.

What is the management fee structure for Aii? 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. Does the Fund provide resources for events sponsorship or marketing efforts?

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. What interventions are included in the Fund? 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: Better, Preferred Materials Next Generation Materials Thermal Heat Innovations (dry processing and renewable thermal) Clean Energy (renewable electricity) What is the purpose of the Fashion Climate Fund?

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. What is the minimum commitment to join the Fashion Climate Fund? 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. What does being a FCF Lead Partner get me? 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. What if I want to participate in the fund, but am unable to make the lead partnership level of giving? 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.

Are brands/retailers required to use their funds in their own supply chain work for lowering carbon emissions? 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.

Is the Fashion Climate Fund only for the fashion industry/suppliers or does it scale solutions for other product manufacturing? 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. Are there geographic limitations to the Fund? 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. How much of the funds will go directly into supply chain work? 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.

What's the difference between the Fashion Climate Fund, the Climate Solutions Portfolio, and the Climate Solutions Portfolio software platform? 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).

How do you plan to “unlock” financial investment and drive a total of $2 billion into the supply chain? 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. Connect with our team to join the Fashion Climate Fund We’re seeking 25 Lead Partners from the industry (brands/retailers) and philanthropy (public and private) to join us.

We identify, fund, and scale proven quality solutions to accelerate positive impact in the industry. Got a question? Get in touch Code Snippet ma-customfonts 3.

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