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Supply Chain
Good Fashion Fund Seeks Sustainable, Scalable Supply Chain Solutions

If we are to really shift the textile industry from one that is harming workers, local communities and the environment to one that is circular and sustainable, scalable solutions will be necessary.

A new investment fund, the Good Fashion Fund, aims to address a real need in the garment industry by promoting scalable solutions around key supply chain challenges.

“The Good Fashion Fund is ... focused solely on driving the implementation of innovative solutions in the fashion industry,” Katrin Ley, Managing Director of Fashion for Good, the initiator of the fund, told Sustainable Brands.

In addition to Fashion for Good, the fund counts C&A Foundation, FOUNT and Mills Fabrica as founding members. The initial size of the fund is about $13 million, which will be dispersed to manufacturers as loans to enable them to adopt highly disruptive, early-stage technologies.

Solutions are necessary because it's become clear that the global garment and fashion industry has a broad negative impact on people and the planet. From widespread labor abuses and water pollution to waste management, if we are to make textile supply chains sustainable or reach the ultimate goal – full circularity – a lot has to be done, and fast.

There are solutions to this, and several companies have shown it’s possible to create an ethical apparel supply chain. Industry veterans including EILEEN FISHER, Kering and Patagonia has for years been a leader in this; and startups such as Outerknown, Pact Apparel and Reformation are also showcasing new practices. The problem is that these companies only account for a tiny percentage of global garment production — and whatever impact they have had has more than been outweighed by the overall growth in demand for clothing and fast fashion. What we need are scalable solutions that can be used by companies of all sizes, and all around the world.

“While sustainable solutions do exist today, there is a lack of capital available to scale these technologies within the supply chain,” Ley said. “The fund was created to address this gap — connecting the most promising technologies to the industry to collaboratively tackle its challenges.”

The fund wants to make a dent in several sustainability and ethical gaps the team have identified, including the high water usage of cotton; the fact that over 70 percent of used textiles end up in landfills, rather than being recycled or reused; low wages; and pervasive gender inequality. They also found that there is a lack of financial vehicles willing to take the risk of investing in new innovations, as well as a lack of expertise to assess these innovations.

“The fund demonstrates how to invest beyond sustainability towards a restorative and regenerative apparel supply chain, addresses the need in the local markets for long-term financing for manufacturers, and contributes to multiple SDGs,” Bob Assenberg, Director of the Good Fashion Fund, said in a press statement.

The Good Fashion Fund will initially focus on South Asia, a region that is increasingly at the center of global textiles and fashion. We also know all too well the problems facing this region — especially after the horrific 2013 collapse of the Rana Plaza factory in Dhaka, Bangladesh, which killed over 1,300 workers, mostly women. But in neighboring India and Pakistan, too, the garment industry has been expanding rapidly; and there are growing concerns about labor and environmental impacts.

“We hope to have reached the $60 million target fund size [in three to five years], and we should have disbursed most of the committed capital at that point to investees, thereby supporting many South Asian manufacturers in their implementation of best-in-class sustainable solutions,” Ley said.

If we are to really shift the textile industry from one that is harming workers, local communities and the environment to one that is circular and sustainable, scalable solutions will be necessary. Years of advocacy and awareness-building have brought us to a stage where we understand the problem better than ever before. Now, it's time to create and implement solutions.