Key takeaways
- It’s been six years since industry leaders set a 12-year goal for slashing 100 megatons of CO2.
- Progress has been slow despite the fact that high-profile brands and retailers are deepening their decarbonization commitments and funding.
- The Apparel Impact Institute is focusing on making deeper impacts with electrification and other technologies, and working in more regions.
Where the Apparel Impact Institute (AII) goes, so goes sustainable fashion. If the nonprofit’s latest accounting of progress is a fair indicator, then apparel companies need to quicken their pace if they are to close the gap between today’s achievements and the Paris Agreement-aligned target of net zero by 2050.
The brands, retailers and suppliers that engage with the AII represent the vanguard of decarbonization work for the sector, which the United Nations blames for causing 4 to 8 percent of global climate emissions. The group is working with about 2,000 suppliers to prevent the release of 100 megatons of CO2 equivalent by 2030. But halfway toward that deadline they have only come 8.6 percent of the way. Even so, the AII reported in its 2024 impact report that the companies it already works with are deepening their commitments and moving toward deeper, lasting emissions reductions.
Here are some key imperatives to emerge from that report.
Raise more money
The San Francisco nonprofit is unique for organizing pooled financing and hands-on programs to reduce emissions across complex corporate supply chains. Its participants, however, have only contributed 7.8 percent of the planned $2 billion in capital by 2030. Suppliers have invested $124 million and the AII has provided another $32 million.
The nonprofit has an enviable roster of partners. Target, Lululemon, H&M, Group, Gap, PVH, Ralph Lauren and HSBC contribute to the AII’s Fashion Climate Fund, which for three years has been trying to raise $250 million. The nonprofit in March sought to rally more brands and retailers to commit $10 million each toward the fund.
In 2024, the AII co-launched the Future Supplier Initiative with the Fashion Pact, a Paris-based net zero collective led by fashion CEOs. DBS Bank and the Guidehouse consultancy also participated in the effort, which gathers collective financing toward high-impact decarbonization projects for suppliers.
Lately, the AII has seen increased project funding and other engagement from industry more than philanthropies, according to AII President Lewis Perkins. “It’s never going to feel like it’s fast enough or big enough when you’re tackling something this big, but [it’s] leaning into a smaller circle of brands going bigger, which kind of tracks with how the industry has been operating all along. You have a number of leaders who are at the table, and then you have a lot of brand retailers who also may want to engage in impact, but they’re maybe not necessarily resourced to do so.”
Engage more suppliers
From 2018 to 2024, the AII has engaged with 1,261 supplier facilities and 9,689 farms.
Last year, the vast majority of those suppliers were in raw materials. The AII counted 9,689 such Tier 4 suppliers. That was followed by 353 materials suppliers, known as Tier 2, and 321 garment makers, known as Tier 1. The rest were a mix, including a handful of Tier 3 operations, which generally sell to Tier 2 suppliers.
One problem: The sector’s top 1,800 suppliers account for about 80 percent of its emissions, yet many lack decarbonization roadmaps.
“We’re trying to build more inroads into those suppliers,” Perkins said. “Traditionally, we’ve done that through introductions from brands, and that remains a strong way to meet them.”
The AII is also taking a regional approach, he added, partnering with groups that already have local contacts, such as Cascale, WRI and the Solidaridad Network.
Listen to current suppliers
“There are a lot of ‘asks’ put on suppliers coming from brand retailers, as well as from various other NGO organizations,” Perkins said. “One of the things we heard last week, and will continue to hear, is about audit fatigue, certification fatigue — just looking at all they’re being asked to do and the cost of that.”
That’s why the AII is working closely with other multi-stakeholder initiatives that touch suppliers, from the farms through the materials purchasing. These include Cascale, Textile Exchange and the ZDHC (Zero Discharge of Hazardous Chemicals) initiative.
Perkins recently returned from a week in India, a key focus area for the AII this year along with China, Bangladesh and Vietnam. In India coal powers textile dyeing, spinning, and weaving operations, and the AII has engaged with 107 facilities there. In China, the planet’s largest apparel exporter, the organization has 450 partner facilities.
Next up for the AII in this realm: expansion in Turkey, Jordan, Egypt, Kenya and Ethiopia.
Continue picking low-hanging fruit
The AII’s pilot programs in 2024 included helping companies with Tier 1 decarbonization action plans; helping with renewable energy transitions throughout Asia; and helping 11 Italian tanneries for luxury brands use energy and water more efficiently.
In 2024, the organization removed the equivalent emissions of 52,119 cars, saved 2.4 million swimming pools of water and the energy usage of 14.3 million washing machines.
The AII will continue to run foundational energy efficiency programs. “In order to get larger levels of CO2 emission reduction, we are really looking at lowering the intensity of carbon that’s coming in on these projects,” Perkins said. “We’ve got to go to higher level projects.” To that end, the AII would direct capital toward electrification in Tier 2, where the majority of CO2 emissions happen, such as in “wet” processes like dyeing.
The organization’s Climate Solutions Portfolio tracks specific, vetted solutions for companies to consider for their CO2 targets. The AII offers grants for emerging technologies including for waterless dyeing, precision agriculture and electrification. Supporting low-carbon thermal energy to replace coal-fired boilers and other high-carbon operations is another focus.
Move beyond efficiencies
In 2025, the AII plans to expand past efficiency projects in its Climate Solutions Portfolio, achieving deeper decarbonization. Electrification is key, according to Perkins. “Other recent reports that we’ve launched on carbon intensity are pointing us towards transitions, to heat pumps and heat exchange,” he said.
For that, Perkins added, the AII could support companies in brokering Power Purchase Agreements (PPAs) for clean energy or to directly install electrification onsite.
Stay the course
In this period of geopolitical volatility, the AII does not anticipate major geographic pivots. Instead, Perkins expected continued further commitments to the suppliers that already have long-term partnerships with brands and retailers.
“Obviously, we’re in a year where there’s some transition that we’re going to learn more as we go,” he said. “But what we’ve consistently seen is dedication from the industry to continue advancing a lot of this work.”
