A $250 million war chest to identify, fund and scale verified solutions to decarbonize the fashion supply chain just got a new backer.
PVH Corp. will join Lululemon, H&M Group, H&M Foundation and The Schmidt Family Foundation as a lead donor of the “catalytic” Fashion Climate Fund at the $10 million buy-in level, the Apparel Impact Institute (Aii) revealed Thursday.
“Our company purpose, to power brands that drive fashion forward for good, is at the core of our multiyear growth plan and has guided us for many years,” Stefan Larsson, CEO of the Calvin Klein and Tommy Hilfiger owner, said in a statement. “We know that collaboration and funding are critical to driving solutions that address the fashion industry’s contributions to climate change and are proud to be supporting the Fashion Climate Fund in this work.”
Formally unveiled at the Global Fashion Summit in Copenhagen in June, the Fashion Climate Fund is “strategically designed” to leverage industry, treasury and philanthropic funds to implement “foundational” supply chain improvements, including transitioning to renewable energy, promoting next-generation materials, eliminating coal in manufacturing and boosting energy efficiency.
By doing so, the climate coffer will also de-risk investment opportunities, allowing the industry to unlock an estimated $2 billion in blended capital, including debt and equity, to meet its goal of halving carbon emissions by 2030.
For Aii president Lewis Perkins, PVH Corp’s participation is particularly significant. Together with Gap Inc. and Target, the company helped establish Aii with the Sustainable Apparel Coalition.
“To me, that’s a testament of their faith in our work,” he told Sourcing Journal. “It’s a big jump in the resources they’ll be committing and it’s a really big step forward for them in terms of tackling decarbonization in their supply chain.”
Aii said it has made progress in developing the Climate Solutions Portfolio, an online registry of early, mid- and late-stage initiatives and best practices that can drive emissions reductions in the fashion supply chain. It’s also finalizing the fund’s blended capital approach, building a system for onsite carbon data collection and developing a “use of funds” strategy for 2023.
“We’re sort of referring to this as Year Zero, in a sense, because we’re really establishing the framework for the use of funds, how we establish criteria, the process for decision making on which solutions or projects will get funded—how that process will happen,” he said. “We want to ensure that we have a rigorous, data-driven, science-based approach.” Linda Greer, founder of the Natural Resources Defense Council’s Clean by Design supply chain energy-efficiency program, which now runs under the Aii umbrella, is a consultant.
Meanwhile, Aii will continue to funnel funds into supplier carbon target-setting and prioritization projects, Clean By Design efficiency programs and renewable energy pilots. Funding is still coming in through its usual channels, Perkins said. Just because a company can’t drop $10 million on a lead partnership doesn’t mean it can’t work on reducing its carbon, water and chemical use through Aii’s existing initiatives. It will take everyone to pitch in.
“That’s one of the key messages I want for the industry to know,” he said. “We’ve had people call us and say, ‘Hey, I can’t make that level of contribution but I want to increase what I’m doing or I want to get started, but I have a budget. Can we get started?’ We’re like, ‘100 percent.’ That’s where we’ve been working all along.”