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Apparel Impact Institute is Making Mill Improvements a Team Effort

The Apparel Impact Institute (Aii) is rolling up its sleeves for its inaugural effort: scaling up mill improvements across the textile supply chain.

The California-based consortium of brands, manufacturers and industry associations, which spun off from the Sustainable Apparel Coalition (SAC) in October 2017, is taking the reins of the National Resources Defense Council’s Clean by Design program so it can tackle what it calls “one of the most environmentally impactful” segments of clothing production.

The claim has plenty of data to back it up: A 2018 Quantis report about the fashion industry’s environmental impact, for instance, found that roughly 38 percent of a supply chain’s carbon-dioxide impact occurs during the wet-processing stage.

“It doesn’t mean that Aii will solely focus and only work on wet processing,” Lewis Perkins, the institute’s president, said during a webinar Thursday. “But it does give us a good indication that this is where we should start…because it does have such a direct impact on the points that we aim to change with CO₂, energy use and water, as well as toxic discharge.”

Backed financially and strategically by the SAC, HSBC and the IDH Sustainable Trade Initiative, the program has enlisted “key first partners” such as Arvind Ltd., Gap Inc., Target and PVH Corp. Perkins expects the number of stakeholders to grow over the next 12 to 18 months “as we build out this program with greater industry support.”

While Aii welcomes small-to-medium enterprises, it aims to establish a “strong organization of key partners who can help us address issues that will also be aligned toward high volume and thereby solve for high impact,” Perkins said.

Through the Mill Improvement Alliance, Aii seeks to address 225 mills in 2019 and 2,000 over the next five years. A “spring cohort” comprising facilities in China, India and Vietnam, the institute will be “layered on” with factories in Bangladesh, Pakistan, Turkey and Taiwan in the fall.

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Presenting a collective face to mills worldwide enhances brands’ bargaining power, which, in turn, paves a “much stronger pathway forward,” Perkins said. The alliance will take a similarly consolidated approach to mill-improvement techniques, standardizing diverse techniques and metrics so brands can move “more quickly and with greater efficiency” to incorporate best-in-class practices that produce quantifiable results year over year. “We really view this as a multi-stakeholder engagement that will continue to build,” he added. “As brands join us, our data will begin to shift…and this pathway or direction may evolve over time.”

Perkins compares Aii’s process to an RFP, or request for proposal, “where we can decide what the best criteria is, and we can invite and encourage different programs and partners to participate.” Because the supply chain is a shared one, it only makes sense to aggregate resources and expertise.

Though each of Aii’s programs will be funded differently, the Mill Improvement Alliance will adopt what Perkins described as a “one-third, one-third, one-third” shared funding model. Brands and mills will each put up a third of the cost of the program, and the remaining third will be raised through public funding via HSBC, IDH and others.

The cost of the mill improvement program, Aii estimates, averages $12,500 per facility. The actual cost of the improvements ranges from $200,000 to $300,000, with a return on investment that is two to four times that amount.

“If a brand or retailer or even a manufacturer were to go at one of these programs alone, they would either be splitting the cost or potentially picking up the entire cost,” he added. “In the case of our model, we’re looking at sharing it across the three directions, [and] we can also drive the cost per brand per mill down by encouraging more participation.”