New reports from the UN Climate Change’s Fashion Industry Charter for Climate Action have highlighted innovative fi nancing and market-based solutions to help reduce emissions across the global fashion industry.
The reports – Carbon Market Solutions for Decarbonizing Fashion and Financing Mechanisms to Support Decarbonization within the Fashion Sector – examine ways to channel capital into emissions reduction, particularly among upstream manufacturers in major production countries.
The studies highlight tools including internal carbon pricing, carbon insetting, mitigation contributions, carbon removals, green and sustainability-linked loans and bonds, grants, blended fi nance and energy performance contracts.
A key fi nding is that small and mediumsized upstream suppliers often struggle to access affordable fi nancing, despite much of the industry’s emissions being concentrated in these parts of the supply chain.
Fragmented production networks, limited data, short-term purchasing practices and perceived investment risks remain major barriers.
The reports call for stronger collaboration among fashion brands, suppliers, fi nancial institutions and policymakers.
Pooled fi nancing, collective power purchase agreements, shared verifi cation systems and supplier-focused decarbonization programs could help reduce costs and accelerate the adoption of clean technologies.
The fi ndings are intended to help the fashion sector advance its commitment to achieving net-zero emissions by 2050, while improving supply-chain resilience and competitiveness