Overview
The Good Fashion Fund 2.0 (GFF2) is envisioned as a USD 60 million impact investment fund that provides mezzanine financing to emerging market textile and apparel suppliers —particularly in India, Bangladesh, and Vietnam—to facilitate their adoption of renewable and energy-efficient technologies. The vehicle also includes a USD 1.5 million TA Facility to support investees in incorporating environmental and social best practices into their operations, achieving regulatory compliance, and maximizing the impact of their green energy investments.
Problem
The textile and apparel industry contributes up to 3.5% of global carbon emissions annually, up to 80% originating from supply chains concentrated in Asia. In countries like Bangladesh, India, and Vietnam, SME manufacturers have limited access to affordable long-term capital and insufficient technical capacity for decarbonization. The estimated funding gap is USD 20–30 billion annually, but traditional debt is often expensive, short-term, and inflexible, and grants and bonds are inaccessible to smaller, less formal manufacturers. This creates a structural financing barrier that undermines the energy transition and social equity in a sector critical to millions of livelihoods.
Solution
Partnering with sustainable apparel brands and their suppliers—primarily in India, Bangladesh, and Vietnam—GFF2 will provide non-dilutive risk capital (mezzanine financing), corporate-level engagement, and technical assistance aimed at accelerating decarbonization, renewable energy adoption, and social equity. Building on the track record of Good Fashion Fund 1—which successfully deployed six investments in South Asia, GFF2 will apply both climate and gender lenses to all investments, support long-term brand-supplier relationships through offtake agreements, and promote fair labor conditions, including improvements in living wages. GFF2 aims to mobilize private capital and positions itself as a model for sustainability-led transformation across the global textile and apparel supply chain.
CC Facility Support
The CC Facility’s funding is critical to advancing GFF2 from concept to launch, enabling it to address systemic challenges in the textile industry through an innovative blended finance approach. The CC Facility will provide essential support for finalizing legal and regulatory structuring, new market entry analysis, development of impact frameworks, and gender strategy. Additionally, the CC Facility will support strategy refinement for GFF2’s Technical Assistance facility.
Website
Good Fashion Fund - https://goodfashionfund.com/
