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Fashion industry needs $1.04 trillion to achieve net zero by 2050: Report

  

Fashion industry needs 1.04 trillion to achieve net zero by 2050 ReportTo curb carbon emissions and achieve net-zero by 2050, the global fashion industry needs to introduce disruptive solutions and unprecedented actions, says a new report by Fashion for Good and Apparel Impact Institute. Sponsored by HSBC, the report charts out a trajectory for the industry to meet its net-zero ambition, mapping the integral levers such as renewable energy across existing solutions and innovative solutions such as next generation materials.

The report breaks down the required funding of $1 trillion by solution category and identifies the types of funders likely to benefit from the positive returns. Titled, ‘Unlocking The Trillion-Dollar Fashion Decarbonization Opportunity: Existing And Innovative Solutions’, the report estimates reduction in emissions of existing and innovative solutions, and calculates the finance needed to bring them to scale and drive the industry to net-zero by 2050.

ESG investments to reach $50 trillion by 2025

Majority of the $1 trillion spend is allocated to projects that offer an attractive financial, as well as environmental, return on investment. More than $35Fashion industry needs 1.04 trillion to achieve net zero by 2050 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 required financial capital remain. The report highlights these barriers and presents examples of financing opportunities.

The financing opportunity is multi-faceted and will require committed and coordinated effort by brands, manufacturers, philanthropy, government, and industry organisations. The report splits the amount of finance required per emission-reduction solution across the different financiers, appealing to different risk appetites and profiles, and providing a nuanced and detailed pathway to achieving net-zero.

Most reductions from existing solutions

The report estimates 47 per cent of carbon dioxide reductions come from implementing existing solutions while 39 per cent come from scaling innovative solutions and 14 per cent some from other solutions including reducing overproduction, material efficiency improvements, and scaling circular business models.

It evaluates seven solutions to reach net-zero in the fashion industry by 2050, including a shift to renewable energy, sustainable materials and processes, accelerating the development of next generation materials, and phasing out coal, amongst others. The total cost of implementing these solutions and achieve net-zero is $1.04 trillion, including $639 billion towards existing solutions and $405 billion towards innovative solutions

 
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