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.
Executive Summary
The fashion industry is responsible for approximately 2% of global greenhouse gas emissions, with the majority originating from raw material production and processing. To reach net zero by 2050, the industry must implement both existing and next-generation solutions, requiring over $1 trillion in investment.
This report maps six key decarbonisation solutions, including transitioning to renewable electricity, phasing out coal, improving energy efficiency, scaling sustainable materials, and adopting next-generation materials. With 61% of financing needed for existing solutions and 39% for innovative solutions, a blend of debt, equity, and sustainability-linked investments will be essential. Collaboration across the value chain, along with regulatory support, is critical for achieving a sustainable transformation at scale.
Goals of the Report
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Provide a comprehensive decarbonisation roadmap for the fashion industry.
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Outline existing and next-generation solutions that can drive emissions reductions.
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Highlight investment opportunities and the financial structures needed to support decarbonisation.
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Identify key barriers to financing and propose actionable strategies to overcome them.
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Promote collaboration across brands, manufacturers, investors, and policymakers.
Conclusion and Recommendations
Achieving net-zero emissions by 2050 is possible, but requires immediate and coordinated action. This report recommends:
- Scaling existing solutions such as energy efficiency, coal phase-out, and renewable electricity.
- Accelerating innovation in next-generation materials and circular business models.
- Mobilising financial investment through blended capital approaches, including sustainability-linked bonds and impact funds.
- Creating regulatory incentives to drive industry-wide adoption of decarbonisation technologies.
Enhancing transparency and data-driven impact measurement to track progress effectively.
Glossary
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Decarbonisation: The process of reducing carbon emissions to mitigate climate change.
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Scope 1, 2, and 3 Emissions: Categories of emissions based on their source; Scope 3 includes indirect emissions from supply chains.
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Next-Generation Materials: Innovative, lower-carbon alternatives to conventional textiles, including bio-based and recycled fibres.
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Sustainability-Linked Finance: Investment mechanisms that tie financial returns to environmental performance.
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Blended Capital: A mix of public, private, and philanthropic funding to de-risk sustainable investments.
Stakeholders Involved
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Brands: adidas, Stella McCartney, Kering, Levi Strauss & Co., PVH Corp, PUMA Group.
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Manufacturers: Arvind Ltd., TAL Apparel
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Innovators: Alchemie Technologies, Colorifix, Dryfiber, eCO₂ Dye, and Huue.
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Financial Institutions: HSBC, International Finance Corporation (IFC), and Good Fashion Fund.
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Sustainability Organisations: World Resources Institute (WRI), Cascale (Formally Sustainable Apparel Coalition), and Textile Exchange.
Contacts for the project
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Fashion for Good
- Katrin Ley – Managing Director
- Rogier van Mazijk – Investment Director
- Rory Hugill – Innovation Associate
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Apparel Impact Institute
- Lewis Perkins – President
- Ryan Gaines – Finance Director
Relevant Resources
Fashion for Good and Spring Lane Capital Report Defines How Project Finance Can Bridge the Innovation Commercialisation Gap
Unlocking the Trillion-Dollar Fashion Decarbonisation Opportunity Report
Fashion for Good Unveils Five-year Strategy Shifting to Scale Innovation in Fashion
Good Fashion Fund launched
A new funding platform initiated by Fashion for Good (FFG) has launched today that will focus on mobilising budding innovations within the textiles industry by providing the crucial capital needed to scale up such solutions.
Increased investment key to accelerating Europe’s textile recycling
As fibre-to-fibre textile recycling commitments increase across Europe, as well as the amount of textile waste collected, the infrastructure required to drive the move towards circular systems requires significant investment to scale.
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