The global fashion industry is a multi-trillion dollar industry, producing over 100 billion garments annually. The key environmental challenges for the industry are complex and interrelated, but most broadly fall under: land use, water use, chemical use, biodiversity loss and greenhouse gas (GHG) emissions. This paper focuses on the latter — GHG emissions. The findings in this report, produced by Fashion For Good and Apparel Impact institute, are significant - their analysis shows an estimated USD1 trillion is required to finance the decarbonisation of the fashion industry by 2050.

Their analysis estimates the emissions reduction of existing and innovative solutions to drive the fashion industry to net-zero by 2050, and calculates the finance needed to bring them to scale. The report evaluates solutions to reach net-zero in the fashion industry by 2050, including a shift to renewable energy, sustainable materials and processes, accelerating the development of next generation materials, and phasing out coal, amongst others. The total investment required to fund the entire range of solutions amounts to just over USD1 trillion; 61 per cent of the financing is required to implement the existing solutions, with the remaining 39 per cent of funding required to further develop, scale and implement the key innovative solutions as highlighted in this study.

Understanding the financing opportunities and sources for implementing the decarbonisation solutions is pivotal to map a pathway for the future. This study unravels key insights, actions and recommendations to unlock the USD1 trillion financing opportunity. These include a cost breakdown by financier groups needed to accelerate the transition to a net-zero industry, recommendations for governments to strengthen policy, mechanisms to catalyse private investment including blended capital approaches, stronger brand engagement and commitment to innovate with suppliers, and for banks to prioritise key production regions and innovative financing opportunities.

To mobilise USD1 trillion and overcome barriers to financing the transition to net zero, a concerted effort is needed by five key stakeholder groups: financiers (debt and equity), manufacturers, brands, philanthropy and governments, as revealed in this study. The recommendations to stakeholders are centered around the conditions required to enable a larger flow of financing towards these projects - finding it critical to create an environment where investors are presented with projects that are (1) attractive from a risk-return perspective, (2) impactful and (3) understandable. Reaching net-zero by 2050 will require all of these stakeholder groups to work together and implement these necessary changes in order to transform the apparel industry.

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