Energy-saving projects are still the most effective way for many textile manufacturers to make sustainable gains, especially in the industry’s major hubs in Asia, and both technical help and financing are now available to realise such projects. This was the central message of the ITMAconnect webinar, Impact Financing for Sustainable Transformation. In the discussion co-ordinated by Jeroen Vits, ITMA Services board member, the following names took part: Ryan Gaines, CFO at Apparel Impact Institute (Aii), Michael Rattinger, a senior climate change specialist for the Asian Development Bank (ADB) and Joyce Tsoi, senior director of the decarbonisation programme of Cascale – formerly known as the Sustainable Apparel Coalition (SAC).
Cascale provide a platform for collaboration in sustainable transformation
Cascale, as an alliance of 300 companies representing every step of the global value chain for apparel and textiles, has as decarbonisation programme that supports the industry in working towards emissions reduction via collaboration, member support, and guidance.
“There is a lot of low hanging fruit that textile manufacturers throughout Asia can gain from energy savings, both from the procurement of solar energy and from the installation of solar energy at their manufacturing plants,” said Joyce Tsoi.
Partnerships are the key to realising a lot of common goals, Tsoi added, with Cascale members benefiting from access to a diverse network of like-minded industry leaders and organisations, providing opportunities for collaboration, knowledge-sharing and potential alliances.
Aii funds and scales projects that accelerate positive impact
Cascale also partners with the California-headquartered Apparel Impact Institute (Aii), a non-profit, non-membership collective that identifies, funds and scales projects that accelerate positive impact in the apparel and footwear industry. It is funded in part by grants from brands and philanthropic organisations and in part by service fees for its technical work.
Aii’s Fashion Climate Fund is a US$250 million donor-pooled fund and its Climate Solutions Portfolio (CSP) is a registry of proven carbon-reducing programmes and solutions that companies can consult.
“We are active in projects assisting the transition of companies to renewable energy and the phase-out of coal, since many Tier 2 manufacturers are still using coal-fuelled boilers,” said Ryan Gaines and noted: “Other areas where we offer technical assistance and sponsor experts to make assessments include, for example, machinery retrofits and wastewater reuse.
“Investing in the textile industry can be daunting for those not familiar with it”
The Asian Development Bank (ADB) is working towards a prosperous, inclusive and sustainable Asia while making concerted efforts to eradicate extreme poverty in the region, assisting its members and partners by providing loans, technical assistance, grants and equity investments to promote social and economic development. It further seeks to mobilise financing by tapping into official, commercial and export credit sources.
Michael Rattinger said that in assessing projects, they look closely at the bankability of the company involved, the market demand for its products and the feasibility of a project, but they also look very strongly at impact, and if there is value addition in terms of sustainability. Rattinger continued: “Our assessments go beyond that of regular finance houses in seeking projects that are ambitious, but also realistic. We are also good at bringing in third party investors because investing in the textile industry can be daunting for those not familiar with it, involving complex supply chains across many countries. There’s a need to understand government policies towards this market too, and how different sources of finance can be combined.”
Rattinger cited the US$11.2 million package secured for Envoy Denim in Bangladesh as a recent success story. Envoy has used this funding to establish an automated and more energy efficient spinning plant with an annual yarn production capacity of 3,600 tons.
