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Zara owner Inditex commits $50 million to fund low-cost loans for suppliers going green

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Zara owner Inditex commits $50 million to fund low-cost loans for suppliers going green

Zara owner Inditex commits $50 million to fund low-cost loans for suppliers going green

Zara owner Inditex has committed $50 million to an IFC-led fund that aims to raise $400 million to provide low-cost loans to suppliers investing in energy efficiency and cleaner energy. The initiative seeks to help smaller businesses, particularly in developing countries, transition to net-zero operations as the fashion industry faces pressure to reduce emissions.

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Inditex SA is backing a fund set up to grant low-cost loans to suppliers that invest in energy efficiency , as the fashion industry faces pressure to cut its carbon footprint.

In a private-public partnership that chief executive officer Oscar Garcia Maceiras says is the first of its kind, the world's biggest fashion retailer has committed $50 million to the fund, which is led by the International Finance Corporation , the World Bank's private-sector arm. IFC plans to raise $400 million to help small companies transition to net-zero business models.

As much as 8% of global greenhouse gas emissions come from the textile industry, according to United Nations estimates. At the same time, many suppliers are located in developing countries that are particularly vulnerable to weather extremes associated with rising temperatures. Suppliers in such markets need better access to funds to pay for the better machinery and cheaper, renewable energy that they need to adapt.

Emissions are "connected with all of the processes" contained within the fashion industry's supply chain, Garcia Maceiras said in an interview.


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