Four giants of the fashion industry are coming together to boost sustainability in their supply chains. The Swedish H&M, the American Gap, the Danish Bestseller and the Spanish Mango have signed an alliance, under the protection of the Fashion Pactto provide bank guarantees to its common suppliers in Bangladesh to finance energy efficiency projects.
The project, called Future Supplier Initiative (FSI) and promoted by Paul Polman (co-president of the Fashion Pact), aims to develop and finance projects that allow factories and, indirectly, the brands that manufacture in them, to reduce their emissions through energy efficiency. For brands to achieve their emissions goals set for 2030, it will be necessary to reduce their suppliers’ emissions by half.
Future Supplier Initiative, which was born with four brands but hopes to add more in the future, will spend the next two years identifying matching suppliers and implementing projects. The projects will be paid for by the suppliers themselves, although they will have access to credit on advantageous conditions through the guarantee provided by the brands to the Asian bank DBS.
The project, under the protection of the Fashion Pact, will also be implemented in Vietnam and then in India, China, Italy and Turkey
The reduction of emissions at suppliers will be structured into three types of projects: financial solutions to support renewable energy projects in factories with a low financing cost; identification and implementation of low-emission technologies and solutions, and introduction of methodology to measure and obtain carbon offsets.
According to project sources, The forecasts involve selecting the suppliers, factories and projects that will support the four brands during 2024.. Between 2025 and 2026 the projects will be executed. The four brands have not committed, at least publicly, an amountsince it will depend on the projects that are promoted.
Future Fashion Supplier begins its activity in Bangladesh, but there are already talks underway to implement the same project in Vietnam. India, China, Italy and Türkiye are the next markets in which the initiative will be developed.
H&M and Bestseller had already worked on similar projects in the past. The Swedish group, for example, launched a green loan program at the end of last year for the decarbonization of the supply chain also with DBS. In addition, with the help of Bestseller, it committed an investment of one hundred million dollars for the construction of an offshore wind farm in Bangladesh to supply renewable energy to the country.
