Zara owner Inditex backs a World Bank-led fund aiming to raise $400 million to decarbonise fashion suppliers

Zara owner Inditex is backing a new fund that aims to mobilise up to $400 million to help textile, apparel and footwear manufacturers in emerging markets cut their environmental impact, The Business of Fashion reported on 10 November. The Decarbonisation of Textile, Apparel & Footwear Suppliers (D-TAFS) Fund was launched by the World Bank’s International Finance Corporation (IFC) and investment manager Social Investment Managers & Advisors (SIMA).

How it works

The fund will offer long-term loans on preferential terms, plus technical assistance, directly to factories and energy developers in Asia, the Middle East, North Africa and Latin America, for projects such as renewable energy, machinery upgrades, water conservation and wastewater treatment. Inditex and the IFC are the largest investors, committing up to $50 million and $60 million respectively; Dutch FMO, France’s Proparco, British International Investment and the Global Environment Facility are also backing it. A first round is expected to raise $225 million.

The initiative targets a key obstacle: smaller suppliers often lack affordable financing for cleaner technology. According to BoF, most of fashion’s largest brands remain behind their own emissions-reduction schedules.