Inditex Backs $400M Supplier Decarbonization Fund for Fashion

Inditex, the owner of Zara, has committed $50 million to the Decarbonisation of Textile, Apparel, and Footwear Suppliers (D-TAFS) fund. The IFC is putting in $60 million, and the Global Environment Facility is providing $13.8 million in concessional financing to absorb early losses. The fund targets $250 million, scalable to $400 million, and will issue long-term loans to suppliers for energy efficiency, renewables, water use, and chemical management. Most fashion emissions sit in Scope 3, so supplier-focused financing is a direct way to cut them. D-TAFS aims to support at least 60 borrowers over 10 years, reduce 3 million tonnes of CO2e, and reach 150,000 workers, mostly women. A separate $917,000 technical assistance grant will fund chemical assessments and training at around 100 factories. Blended finance is the key mechanism here. By having the GEF take first losses, the fund lowers perceived risk for development finance institutions and private investors. The model could extend to other supply chains like electronics and food.