Aii Announces First Fashion Climate Fund Grantees

Jasmin Malik Chua
·5 min read

The Apparel Impact Institute (Aii) announced on Tuesday the first round of beneficiaries of its Fashion Climate Fund, a $250 million grantmaking vehicle that it created to identify, fund and scale verified solutions to decarbonize the fashion supply chain.

BluWin, GIZ, Made2Flow, Precision Development and PwC, which made the cut from a pool of 150 applications, are listed on the nonprofit’s Climate Solutions Portfolio, a registry of credible carbon-squashing solutions that is also making its debut.

More from Sourcing Journal

The grants are funded through philanthropic contributions from the Fashion Climate Fund’s partners, including the H&M Foundation, H&M Group, Lululemon, the PVH Foundation, Target and The Schmidt Family Foundation.

Aii has its eye on driving 100 million metric tons of carbon dioxide reduction, helping the fashion sector halve its carbon emissions by 2030.

BluWin, which bills itself as a “high-impact climate solutions provider,” seeks to take the Clean by Design framework of facility energy-efficiency best practices, which has yet to be deployed at scale in Bangladesh, and extend them to Tier 1 and Tier 2 facilities across the manufacturing powerhouse.

GIZ, the main German development agency, is also looking to work in Bangladesh, where it seeks to unfold a large solar photovoltaic installation project across Tiers 2 and 3.

“We selected it because the Bangladeshi solar PV market is quite underdeveloped, both from an understanding of the benefits and the ease of implementation,” Pauline Op de Beeck, Aii’s environmental portfolio lead, told Sourcing Journal. “GIZ aims to de-risk and really accelerate the deployment of solar PV in Bangladesh.”

Made2Flow is a software company that specializes in data gathering and validation throughout the apparel supply chain. It wants to level up its platform by using machine learning to provide automated and customized impact-reduction recommendations for factories, reducing the cost and necessity of in-person expert visits while increasing the ability of energy efficiency to scale.

“So the grant funding is being used to develop that component of the software,” she said.

Precision Development’s project, which homes in on cotton cultivation in India, is “low tech yet effective,” Op de Beeck said. By comparing the colors of their leaves against a chart, farmers can more accurately ascertain how much fertilizer to apply, cutting down on cotton extraction’s highest emission source. The funding, she said, will take the initiative from the pilot to the model phase, rolling it out countrywide and then eventually to Pakistan as well.

PwC will be using the money to implement its so-called Cleaner Production System project across Tier 2 and 3 suppliers in Bangladesh and India, though there will be more of a focus on Tier 3, a “part of the value chain that has received less attention from an energy efficiency perspective,” Op de Beeck said. “So we’re very keen to get the learnings from that and to be able to disseminate across the sector.”

How much funding each project receives—and for how long—varies. GIZ, for instance, will be receiving nearly $650,000 over a three-year period, while PwC will secure $250,000 for a single year.

Quantifying success is a matter of whether the initiatives meet their anticipated carbon reductions on an annual basis or throughout the project.

“It’s not our intention to have one-and-done projects but multi-year initiatives that take shape either in conjunction with our existing programs and platforms or ongoing support and growth of these initiatives over time,” Kurt Kipka, Aii’s chief impact officer, told Sourcing Journal.

Kipka said that Aii, which knows what it’s like to receive grants, not just dole them out, seeks to be a good partner and organization to work with. While the Sustainable Apparel Coalition partner has put milestones in place that it will hold grantees accountable to, it also wants to help them with whatever industry expertise or knowledge that it can share to promote success.

“In no way shape or form would we want to withhold funds over time from our grantees, but it could be a matter of delaying progress [or] reevaluating what success might look like within each program, but doing that in a public and transparent way,” he said. “That’s one thing that I still think is a key differentiator for this work. We’re starting with a goal in mind for each of these programs and we’re going to make that progress publicly available.”

While Aii didn’t start out with an intentional theme for its inaugural batch of grant recipients, energy efficiency has become a common denominator. This is unsurprising since energy efficiency is “probably the biggest opportunity for the sector to make meaningful progress,” Kipka said.

At the same time, a greater focus will come with subsequent calls for applications. One learning from the process, Kipka said, was the lack of reliable data and industry knowledge about thermal energy and battery storage. For the latter half of 2024, Aii is looking for partners to develop data-driven roadmaps on these topics, which could hasten the shift from coal burning (in the case of thermal energy) and improve the financial return on investment when it comes to renewable energy procurement (vis-à-vis battery storage.)

It’s a matter of “following the pounds”—of carbon dioxide, that is—Kipka said.

Another thing Aii discovered while sifting through applications was the existence of many commercially viable and scalable solutions that don’t necessarily need grant funding but would benefit from a vetting process.

That’s where the Climate Solutions Portfolio can help, “not just now but in the future,” by having a mix of grantees as well as ready-to-go solutions that any organization can include in their decarbonization plan, Kipka said.

“Our goal is to make this something that’s incredibly value-added for solution providers and service providers as a recruitment business development opportunity that’s going to help point in the direction of solutions,” he added. “We continue to see the great potential for relatively low-cost solutions in this industry that are essentially going untapped across the sector that we want to bring as much attention to as possible.”

Click here to read the full article.