The Tamesis
For example, Aii is currently expanding its Deployment Gap Grant program from pilot to full implementation. The scheme brings brands together, pools funding and helps cover the upfront costs that suppliers may face when taking decarbonisation measures, such as installing solar heat pumps to capture heat rather than coal. “The idea is to leverage a shared pool of funds to effectively provide rebates to vendors,” Aii’s Perkins said. “That way, everyone can really get involved in the game.”
Fashion Pact, a consortium led by CEOs of mostly European fashion companies, is also expanding its Future Suppliers program developed with Aii and professional services firm Guidehouse, which brings big brands together to help factories get loans by providing capital “guarantees” that attract banks and help secure better terms. Loan proposals were developed in the first few years of the program, and this year, those proposals will be rolled out to actual funded projects. H&M, Gap Inc., Bestseller and Ralph Lauren are among the growing list of participants, along with 50 suppliers.
While climate action is accelerating, advocacy groups and suppliers worry that demands for decarbonization ignore the impact on workers. Adaptation—which arguably has a more direct impact on workers—is being ignored, as are price cuts and other harmful purchasing practices that could lead to layoffs or accelerated production.
Despite rising sustainability requirements, tariffs and economic uncertainty have led some brands to lower factory prices. Saqib Sohail, director of engagement at the Microfibre Consortium and former director of social responsibility at Pakistani producer Artistic Milliners, explained that any increased costs could lead to cuts in other key areas, such as worker welfare. “We’re seeing retailers and purchasing teams put more pressure on suppliers,” which has led to layoffs and other layoffs, he said.
The Business and Human Rights Center (BHRC) is urging brands to include worker welfare and just transition commitments in their climate plans. Following the release of the Missing Clue report in June, the organization is tracking the climate commitments of 65 major fashion companies, including Amazon, Kering and Adidas, through follow-up surveys to understand whether brands are supporting decarbonization efforts with fair procurement prices, financial support for decarbonization and support for collective bargaining to protect workers. They also focus on heat stress commitment.
“In practice, a just transition requires green demands aligned with fair pricing, long-term procurement commitments, and worker voice through freedom of association and collective bargaining, so that climate action does not translate into accelerated production, layoffs, suppressed wages or unsafe working conditions,” said Anithra Varia, BHRC’s labor rights program manager.
BHRC focus groups of garment workers and unions in Bangladesh and Cambodia found that new, more efficient machines are also more productive, which could lead to layoffs or even higher production targets for workers. Women are generally less likely to be trained on these machines. Workers in Bangladesh told researchers that decarbonizing factories is important but should only be called green if they are “green for workers too”.
This broader, people-centred view of climate action is perhaps the most ambitious and urgent goal the industry is working towards this year.
