The Future Supplier Initiative has introduced its inaugural collective financing model in Bangladesh, partnering with four prominent global fashion companies to bolster apparel suppliers in their transition to decarbonisation.

H&M Group, Gap Inc, Mango and Bestseller have committed to the initial decarbonisation program in Bangladesh, as announced in a statement on Thursday.

The initiative, facilitated by The Fashion Pact in collaboration with the Apparel Impact Institute, Guidehouse, and DBS Bank, aims to extend its efforts beyond Bangladesh to other critical apparel manufacturing regions such as Vietnam, India, China, Italy and Turkey.

The initiative focuses on the apparel sector’s substantial carbon emissions from supply chains (Scope 3 emissions), aiming to accelerate the transition to net-zero emissions.

It distributes financial risks and obligations associated with adopting renewable energy sources in tier 1 and 2 garment and textile factories.

Designed as a brand-agnostic mechanism for project development and financing, the initiative supports brands and suppliers in meeting science-based targets aligned with a 1.5-degree trajectory, according to H&M Group’s statement.

To overcome barriers hindering factories from adopting electrification and renewable energy solutions, the initiative will provide technical support and financial incentives.

During its inaugural year, the initiative will prioritize factories based on their potential impact, develop technical proposals for comprehensive decarbonisation, and mitigate lending risks by offering favorable project implementation terms.

In the second year, the focus will shift to project execution and monitoring to assess climate impacts resulting from these investments.

In addition to financial incentives, the initiative will offer technical assistance to help suppliers identify and implement low-carbon technologies and solutions.

Baseline assessments and ongoing monitoring will validate the effectiveness of financed projects in reducing emissions.

The initiative aims to identify and support projects with the highest potential impact, fostering collaboration among global and regional fashion brands.

This transition emphasizes concrete implementation and measurable reductions beyond mere energy efficiency metrics, as highlighted in the release.

Eva von Alvensleben, executive director and secretary general of The Fashion Pact, said that the cost of inaction on climate change was unaffordable. To achieve its objectives and overhaul its supply chain, the fashion sector must swiftly bridge the divide between ambition and implementation, she added.

‘No single business alone can solve this challenge, but by sharing the costs, risks and responsibilities of the transition to renewable energy, we can build an ecosystem of solutions and kickstart a new era of change,’ she said.

‘We know that as an industry, we still have many steps ahead of us, but we believe that the Future Supplier Initiative can make a positive and significant difference,’ Anders Holch Povlsen, owner and chief executive officer of Bestseller said.

The Future Supplier Initiative shows that solutions are readily available and come with proven impact, but it requires commitments from brands and investors that are willing to invest, H&M Group CEO Daniel Ervér said

Toni Ruiz, CEO of Mango, said that to achieve this industry’s ambitious climate goals, it was imperative that every stakeholder leveraged their influence to drive tangible change.

A joint effort among brands and retailers is essential to create conditions where suppliers are motivated and capable of making these investments, he added.