FfB Foundation: FABRIC Initiative will address textile industry's impact on nature

24 oktober 2024

As world leaders gather in Cali, Colombia, for the UN Biodiversity COP16, the Finance for Biodiversity (FfB) Foundation is proud to announce the launch of FABRIC (Fostering Action for Biodiversity through Responsible Investment in Clothing), an investor-led collaborative engagement initiative designed to address the environmental impact of the textile industry, with a particular focus on apparel retailers.

FABRIC aims to coordinate stewardship actions that promote responsible practices towards nature and align the industry with global biodiversity targets.

A coalition of 16 investor members of FfB Foundation, collectively representing €5.85 trillion in assets under management or advisement, including Domini Impact Investments LLC, EOS at Federated Hermes Limited, Aéma Groupe, Ofi Invest AM, LBP AM, Robeco, Pictet Group, Achmea Investment Management and Sycomore AM, will begin engaging with selected companies from the luxury, sportswear, footwear and apparel retail sub-sectors in the first quarter of 2025. This collaboration will kick off with letters sent to company representatives, initiating constructive dialogues aimed at driving concrete actions. The investor expectations have been tailored to the specific impacts of each sub-sector. More details on the companies selected will be communicated after the initiation of the engagement, in January 2025. 

Mitigating negative impacts and improving supply chain traceability 

FABRIC’s primary goal is to mitigate the negative impacts on biodiversity across the entire lifecycle of textile and apparel products. From sourcing raw materials to end-of-life disposal, the initiative strives to align industry practices with the Global Biodiversity Framework’s 2030 goals, encouraging more sustainable and nature-positive strategies within the textile sector. 

A key focus of the FABRIC initiative is to enhance supply chain traceability. Participating companies will be encouraged to assess their nature impacts, risks, dependencies and opportunities using the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP process. Companies are expected to publicly disclose the types and volumes of fibres they use and implement action plans aimed at improving traceability, with particular attention to high-volume and high-impact fibres. This approach aims to create a precise mapping of the entire supply chain​.

Specific targets and action plans for nature-positive change

FABRIC emphasises the need for companies to set science-based, time-bound targets that focus on key biodiversity impact drivers. Specific action plans include but are not limited to: 

• Phasing out virgin fossil fuels from the supply chain.
• Achieving zero deforestation and conversion across value chains by 2025, in line with the principles of the Accountability Framework Initiative.
• Promoting circular business models, which involve extending product lifespans, increasing the use of recycled or sustainable materials, reducing textile waste, and improving end-of-life management, such as introducing collection mechanisms and banning unsold item disposal.
• Setting Science-Based Targets for Nature (SBTN) on land use and freshwater, prioritising critical areas identified through impact assessments​.

Structured investor expectations 

FABRIC has developed a set of investor expectations to guide its engagement with companies. These expectations include both general requirements, such as supply chain transparency and fibre mix disclosure, and sub-sector-specific asks aimed at addressing the unique challenges of luxury, sportswear, footwear and apparel retailers.

Building a sustainable future for the textile industry

FABRIC represents a powerful step toward a more sustainable, nature-aware textile industry. By fostering collaboration and holding companies accountable to clear, science-based targets, the initiative aims to reduce the industry's impact on biodiversity and planetary boundaries.

'The FABRIC collaborative engagement initiative is the first programme of its kind for our members as the FfB Foundation, marking a crucial step towards transforming the textile industry’s relationship with nature,' said Anita de Horde, Co-Founding Executive Director, Finance for Biodiversity Foundation.

'By mobilising investors to drive meaningful change within companies, we aim to create positive impact in a sector known for its significant environmental challenges. Through FABRIC, we are not only addressing issues like deforestation, resource use and waste, but also encouraging transparency and continuous improvement through regular monitoring and reporting. This initiative is about creating a future where the apparel industry aligns with global biodiversity goals, safeguarding ecosystems for generations to come.'

Sonya Likhtman, Associate Director – Engagement, Federated Hermes Limited, commented: 'The apparel sector is particularly vulnerable to nature-related risks due to high impacts and dependencies across the value chain. Investor engagement with companies will be important for moving towards better management of the sector's nature-related impacts and more circular consumption models. EOS at Federated Hermes Limited looks forward to harnessing its existing engagement with the sector by joining FABRIC and supporting the transformation needed to address nature loss, alongside climate change, pollution and human rights impacts.'

Arthur van Mansvelt, Senior Engagement Specialist, Achmea Investment Management, added: 'The garment sector currently has major negative impact on the environment and our climate. The sector causes some 8 percent of the total CO₂ emissions worldwide, uses more than 90 trillion litres of water annually and causes much water pollution. The sector urgently needs to shift to using sustainable materials and become more circular, to reduce its climate – and nature footprint.'

Juan Salazar, Senior Engagement Specialist, Pictet Asset Management, added: 'The apparel and textile industry is confronted with various physical and transition risks associated with biodiversity, now and in the future. We look forward to collaborating with fellow investors in this groundbreaking initiative to foster the creation and execution of robust strategies that address these risks, seize opportunities, and ultimately foster long-term sustainability and shared value.'

Clémence Bourcet, ESG analyst - biodiversity expert added: 'Sycomore AM was an early signatory of the Finance for Biodiversity Pledge in 2021 and since then has been participating in its engagement working group. We are very happy to take part in FABRIC, the first collaborative engagement initiative launched by the Finance for Biodiversity Foundation. This commitment is fully aligned with our Natural Capital Strategy that encompasses key environmental issues including climate change, biodiversity and resources. We are convinced of the relevance of the FABRIC initiative with its focus on a specific sector to engage companies on precise biodiversity-related issues by joining forces and expertise with other investors.'