How Fashion Industry Can See Decarbonization As An Investment Opportunity Rather Than A Cost

An estimated $1 trillion is required to finance the decarbonisation of the fashion industry by 2050
Fashion Industry Can See Decarbonisation As Investment Opportunity Rather Than A Cost

With more than 2 percent of the global greenhouse gas emissions stemming from the fashion industry and the global average temperatures projected to rise by 3 degrees Celsius this century, strong actions are expected from the industry to curb emissions and achieve a target net-zero by 2050.

An estimated $1 trillion is required to finance the decarbonization of the fashion industry by 2050, as per a report by Fashion for Good and Apparel Impact Institute and sponsored by HSBC. 

“The good news is that a strong pipeline of solutions - both disruptive and ready to be implemented - can drastically decarbonize the industry. This report highlights that not only are the opportunities plentiful and financially attractive, but they are key to getting us to a net-zero, circular industry,” said Katrin Ley, Managing Director, Fashion for Good.

Though $1 trillion may appear to be substantial, the majority of this spending is allocated to projects that offer an attractive financial, as well as environmental, return on investment and can therefore be funded by financial capital. More than $35 trillion of financial capital is available globally for good return Environmental, Social, and Governance (ESG) investments, a figure expected to exceed $50 trillion by 2025, according to insights from Bloomberg Intelligence. 

However, critical barriers to unlocking the financial capital needed remain, experts believe. The report found 47 percent of CO2 reductions come from implementing existing solutions, while 39 percent come from scaling innovative solutions, and 14 percent from other solutions - including reducing overproduction, material efficiency improvements, and scaling circular business models. 

The financing opportunity is multi-faceted and will require a committed and coordinated effort by brands, manufacturers, philanthropy, government, and industry organizations, experts believe. 

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