Fashion & Finance: Funding The Change

With the fashion industry's pollution levels second only to those of the oil industry it is clear change is necessary[1]. The current industry model of fast fashion is inherently unsustainable with the norms of constantly rotating styles that quickly make clothes 'out of fashion'[2]. This fast fashion model is the cause of unimaginable damage to people and planet.

The industry is now a race to the bottom where optimising costs and efficiency in order to operate on narrow margins is a priority[3]. In order to undercut competition’s prices the race leads to the use of cheap, unsustainable materials, exploited garment workers, unsafe working conditions; and a devastating environmental impact caused by factors such as the use of pesticides and textile waste.

The fashion industry is late to the sustainability scene and has brought its fair share of unethical baggage, from greenwashing to a lack of transparency in never-ending supply chains. But the industry cannot make significant (or disruptive) change alone. It needs help from the public and private sector.

Crucially, the Financial Services industry needs to recognise the opportunities they stand to gain in through fashion. According to Fashion for Good and BCG, the Fashion industry requires $20-30bn of financing per year to develop and commercialise disruptive solutions and business models that will move the industry towards sustainability3. It is clear there is a huge financing gap, but the good news is that many viable solutions already exist, with Fashion for Good identifying 1,500 viable innovators within their first two years of operating3. The issue is there is a lack of capital to grow these innovations on a disruptive scale.

So, what can the financial sector do to help?

  • Venture Capitalists are being called upon to support, and fund, up and coming innovations within the fashion industry. Due to the technicalities of some innovative projects, particularly those aiming for hard-tech innovations (physical innovations such as the development of a new sustainable material) this is sadly not enough. Brands such as H&M and Patagonia are also investing in early stage hard-tech innovations through Corporate Venture Capital (CVC) investments3. But other fashion companies need to follow suit, and fast, as funding directly from the fashion companies contributes a limited source of capital to sustainable innovators in fashion.
  • Specialised funds have also emerged over the past few years to overcome limited experience and expertise preventing investors in pursuing sustainable fashion innovation. Funds such as the Textile Innovation Fund and the Good Fashion Fund provide the means to support 3D printing, chemical recycling and plant-based fibres.
  • Blended capital can act as an avenue to reduce the financing gap in fashion. However, public and private collaboration is required to create disruptive change. The Good Fashion Fund already follows this model using private and philanthropic capital from the C&A Foundation.
  • Growth capital and private equity investors can invest in growing start-up fashion brands that have big consumer draw and e-commerce distribution. For example in July 2019, Permira announced that it had acquired a majority stake in the ethical fashion brand Reformation.
  • Sustainably Linked Loans (SLLs) can provide general corporate financing tied to sustainability KPIs and are another option for the financial sector to help change fashion for the better. The market for SLLs rose from $5 billion in 2017 to $40 billion in 20183. In November 2019, Prada became the first fashion company to sign a five year €50 million SLL, with Crédit Agricole Group, under the condition that Prada could pay a reduced interest rate if it achieves various targets related to its sustainability.

These are just a few of the options the financial sector has when it comes to funding the change for fashion.  But should the financial sector simply stop investing in fast fashion companies? And is there really a lack of finance within this $3 trillion market that accounts for 2% of global GDP?

The answers to these questions will demand urgent attention in the lead up to COP26 in Glasgow, as the fashion industry covers nearly every UN Sustainable Development Goal in some shape or form. There is no denying that the fashion industry is massive and damaging, but it also presents an opportunity for change. However, in order to make the change the fashion industry is going to need help, and the financial sector has an opportunity and responsibility to do so.

References

[1] Suraci, O. (2021) ‘The Best-Dressed Polluter - Regulation and Sustainability in the Fashion Industry’, Hastings Environmental Law Journal, 27(2), pp. 225–242. Available at: https://search.ebscohost.com/login.aspx?direct=true&AuthType=shib&db=edshol&AN=edshol.hein.journals.haswnw27.21&site=eds-live

[2] Sara Greco, Barbara De Cock, Argumentative misalignments in the controversy surrounding fashion sustainability, Journal of Pragmatics, Volume 174, 2021, Pages 55-67, ISSN 0378-2166, https://doi.org/10.1016/j.pragma.2020.12.019.

[3] Financing the Transformation in the Fashion Industry (Jan, 2020) & Investing in Textile Innovation Report (Oct 2019): https://fashionforgood.com/news/resource-library/


Sustainable Finance Qualifications - From Complete Beginners to Seasoned Professionals

The sustainable finance movement is rapidly growing, with a 55% predicted growth in 2021. Therefore, people at every career stage need to get involved. There has been a gap in qualifications to improve and enhance people’s knowledge of sustainable finance, but finally we are seeing qualifications emerging. There are qualifications available for people in varying stages of their careers.

Click to navigate to the relevant section:

Qualifications and Career Options for University Graduates in Sustainable Finance

Course NameLocationCost/PayLengthEntry CriteriaOverviewFurther Information
EY Sustainable Finance Graduate ProgrammeUK
  • Salaries start from £27,900 per year in regional based roles.
  • Salaries start from £31,750 per year for London only.
2 year programme
  • Working towards honours degree in Mathematics, Statistics, Economics, Finance, Business, Sustainable Development, Physical Geography or similar.
  • A master’s degree in subjects such as Environmental Economics, Sustainable Finance, Sustainable Development and Climate Change would be highly desirable, but is not essential.
  • Minimum of grade 4/C GCSE (or equivalent) in English Language and Maths, and three A-levels/Five Highers (or equivalent) to be eligible to apply.
  • Help organisations implement sustainability practises to deliver long term rewards and value.
  • Support in achieving a professional qualification in Financial Services, even when the qualification exceeds the 2 year programme length.
  • Work on market leading projects, build networks, and consult on key strategic problems facing the sustainable finance world.
To register interest to 2022 application openings and find more information click here.

 

 

MSc Climate, Management and FinanceImperial College London 

Cost: £30,700

 

One year course starting September 2021.
  • Undergraduate degree at First of 2:1 Honours (or equivalent).
  • An understanding of the industry you intend to work in. This is measured through career planning questions, internships and work experience.
  • Strong English language skills.
  • More details can be found here.
  • Learn how to put the most up to date academic findings, business and climate change strategies into practise.
  • Gives graduates interdisciplinary skills relating to issues of climate change and sustainability in businesses today.

Students will:

  • Learn about the challenges and opportunities change presents to companies.
  • Learn how innovation is crucial in organisations when dealing with climate change.
  • Develop an in-depth understanding of science, policies and technologies linked to climate change.
To apply and find out more information click here.
MSc Climate Change Finance and InvestmentUniversity of EdinburghCost:

  • Home students: £20,900
  • International students: £24,000

 

1 Academic Year: September 2021 to August 2022
  • UK first-class or 2:1 undergraduate honours degree in business, economics, engineering, or a social or physical science.
  • Relevant work experience is not required but desirable.
  • Preference given to those with grades above minimum requirements.
  • Strong English language skills.
  • More details can be found here.
  • Dedicated to developing professionals in the field of low carbon finance and investment.
  • Develop understanding of how the challenges of climate change are driving investment opportunities in a huge range of sectors.
To apply and find out more information click here.
MSc in Sustainability, Enterprise and the EnvironmentSmith School of Enterprise & the Environment at the University of OxfordCost:

  • Home students: £19,200
  • International students: £25,900

 

New 12 month course launching in October 2021.
  • First-class or strong upper second-class undergraduate degree with Honours in any discipline (achieved or predicted).
  • Demonstrate an interest in sustainable development and net zero, and intersections with enterprise.
  • Strong English language skills.
  • More details can be found here.
The course addresses two prevalent and unmet challenges of today’s climate:

  1. Making the transition to a zero-carbon and environmentally sustainable economic model.
  2. Improving the quality of life for the world’s least advantaged people.
To apply and find out more information click here.

Qualifications for Professionals in Sustainable Finance

Course NameLocationCostLengthEntry CriteriaOverviewFurther Information
Chartered Banker Institute Green & Sustainable Finance CertificateOnline£595 (including £30 annual subscription fee)
  • 12 unit programme that can be completed in as little as 12 weeks.
  • Registration lasts for 1 year so can complete at own pace.
  • Aimed at financial services professionals globally who are keen to develop their green and sustainable finance expertise.
  • Covers bankers, insurers, investment managers, central bankers and regulators, risk managers, analysts and consultants.
  • No entry requirements and no prior knowledge of the sustainable finance sector is expected.
  • The qualification will help individuals develop their understanding of green and sustainable finance principles, and allow them to implement these principles into practise within their work roles.
To apply and find out more information click here.

 

 

Climate Change Risk in FinanceUniversity of Edinburgh Business School (Online)£1500
  • 10 Week Course
Aimed at financial services and fintech professionals who are:

  • Interested in developing their knowledge of sustainable finance.
  • Want to learn the latest from academics and practitioners.
  • New to sustainable finance.
  • Tasked with developing new products and services.
  • Responsible for leading change.
  • Focuses on the consequences of climate change of finance.
  • Programme hopes to be a catalyst for change.
  • Learn about emerging theories and practises of sustainable finance and climate-related financial risks.
  • Understand the basics of climate change.
To register and find out more information click here.
Sustainable Finance Foundation CourseSmith School of Enterprise & the Environment at the University of Oxford
  • £5,000 for attendees from the private sector
  • £3,750 for attendees from the public sector and civil society.
  • 5 day residential workshop at the University of Oxford.
  • 6 month supported Capstone Project after the residential.
Applicants must show their suitability to the course in terms of:

  • The relevance of the course to their occupation and organisation.
  • Their experience and potential, particularly in areas related to course content.
  • Their initial objectives for learning and their intentions for their capstone project.
  • Provides an introduction to sustainable finance for professionals working in a variety of sectors.
  • Participants will engage critically with systems and theories in sustainable finance and investment.
  • After the 5 day residential, participants are supported on a 6 month Capstone Project, which is related to finance and sustainability.
To apply and find out more information click here.
CFA UK Level 4 Certificate in ESG Investing

 

Online£485 per candidate
  • The qualification takes 130 hours to complete.
  • This can be done at your own pace, as you decide when to take the final exam.
  • Exam is 2 hours 20 mins long.
  • No formal entry requirements.
  • Strongly recommended that candidates have a strong grounding in the investment process achieved from experience or formal education.
  • Designed for practitioners working in investment roles.
  • Delivers benchmark knowledge and skills necessary for investment professionals to integrate ESG into practise.
  • Expand your ESG knowledge and stay ahead in your field.
  • Successful completion can lead to the CFA UK Level 4 Diploma in Investment Management (ESG) for existing Level 5 IMC holders.
To register and find out more information click here.
Climate-Related Financial Risk CourseSmith School of Enterprise & the Environment at the University of Oxford
  • £3,750 for attendees from the private sector.
  • £2,625 for attendees from the public sector and civil society.
  • 3 day residential workshop at the University of Oxford.
Applicants must show their suitability to the course in terms of:

  • The relevance of the course to their occupation and organisation.
  • Their experience and potential, particularly in areas related to course content.
  • Applications will be reviewed and places awarded on an ongoing basis.
  • Explore emerging theories and practice of climate-related financial risks.
  • Develop understanding of how to critically analyse the key aspects and developments in climate-risks.
  • Ideal preparation for current and emerging professional examinations in sustainable finance and related areas.
To apply and find out more information click here.
ESG & Sustainable Investing Training CourseVirtual Training Course by ESG Investing£1990 + VAT
  • 12 hours.
  • 14th – 25th June 2021.
Should be attended by:

  • Investment managers, wealth managers and private banks, private equity firms, hedge funds, analysts, investment banks, pension funds, relationship and account managers.

 

  • Examines all areas of Environmental, Social, and Governance (ESG) investing.
  • Explores how ESG information can be integrated into the investment process efficiently.
  • Learn about impact ESG ratings and stock prices.

 

To register and find out more information click here.

Accessible Qualifications for anyone interested in Sustainable Finance

Course NameLocationCostLengthEntry CriteriaOverviewFurther Information
Short Course in Sustainable FinanceUniversity of Cambridge (Online)£2,200
  • 8 weeks (excluding orientation)
  • 6-8 hours per week
  • Self-paced online learning

 

  • For anyone interesting in exploring the implementation of sustainable finance at both a micro and macro level, from aspiring professionals to NGOs.
  • Gives you tools to address and take advantage of changes to the commercial environment caused by global sustainability challenges.
  • Learn how the financial system can be changed to create better value for society and organisations.
  • Learn about financial success through sustainable approaches and initiatives such as ESG, impact investing, and positive screening.
To register and find out more information click here.