The Apparel Impact Institute (Aii), a global nonprofit, has introduced the Brand Playbook for Financing Decarbonisation, with support from HSBC. This comprehensive guide outlines 12 financial strategies designed to help the global apparel and footwear industry secure capital for supply chain decarbonisation initiatives.
Despite the industry’s awareness of its substantial carbon footprint, the financial burden of decarbonisation has largely fallen on producers and manufacturers, who struggle with high interest rates and insufficient incentives for climate investments. This financial challenge hampers progress toward net-zero targets and complicates brands’ efforts to meet their ESG goals, especially concerning Scope 3 emissions.
The Brand Playbook leverages Aii’s industry insights and HSBC’s financial expertise to present innovative financial models that encourage producers to invest in carbon reduction projects. Strategies include offering premiums for sustainable products and providing direct loans for facility upgrades. The playbook, featuring real-world examples, details the risks and benefits of each model, emphasising the need for tailored approaches to decarbonization.
“As part of HSBC’s commitment to supporting the transition to net zero, we’re proud to join forces with Aii to help empower companies to make strides toward decarbonisation, and to mobilise sustainable finance across their value chains,” said HSBC Group Head of Policy & Partnerships, Jenny McInnes.
She added, “As a global financial institution, we want to work closely with brands and suppliers to provide tailored, innovative financing that can scale up investments in sustainable practices across supply chains.”
Lewis Perkins, President of Apparel Impact Institute said, “Climate change is already one of the biggest vulnerabilities in today’s global supply chains. Brands and producers need to transcend traditional power imbalances and shift towards bold, collaborative approaches that support systemic change. At Aii, we have a vantage point that allows us to understand each stakeholder’s unique challenges and barriers, and we’re excited to help brands determine how to best use their resources to create attractive financing options for their suppliers and drive tangible change across the industry.”
The playbook also explores how different funding sources, including philanthropic funds, can be utilized to maximize impact. This initiative builds on Aii’s goal to unlock $2 billion in capital for comprehensive industry decarbonisation.