HSBC has committed $4 million to Fashion Climate Fund, a $250 million philanthropic fund that seeks to decarbonize the apparel and footwear sectors.
The fashion industry makes up over 2% of global greenhouse gas emissions, and needs $1 trillion of investment to make the low carbon transition.
The apparel and footwear sectors have sprawling global supply chains, with large portions running through Asia.
The supply chains start with the extraction of raw materials from plants and animals, moves through processing and material production, and to assembly and manufacturing of the product.
The Apparel Impact Institute (Aii) says that a big chunk of fashion’s emissions could be reduced through transitions to clean electricity, lower carbon fibers, adopting energy efficient practices and replacing coal in manufacturing.
More reductions could come from newer technologies like textile recycling, bio materials, and plant-based leather.
The fund is managed by non-profit Aii and other backers include H&M, H&M Foundation, the Schmidt Family Foundation, Lululemon, PVH Foundation, and Target.
HSBC emphasized the challenges of decarbonizing the fashion industry in an emailed statement.
Aii said $70 million has been committed to the fund to date.
There’s been some VC investment in alternative textiles, but the sector has also faced challenges.
Startup MycoWorks, which makes mushroom-based leather, recently opened a commercial-scale production facility in South Carolina and before that closed a $125 million Series C round with investors like Prime Movers Lab and SK Networks.
At the same time, startup Bolt Labs, which makes alternative textiles, announced earlier this year it was pausing production of its mushroom-based leather due to the challenges of securing capital.
(The report is made by Katie Fehrenbacher — the author of Axios Pro: Climate Deals)
