Tracing the transition towards a more sustainable textile production
World Bank (CC)

Good Fashion Fund embarks on a learning journey with GlobalCAD and adelphi

The textile industry is one of the most unsustainable industries. Current fashion supply chains are extremely polluting and wasteful: they produce 10% of total carbon emissions, and 35% of all microplastics in the ocean come from synthetic textiles.

Widespread social issues such as low wage levels and gender inequality also persist, and innovations that support a more sustainable and circular textile production are not yet being adopted at scale by manufacturers.

Although sustainable technology solutions are available, manufacturers often lack the capital and knowledge to invest in and scale up their production processes.

To help solve these issues, the Good Fashion Fund (GFF), a first-of-its-kind initiative, has been launched to create systemic change in the textile and apparel industry. The GFF provides long term USD loans and technical, environmental and social knowledge to manufacturers in the apparel supply chain in Asian countries (mainly India, Vietnam and Bangladesh). These loans enable manufacturers to invest in impact technology that helps them to create both economic growth, and social and environmental improvements in their factories.

The GFF investments finance for example equipment for dyeing, washing, printing and wastewater treatment. The new technologies reduce the use of hazardous chemicals and help save water and energy in the production process. This has not only a positive impact on the environment, but also on the workforce as workers are less exposed to dangerous materials.  

By improving the social and environmental impact of apparel and footwear manufacturing, the Fund aims to contribute to a significant number of SDGs. Source: GFF.

In addition to the investments, the GFF also supports manufacturers with creating and implementing environmental and social action plans. These plans are tailor-made for each company and contribute to further improving the factories’ environmental management and labour standards.

The Fund is managed by the impact investment management company FOUNT and supported by anchor investors Laudes Foundation and The Mills Fabrica, the investor Rabobank as well as Fashion for Good as sub-advisor. In addition, it works closely with Fairwear Foundation, environmental and social advisors and apparel experts such as the Sustainable Apparel Coalition.

Along with its investments, the GFF has established a monitoring system to measure the expected environmental and social improvements in textile production processes. To complement the GFF monitoring and impact measurement approach, GlobalCAD, in partnership with the consulting firm adelphi, have been selected to provide developmental evaluation services over the coming three years.

As independent external actors, GlobalCAD and adelphi facilitate a learning process that will generate knowledge and insights beyond mere numbers on emerging outcomes of the Fund’s operations. The consultants will conduct ongoing research to analyse factors that hinder or facilitate success of the investments. The findings of the developmental evaluation will inform decision making of the fund manager and other stakeholders.

As an initial step to embark on this learning journey, GlobalCAD and adelphi with the participation of the Fund’s key stakeholders – managers, investors and partners – created a learning framework for the developmental evaluation. It includes a detailed Theory of Change for the GFF and key questions that the developmental evaluation will seek to answer. The framework has three levels: the individual investee level, the fund level and the systems level.

The Fund enables manufacturers to invest in circular innovations, delivering economic growth and good fashion practice across the Five Goods. Source: GFF.

These three levels are reflected in the Theory of Change: through the GFF investments, the manufacturers should achieve specific outputs related to water, energy and material savings, economic performance and social improvements –the “Five Goods”.

At the fund level, the results of individual manufacturers would lead to an overallpositive outcome on economic growth and good fashion practice in the textile industry in those countries where the GFF makes investments.

Finally, the expected impact of the GFF is to contribute to a long-term system change towards sustainable fashion production through the mainstream uptake of impactful and disruptive technologies.

GFF High-Level Theory of Change

The GFF is aware that it will be difficult to achieve these results through its investments alone. Therefore, it also pays attention to engaging stakeholders from the textile industry and the financial sector. This will be done by sharing insights, successes and best practices from the GFF investments, which can serve as incentives for other organisations to replicate or scale up the GFF investment model.

For each of these levels, the consultants will develop specific data collection methods and tools. With the first investments to be done in 2021, the developmental evaluation will initially take an in-depth look into individual investment cases. In the following years, it will trace results at the GFF portfolio level and aim to identify how the GFF contributes to trigger change towards a more sustainable textile production.

Nina Retzlaff
Nina Retzlaff
Nina works as a program manager and senior consultant at CAD in promoting, managing, monitoring and evaluating partnerships for CSR, the base of the pyramid approaches, financial inclusion and sustainable private sector development. LinkedIn