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Unlocking the Trillion-Dollar Fashion Decarbonisation Opportunity

The fashion industry is at a pivotal moment in its journey toward sustainability. With greenhouse gas emissions contributing significantly to global climate change, urgent action is needed to decarbonise supply chains. This report, developed by Fashion for Good in collaboration with the Apparel Impact Institute, outlines existing and innovative solutions to reduce emissions, unlock financing opportunities, and create a pathway to net zero by 2050. Through deep industry insights and financial analysis, this report serves as a guide for brands, manufacturers, policymakers, and investors committed to driving meaningful change.

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Wealth in Waste

This report is part of the “Sorting for Circularity: India” initiative led by Fashion for Good and its partners. It aims to explore the untapped potential of India’s textile waste industry to transition into a circular economy by identifying waste streams, analysing current practices, and suggesting pathways for systemic improvements across the value chain.

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Sorting for Circularity India

This project was designed to organise and optimise India’s textile waste supply chain. By evaluating various waste streams for collection, sorting, and pre-processing, the initiative aimed to enhance circularity in textiles. It sought to improve collection and sorting systems, foster recycling infrastructure, and introduce innovative solutions to generate new revenue streams and next-generation materials from textile waste-reducing reliance on virgin resources and minimising landfill and incineration.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Sorting for Circularity India: Post-Consumer Pilot

India generates around 3,944k tonnes of post-consumer textile waste annually, with 48% viable for recycling feedstock, though inadequate sorting and recycling systems prevent full utilisation. This project involved two primary pilots that tested sorting innovations: Matoha’s FabriTell desktop scanner for semi-automated sorting and PICVISA’s ECOSORT for fully automated sorting. The pilots aimed to assess these technologies’ ability to categorise waste by fibre and colour efficiently, ultimately facilitating quality feedstock production for recycling. Initial findings suggest India could effectively harness a closed-loop textile recycling system, with cotton and polyester blends as dominant waste types.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Sorting For Circularity Europe

The Sorting for Circularity Europe project was launched in early 2021 and initiated by Fashion for Good together with Circle Economy. The project was made possible by catalytic funding from Laudes Foundation and brand partners, adidas, BESTSELLER, Inditex and Zalando, with H&M Group as key project partners. The project addressed the need for data on textile waste in the market, identifying waste types and recycling opportunities.

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Problem Statement
Stakeholders involved

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Blueprints

The open-source, modular blueprint for sustainable Tier-2 textile manufacturing is a forward-looking, industry-wide tool designed to accelerate adoption of next-generation sustainability practices. It enables manufacturers to build and implement near-net-zero factories by providing clear operational pathways, alongside economic viability and social impact analysis of advanced processes and solutions. By breaking complex technical recommendations into adaptable modules, the blueprint allows manufacturers of all scales to integrate improvements in a phased, practical way, aligned with globally benchmarked best practices and emerging regulatory standards. The project aims to cover 7 geographies by 2030.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Demonstrator

Decarbonising textile processing cannot be achieved through individual technologies alone. It requires end-to-end implementation in real factories, where multiple innovations must operate together under production constraints, commercial timelines, and regional infrastructure realities. Demonstrator facilities play a critical role in bridging this gap — translating validated technologies into integrated, operating factories that generate the technical, financial, and operational evidence needed for scale.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Retrofit Track

Fashion for Good, in collaboration with its industry partner, the Apparel Impact Institute (Aii), is offering implementation support through the Retrofit Track in India. This is a limited opportunity, under which only three shortlisted facilities will receive hands-on guidance to apply the blueprint in their operations.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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India Blueprint

India’s textile and apparel industry is at a critical inflection point. Contributing 2% to GDP and employing 45 million people, the sector faces mounting pressure from water scarcity, climate risks, and stringent global sustainability requirements. To meet the government’s US$100 billion export target by FY2031, the industry must achieve an ambitious 18% CAGR—demanding a rapid shift from resource-intensive processing to net-zero manufacturing. The Future Forward Factories India blueprint, initially developed in collaboration with Arvind limited, and later expanded into an open-source blueprint addresses this challenge through scalable strategic recommendations, with refined impact and cost modelling suitable for replication across India’s textile manufacturing ecosystem.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included:

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Future Forward Factories

Initiated by Fashion for Good, Future Forward Factories focuses on transforming tier 2 processing in the textile industry through innovative low-impact, decarbonisation solutions. It aims to generate actionable blueprints for factories of the future that combine renewable energy and technology upgradation including mostly dry processing innovations. These blueprints take into account macro geographical factors, product customisations, and a lens of just transition to achieve near net-zero facilities that not only offer a strong return on investment, but are also inclusive and people-centric.

Problem Statement

The apparel industry faces immense pressure to meet the 1.5°C target set by the Paris Agreement, with fashion accounting for 2-8% of global greenhouse gas emissions. Scope 3 emissions, especially from processing (Tier 2), represent a critical challenge. Shifting to dry processing technologies has the potential to reduce water and energy use, contributing to lower emissions and a smaller environmental footprint.

Stakeholders involved

The D(R)YE Factory of the Future project brought together key industry leaders and innovators committed to revolutionizing textile processing. The project’s brand stakeholders included: