Gap, H&M, BESTSELLER, Mango: Uniting for Sustainable Fashion

Gap, H&M, Bestseller and Mango are part of a sustainable fashion project
Gap, H&M, BESTSELLER, DBS Bank and Mango are joining forces to launch Future Supplier Initiative, a financial model to decarbonise the fashion sector

Global fashion brands Gap, H&M, BESTSELLER and Mango are putting aside business rivalry to take part in a global project aimed at financing decarbonisation of the sector.

The Future Supplier Initiative, facilitated by The Fashion Pact in partnership with Apparel Impact Institute, Guidehouse, and DBS Bank, launches with a programme in Bangladesh supported by Bestseller, Gap Inc., H&M Group and Mango.

It is actively recruiting more brands, with the intention of expanding to other key apparel manufacturing regions including Vietnam, India, China, Italy and Turkey.

With 99% of total fashion brand emissions occurring in the supply chain (Scope 3), the initiative aims to “accelerate the transition to net zero by sharing the financial risks and responsibilities of transitioning to renewable energy sources in Tier 1 and 2 garment and textile factories”.

Daniel Ervér, CEO of H&M Group

How will it work?

The initiative is a “brand-agnostic mechanism” established to develop and finance projects to support brands and suppliers to meet their Science Based Targets (SBTs) and stay within the 1.5C trajectory.

A press release said: “A combination of technical support and financial incentives will be used to help overcome the barriers that prevent many factories from adopting electrification and renewable energy solutions.”

Daniel Ervér, CEO of H&M Group, said: “At H&M Group, we want to lead the way within our industry and decarbonizing our supply chain is one of the most important keys to further reduce our emissions.

“The Future Supplier Initiative shows that solutions are readily available and come with proven impact, but it requires commitments from brands and investors that are willing to invest.

“We encourage others to join our efforts to tackle our industry’s negative climate impact.”

An H&M press release said: “The cost of inaction on climate change is unaffordable. If the fashion sector is to meet its goals and transform its supply chain, we urgently need to address the gap between ambition and action.”

Eva von Alvensleben, Executive Director and Secretary General of The Fashion Pact

Calling all fashion producers and retailers

One of the keys to the initiative’s success is for more fashion retailers and producers to get on board.

Eva von Alvensleben, Executive Director and Secretary General of The Fashion Pact, said: “The Future Supplier Initiative is a unique opportunity for fashion retailers to join forces and drive progress towards science based targets, and offer much needed financial and technical support to apparel suppliers in their journey to decarbonisation.

“No single business alone can solve this challenge, but by sharing the costs, risks and responsibilities of the transition to renewable energy, we can build an ecosystem of solutions and kickstart a new era of change.”

Anders Holch Povlsen, Owner and CEO of BESTSELLER, said: “We are working intensively to improve our climate footprint. We have largely managed to tackle our direct emissions, but it is clear that emissions in our value chain require ambitious efforts on a scale that calls for innovative, joint solutions.”

He added: “The Future Supplier Initiative represents a new mindset for how fashion companies can come together and accelerate the solutions necessary for the green transition across the industry and specifically in countries specialised in manufacturing.

“We know that as an industry, we still have many steps ahead of us, but we believe that the Future Supplier Initiative can make a positive and significant difference.”

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Overcoming barriers to decarbonisation

There is an understanding within the apparel industry that change is required in order to make strides in reducing emissions – particularly in its supply chain.

However, those behind the Future Suppliers Initiative said that adopting a range of energy efficient technologies and processes, as well as transitioning to renewable energy sources, often comes with lengthy payback periods that can take decades.

They added: “This deters many suppliers from embracing electrification and renewable energy solutions, hindering progress towards decarbonisation goals. 

“To help accelerate progress and bridge these gaps, the Future Supplier Initiative aims to reduce the cost for suppliers by working with fashion brands to decrease the cost of capital for loans that can accelerate decarbonisation.” 

It will also offer technical support to help suppliers identify and implement low carbon technologies and solutions.

Baselining and monitoring emission reductions will also be conducted to demonstrate the impact of projects financed and implemented by the initiative.

Richard Dickson, President and CEO, Gap Inc., said: “Gap Inc. is committed to bridging the climate gap by collaborating with our supply chain partners to reduce emissions.

“And we’re eager to see our commitment matter even more.”

He added: “That’s why we participate in the Future Supplier Initiative, which unites brands, technical partners and financial institutions to drive meaningful climate action across the industry, better and faster than any one company can on its own.”

Tan Su Shan, Group Head of Institutional Banking, DBS Bank

Finance and fashion working together

Tan Su Shan, Group Head of Institutional Banking, DBS Bank, said: “Accelerating net zero for supply chains requires the rapid scaling of low-carbon technologies, innovative financing models and deliberate action by an ecosystem of partners to drive adoption.

“The Future Supplier Initiative brings these elements together to offer practical help by directly funding factory upgrades to help suppliers improve their energy efficiency and reduce their carbon footprints.”

Tan added: “Decarbonising the world’s apparel sector extends beyond geographical boundaries – DBS is honoured to be the first bank and founding partner to this landmark initiative, partnering with global brands to create a more sustainable fashion industry.

“This is how we make a real impact on the real world.”

Toni Ruiz, CEO of Mango

Plenty of support for the initiative

Toni Ruiz, CEO of Mango, said: “Mango sees sustainability as a journey the fashion industry has to make in order to achieve a more just society and to reduce its environmental and social impact.

“In order to reach our climate ambitions, fashion companies inevitably need to decarbonise our supply chains.”

Lewis Perkins, president and CEO, Apparel Impact Institute, said: “To achieve this industry’s ambitious climate goals, it’s imperative that every stakeholder leverages their influence to drive tangible change.

“A joint effort among brands and retailers is essential to create conditions where suppliers are motivated and capable of making these investments.”

Gaurav Menon, Partner at Guidehouse, said: “Supplier decarbonisation must progress more quickly to meet the scientifically based climate targets.

“The Future Supplier Initiative (FSI) aims to bridge the gap between the current way of doing business and the needs of operating in a world constrained by climate change.”

Adam Karlsson, CFO, H&M Group, said the company is “beyond proud” to be a part of the project.

He added: “Producing materials and manufacturing products generates most of our emissions. However, we don’t own our suppliers and we share them with other brands.

“Therefore the best way to reduce emissions in our supply chain is to work with other apparel companies.”

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