In a pivotal moment for the fashion industry’s commitment to sustainability, Global Fashion Agenda (GFA) Chairman Thomas Tochtermann confronted top fashion CEOs 18 months ago. He emphasized that individual efforts to reduce emissions within their value chains would not suffice to meet vital climate goals. Tochtermann urged brands to unite and invest in transitioning major manufacturing countries from fossil fuels to renewable energy. At the UN’s COP climate summit in Dubai, GFA has unveiled a groundbreaking commitment of $100 million from Bestseller and H&M Group. This significant pledge will support the development of renewable energy capacity in Bangladesh, one of the world’s largest hubs for garment manufacturing.
Bangladesh, with its substantial environmental impact, serves as an ideal starting point for this initiative. Bestseller and H&M Group are spearheading the effort by contributing to a fund created by GFA. This fund will invest in Bangladesh’s inaugural utility-scale offshore wind farm, a $1.3 billion project led by Copenhagen Infrastructure Partners, a renewable energy investment firm. The ultimate objective is to establish a scalable model to address one of the fashion industry’s most pressing sustainability challenges: how to secure the extensive funding required for decarbonization.
The fashion sector faces an enormous uphill battle, with an estimated $380 billion needed over the next 25 years exclusively to develop renewable electricity sources for the industry. However, the challenge extends beyond funding. The majority of fashion’s environmental footprint arises during manufacturing in factories that primarily rely on power grids fueled by fossil energy sources. Shifting to cleaner energy options is now an imperative. Brands must shoulder the responsibility, but this entails substantial capital investments with lengthy return-on-investment periods—a significant departure from conventional industry practices.
Ulrika Leverenz, H&M’s Head of Green Investment, acknowledges the formidable obstacles facing fashion brands aiming to independently invest in large-scale renewable energy projects. To surmount these barriers, GFA, Bestseller, and H&M are pioneering a collaborative investment model in Bangladesh. In its initial stages, this project aims to encourage brands to collectively invest in an existing renewable energy development. The proposed wind farm, scheduled to commence operations in 2028 with a 500-megawatt capacity, holds the potential to reduce the country’s emissions by a staggering 725,000 tonnes annually.
While this initiative marks a significant leap forward, it represents only a fraction of the broader challenge confronting the fashion industry. Current emission projections indicate a 45 percent increase by the end of the decade, falling short of the necessary 50 percent reduction. Advocacy groups are intensifying their calls for swift action, increasing pressure on the industry to become a top priority on the policy agenda.
GFA plans to invite more brands to participate in the wind project in Bangladesh, with a minimum commitment of $10 million each. Bestseller has pledged to cover the entire $100 million investment, regardless of additional brand contributions. H&M has not disclosed the value of its investment.
The replicability of this model remains uncertain. Collective structures like this are rare, even outside the fashion industry, and renewable energy projects worldwide face political, structural, and economic challenges. Participating brands are taking calculated risks regarding their ability to claim credit for emissions reductions generated by the project. Bangladesh currently lacks a system for providing renewable energy certificates for corporate carbon accounts.
Despite these formidable challenges, GFA is actively exploring similar projects in other manufacturing countries, signaling that this pioneering initiative is just the beginning of transformative change within the fashion industry’s sustainability endeavors. This united effort by fashion powerhouses could be a pivotal step towards a greener and more sustainable future for the industry, ultimately benefitting the planet as a whole.
Read more about the initiative on: https://globalfashionagenda.org/renewable-energy-initiative/