Apparel sector can play “key role” on climate change

Victoria Gallagher | 8th August 2018

WASHINGTON – The global apparel sector can play a key role in cutting global warming and meeting the aims of the Paris Climate Agreement – that’s the view of Tomasz Telma, senior director for manufacturing, agribusiness and services for the International Finance Corporation (IFC). Telma suggested that delivering on the Paris Agreement will require “more concerted public and private efforts to limit GHG emissions,” adding that, “more private companies are finding attractive investment opportunities in solving the climate challenge.”

He also claimed resource efficiency in supply chains is a “great example of low-hanging fruit.” He said: “Curtailing water and energy usage reduces business costs along with carbon emissions, enabling companies to rapidly offset much—or even all—of the cost of investment.

“To reduce energy, water and chemical consumption in Bangladesh, IFC’s Partnership for Cleaner Textiles (PaCT) brought together key stakeholders, including the international sustainability network, Solidaridad, the Bangladesh Garment Manufacturers and Exporters Association, 13 global apparel brands, two technology suppliers, 215 apparel suppliers, and financial institutions. PaCT is supported by the government of the Netherlands,

“The results have been significant. The programme saves almost 22 billion litres of water and 2.5 million megawatt hours of energy annually. It keeps over 460,000 tonnes of carbon dioxide equivalent each year out of the atmosphere and has saved suppliers more than US$16 million annually.”

Levi Strauss, as reported last week, is currently working with the IFC to expand the PaCT program globally. A pilot of six suppliers with manufacturing sites in Bangladesh, India, Sri Lanka and Vietnam reduced greenhouse gas emissions on average by nearly 20 per cent in one year, and saved suppliers more than US$1 million in operating costs. LS&Co. plans to expand the programme beyond the garment assemblers to fabric mills, a particularly resource-intensive part of the apparel supply chain.

Telma added: “In addition to saving money on energy and chemicals, textile suppliers which invest in sustainability can also benefit from lower-cost financing. IFC’s Global Trade Supplier Finance (GTSF) program offers financing backed by receivables from major global brands. In 2014, IFC and LS&Co. introduced a new feature whereby suppliers with stronger environmental and social performance, as measured by the LS&Co. Terms of Engagement score, can qualify for lower interest rates. Lower rates are consistent with lower risk and offer a financial incentive for suppliers to invest in sustainability. Since joining GTSF, US Apparel, a Pakistan-based LS&Co. supplier, has sped up receivables payments by an average of 55 days and is saving US$40,000 annually in financing fees.”

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