Investment opportunity: Good Fashion Fund
The Good Fashion Fund is a first-of-its-kind initiative to create systemic change in the textile & apparel industry by financing the implementation of highly impactful & disruptive production technologies in Asia.
The current processes in garment supply chains have severe negative environmental and social impacts. Current fashion supply chains are extremely polluting and wasteful; widespread social issues such as low wage levels and gender inequality exist and circular innovations are not yet being adopted at scale by manufacturers. There are sustainable solutions available, but they lack the capital to scale up their technologies within existing supply chains.
The Good Fashion Fund addresses this gap by connecting the most promising impact technologies to the industry to collaboratively tackle its challenges. We enable manufacturers in the apparel supply chain in Asia (mainly India, Vietnam, Bangladesh) to invest in circular innovations, delivering both economic growth and good fashion practice across the Five Goods:
- Good Materials: Avoidance of waste and hazardous chemicals (SDG 6,8,14)
- Good Economy: Revenue growth & additional catalysed funding (SDG 8)
- Good energy: Increase in renewable energy use / reduction in energy use (SDG 7,8)
- Good Water: Increase in treated wastewater / de-crease in consumption (SDG 6,8,14)
- Good Lives: Fair jobs improved and created (SDG 8)
The Fund aims to demonstrate how to invest beyond sustainability and towards a restorative and regenerative apparel supply chain. In practice, this means development and/or adoption of recyclable and safe materials, renewable and efficient energy, closed loop manufacturing and the creation of fair jobs and growth. Our goal is mainstream adoption of impact technologies and good fashion practices by apparel manufacturers.
What we offer:
GFF provides long term USD debt in addition to technical, environmental and social expertise to Asian apparel manufacturers to adopt sustainable production to generate environmental and social impact across multiple SDG’s. GFF provides loans to investees in the range of USD 1 to 5 million and the loan should result at least in 50% reduction of one of the 3 relevant Goods (Materials, Energy and Water).
We work closely with our partners including brands, manufacturers, E&S experts, NGO’s, technical experts, Sustainable Apparel Coalition.
Our impact methodology is based on the best market standards, thanks to partnerships with leading organizations in the field of environmental and social impact. GFF uses the Higg-index, a widely accepted and adopted environmental index for the apparel industry in its assessment.
A key objective of the Fund is also to contribute to the improvement of workers conditions and workers rights within the industry, to start with the demonstration of improvement within GFF’s investees.
We work with dedicated local and international partners to implement, measure and monitor the improved social conditions during the long term of our investment.
Laudes Foundation (previously C&A foundation) is an anchor investor alongside The Mills Fabrica, with an initial ‘close’ in September ’19 of USD 12.4 million junior equity capital. The target fund size is USD 60m with a first close of USD 30m. The capital structure of the Good Fashion Fund is a so-called blended finance structure comprising 3 different risk/return layers: Junior Equity /first loss, Senior Equity (preferred return of 2%) and a Senior Debt tranche. The fund has a 2/1 equity to debt ratio. We are in final negotiations for the Senior Debt capital and are now looking to raise additional Equity. The GFF term is 10 years.