The fashion industry has a pollution problem. The $2.5 trillion global industry contributes 20 to 35 percent of microplastic flows into the ocean, and it reuses less than 1 percent of the 53 million tons of textiles it produces annually.

To address this problem, Amsterdam-based Fashion for Good created the Good Fashion Fund (GFF), the first investment fund focused exclusively on encouraging collaborations between fashion and technology.

Launched in September 2019, GFF is one of Fashion for Good’s three programs that leverage technology to transform the fashion industry to become more sustainable while not sacrificing profit. One is an accelerator; the second is an information hub; and the third—GFF—invests in the implementation of cutting-edge technologies to help the textile and apparel manufacturers in Southeast Asia specifically, India, Bangladesh, and Vietnam) scale while also recycling and using less energy.

Mindful technology marries textile production

Fashion for Good has allocated $60 million in total for GFF, with an investment range between $1 million and $5 million per recipient, which they would disperse in a three-to-seven-year period.

The loans are intended for small- and medium-sized manufacturers, who generally lack both the finances and the knowledge to make their production processes sustainable. For GFF’s director, Bob Assenberg, the fund’s particular marriage of environmentally mindful technology and textile production fills a significant gap in the industry.

“In contrast to other industries, much of the work in the apparel industry is still being done through manual labor,” he explains, “so there are relatively fewer changes in the adoption of new technologies.”

Initiatives currently under consideration for GFF include US-based SeaChange Technologies, which has created a one-step wastewater treatment system for textile and apparel manufacturers; Israel-based Sonovia, which uses an ultrasound-based technology to make textile fibers more durable and reusable; and Netherlands-based DyeCoo, which has developed a water-free dye process.

Yee Chain International, a fabric and rubber foam manufacturer with factories in Taiwan, Vietnam, Indonesia, and China, is also being considered as an investment. The company is looking to innovate in ways that both “lower that cost” and prove“better for the environment,” says Martin Su, sustainability officer at Yee Chain.

“The Good Fashion Fund suits our fundamental goals of being more circular [eliminating waste and reusing resources] in our operations,” says Su.

The five ‘goods’ in sustainable solutions

For Fashion for Good, GFF’s investment in sustainable solutions encompasses “five goods” that apparel manufacturers, in a joint action plan, must agree to meet in order to receive a GFF loan.

This plan makes suggestions for improving their supply chains across these five goods: good materials that are safe and designed for recycling and reuse; a good economy that is circular and benefits everyone; good energy that is renewable and clean; good water that is clean and available to all; and good lives, which ensures safe and dignified living and working conditions for employees.

“If manufacturers fail to implement the action plan during the tenure of their loan, then we have the right to call an ‘event of default’” and havea legal right to a repayment of the outstanding balance, says Bernadette Blom, GFF’s head of investor relations.

Finding like-minded investors and other challenges

The two major investors are Fashion for Good’s founding partner, Laudes Foundation, and Hong Kong-based “techstyle” incubator The Mills Fabrica.

“We decided to become an investor in the Good Fash-ion Fund to drive the adoption of sustainable technologies in manufacturers and their supply chains,” says Alexander Chan, The Mills Fabrica co-director. “This social mission is well aligned with our own vision to create an open innovation platform where innovators, brands, manufacturers, and investors can come together to push the industry forward.”

However, Blom notes, finding “like-minded investors” who are confident in the untested GFF model has been GFF’s greatest challenge. COVID-19 has compounded this challenge.

The global pandemic has destabilized the fashion industry and consequently delayed the fund’s plans with potential manufacturers. A major reason for such delays, Assenberg explains, is that “most manufacturers are focused on getting operations back to normal and prioritizing the welfare of their workers.”

But Assenberg remains optimistic that the action plans will resume later this year, once manufacturers restart production. He attributes his positive outlook to the fact that all the original investors have remained on board, and together they are continuing discussions with their network of manufacturers on long-term sustainability goals.

“The Good Fashion Fund,” he says,“has the patience to work through such situations.

This article was first published here.