To 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 $35 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

Denim maker Vishal Fabrics is aiming for Rs 2000 crore topline in the next two fiscals. The denim maker is also investing in the expansion of its current capacity to increase denim production. The Ahmedabad-based company is encouraged by the two exceptional quarters in the first half of this fiscal. Vishal Fabrics caters to the premium and the super-premium end of the denim segment.

The company is also expanding its overseas presence by adding new markets in Latin America and Europe. This fiscal, it is looking for a ten per cent contribution from the export segment. From the next fiscal year, the target will be around 20 per cent. Vishal Fabrics has no plans to go into garments and apparels and will be confined to the B2B segment. Vishal Fabrics is part of the Rs 10,000 crore Chiripal Group.

India is one of the fastest-growing denim markets, where the domestic market has a CAGR of eight to nine per cent as compared with four to five per cent of denim as a fabric in the global market. Consumption of denim is on the rise in the country as it is now penetrating at the bottom level of the consumption pyramid at Tier III, IV and V places.

Global clothing manufacturer PVH Corp is winding up operations in Ethiopia. This could deal a blow to Ethiopia’s once rapidly growing economy and has been prompted by the US’ decision to cut Ethiopia from a US trade program, the African Growth and Opportunity Act, because of violations of internationally recognised human rights. The sanction goes into effect in January 2022. Unrest in the Tigray region of Ethiopia has been marked by gang-rapes, forced expulsions and manmade famine. Thousands of people have been killed.

As the crisis spreads – and if Ethiopia does lose AGOA eligibility – companies will increasingly be unable to source from Ethiopia. This will hurt Ethiopia’s economy, particularly the women who comprise the bulk of the workforce in the country’s apparel industry.

PVH Corp’s brands include Calvin Klein and Tommy Hilfiger. It has been a marquee occupant of Ethiopia's model industrial park in the city of Hawassa, where Africa’s second-most populous country has made clear its aspirations of rapid, Chinese-style development. Businesses like PVH had entered Ethiopia because of the government’s push in recent years to build a network of industrial parks to make clothing and footwear for export, along with the country’s large population of more than 110 million people and wages that are significantly lower than even places like Bangladesh and Cambodia.

Turkey is facing a high rate of inflation. The nearly 20 per cent annual inflation rate is driven by food, services, housing and transportation prices, leaving consumers with little money for their clothing needs. So people are purchasing only the minimum necessary textiles for their daily needs. Decrease in domestic demand will impact manufacturing as textile-apparel companies will cut down on their production.

Accompanying high inflation is the weakening currency. Turkey’s currency lira has lost around 25 per cent of its value since the beginning of 2021. Meanwhile, in addition to the high cost of fuel and other imports, the government this month raised the price of natural gas supplied to the industry by 48 per cent, as a global price spike drove up import bills.

One of the largest gas importers in Europe, Turkey depends on pipeline gas from Russia, Azerbaijan and Iran as well as liquefied natural gas (LNG) imports from Nigeria, Algeria and spot markets. As a result of the current scenario, new investment in the country’s manufacturing sector, especially from domestic players, will fall drastically. Already, people have started shifting their savings to gold and foreign currencies. One major reason for the high rate of inflation and the weakening of the currency is the government’s insistence on low interest rates.

Birla Cellulose, the pulp and fiber business of the Aditya Birla Group, has for the third year in a row retained top position in Canopy’s Hot Button Report. Birla Cellulose has been awarded with a dark green shirt for its efforts in the manmade cellulosic fiber industry, in supporting and conserving ancient and endangered forests, for bringing transparency across the value chain and game changing solutions for a circular business model in the fashion industry. Its efforts and investments are focused on creating innovative solutions for ecological challenges. Over the years, Birla Cellulose has raised its benchmarks in sustainability performance and targets scaling up the production of circular fibers to a level of 1,00,000 tons per annum by 2024. Its award-winning product Liva Reviva is made by utilising cotton waste as feedstock. As a leading sustainability-focused MMCF producer, Birla Cellulose operates 12 sites that apply environmentally efficient closed loop technologies that recycle materials and conserve natural resources.

Canopy’s Hot Button Ranking is the go-to resource for brands and retailers in the fashion industry when it comes to ensuring that they are sourcing from MMCF producers following sustainable forestry practices in order to eliminate the risks related to biodiversity loss and deforestation in their supply chain.

The higher GST rates for textile and apparel items from January 2022 has come as a blow to micro, small and medium-scale textile and clothing units. The manmade fiber sector would face 12 per cent rate from fiber to garments, while the cotton sector would have a five per cent tax on cotton and yarn and 12 per cent for fabrics and garments. As Sanjay K Jain, Chairman of the Textiles Committee of the Indian Chamber of Commerce points out in an industry, where almost 80 per cent units are in the MSME segment, fixing the rate at 12 per cent for fabrics and garments will only lead to higher prices for the common man,.

The move is expected to push up prices for consumers and spur inflation at a time when high raw material costs have already impacted prices. Since it is the micro, small and medium-scale units that make the low-cost garments mostly these units may suffer from a drop in demand with a possibility that in the long run many units in the unorganised sector move out of the GST net. A carrot and stick approach appears to have been followed. With the announcement of production linked Incentive scheme, GST rates have been increased by seven per cent.

As per Clothing Manufacturers Association of India Chief Mentor Rahul Mehta the notification was both, 'disappointing and distressing'. The move would lead to higher prices for end consumer at a time when high raw material costs had already impacted prices. The industry had made several representations to the government in the last two months to not change the rates and would continue to do so, he added.

Since almost 90 per cent of fabric production in the country is in the unorganised sector, increasing the rate to 12 per cent for fabrics is expected to hit power loom and handloom weavers. However the move to set right the inverted duty structure for the manmade fiber sector has been welcomed.

India’s exports in October 2021 rose 43 per cent compared to October 2020 reveal India merchandise trade’s latest stats. As compared to October 2019, exports in October 2021 exhibited a positive growth of 35.89 per cent in dollar terms and 43.30 per cent in rupee terms. Leather exports rose 15 per cent in October 2021. Carpet exports rose 10 per cent.

The cumulative value of exports from India for April to October 2021 grew 55.13 per cent in dollar terms and 53.87 per cent in rupee terms as compared to the period April to October 2020. As compared to April to October 2019, exports in April to October 2021 exhibited a positive growth of 25.97 per cent in dollar terms and 33.06 per cent in rupee terms.

All textile-apparel commodities/commodity groups recorded a positive growth during October 2021 vis-à-vis October 2020. These include cotton yarn/fabrics/made-ups, handloom products etc (46.2 per cent), manmade yarn/fabrics/made-ups etc (29.12 per cent), jute manufacturing including floor covering (27.44 per cent), handicrafts excluding handmade carpets (9.72 per cent) and readymade garments of all textiles (6.42 per cent). Continuing robust export growth signals a sustained economic rebound.

Children’s wear fair Pitti Bimbo will be held in Florence, Italy from January 11 to 13, 2022. The event will offer an extensive panorama of this highly diverse industry, with about 170 leading brands exhibiting, of which 81 will be coming from outside Italy. Among them, will be established and niche brands alike, providing a comprehensive international overview of children’s products, from essentials to sportswear, from directional fashion to everyday wear, from footwear to accessories. In parallel, several adult fashion labels will be presenting their children’s wear lines in their own stands at Pitti Uomo, which is being held simultaneously.

Pitti Bimbo’s exhibition area has been extended to include multiple pavilions, and the layout is different from the June session. The 100 per cent Bambino section will showcase leading and long-established children’s labels, offering a wide range of wardrobe choices for all ages, from babies to teenagers: luxury and tailored items, sportswear and urban wear. The Pitti Bimbo section is dedicated to avant-garde children’s wear and children’s lifestyle products, showcasing young, pioneering brands distinctive for their constant search for innovation, their materials and style.

Both visitor and exhibitor numbers will be up, compared to the last edition, thanks to targeted promotional initiatives to attract major international retailers as well as new, emerging e-tailers.

Techtextil North America and Texprocess will be held in Atlanta from May 17 to 19, 2022. These shows are the largest united platform for technical textiles, nonwovens, machinery, sewn products and equipment. Visitors can gain access to a vast array of products, technologies and solutions across verticals including fashion and apparel, interior design and upholstery, military/protective products, automotive and aerospace, medical and more.

With a diverse group of exhibitors serving the 12 major end-use sectors for technical textiles and nonwovens, Techtextil represents the entire spectrum of applications for technical textiles and nonwovens. The highly technical sessions will be led by experts in the fields of fibers and polymers, nonwovens, nanotechnology, biomedical engineering and more, and will provide a deeper look into the research driving textile innovation and product development for various industries.

Texprocess is the largest B2B platform in the Americas for sewn products, equipment, and software for the clothing and textiles processing industry. For three days, suppliers will come together with leading manufacturers, business owners and industry professionals from all over the world to explore new prospects and discuss the latest innovations. A symposium will provide expert-led panel discussions examining all levels of the supply chain. These topic-specific deep-dives will address the challenges, trends and technologies affecting the sewn products industry, and provide insights into the future of sewn products manufacturing.

American department store chains delivered strong results for the fiscal third quarter. Even though they are grappling with surging costs and snarled supply chains heading into the holiday shopping season they’re rerouting shipping to less congested ports to get goods onto shelves and are paying higher wages and expanding benefits for its workers amid a tight labor market.

Sales at Macy’s stores rose 35.6 per cent. The company booked strong sales of home goods, fragrances, jewelry, watches and sleepwear. Categories like dresses, men's tailored clothing and luggage continue to recover. Macy’s added 4.4 million new customers, a 28 per cent increase over 2019. Macy’s was able to increase inventory 19.4 per cent compared with last year's third quarter and will launch a third-party marketplace that will expand its assortment of product categories and brands.

For Kohl’s sales rose 15.5 per cent. The launch of Sephora shops at Kohl’s is getting a good response so far, with 25 per cent of those customers new to the retailer. They are also younger and more diverse. Overall inventory is down 25 per cent compared to 2019; women’s inventory is down even more. The company’s activewear is enjoying strong sales. Both companies have raised their annual financial outlooks.