Inditex Backs $400 Million Fund to Cut Fashion Supply Chain Emissions

Inditex, the parent company of Zara, has committed $50 million to a new climate finance fund aimed at helping textile suppliers reduce their carbon emissions through affordable loans for sustainable investments. Led by the International Finance Corporation (IFC), the World Bank’s private-sector arm, the fund aims to raise $400 million to support small and medium-sized businesses in transitioning towards net-zero operations. The initiative is being described as a first-of-its-kind public-private partnership in the fashion industry.

The fund will provide low-cost financing to textile manufacturers and energy companies to invest in renewable energy, energy-efficient machinery, improved water management and reduced chemical consumption. Eligible suppliers will also receive free technical guidance to help implement sustainable practices. Other investors include the Global Environment Facility, Apparel Impact Institute, Dutch development bank FMO, French development financier Proparco and British International Investment. The fund’s initial fundraising target is $225 million, with additional rounds planned to reach its overall goal.

Inditex CEO Óscar García Maceiras said the initiative aims to encourage collective industry action, as suppliers often serve multiple fashion retailers. The company is targeting a reduction of up to 53% in its total emissions by 2030 and reported an 11% reduction by the end of 2025. The initiative comes amid growing global pressure on the textile industry, which accounts for an estimated 8% of worldwide greenhouse gas emissions, to accelerate its transition towards environmentally sustainable production.

Inditex Backs $400M Green Fund