In a groundbreaking initiative, a consortium of twelve prominent fashion brands has forged a collective virtual power purchase agreement (CVPPA) that heralds a significant step towards meeting their renewable energy demands. This unique collaboration allows these brands to access solar energy generated by Lightsource BP, a renowned clean energy provider, thereby empowering them to reduce their carbon footprint.
Participating brands in this eco-friendly endeavor include esteemed names such as Under Armour, Capri Holdings, Ermenegildo Zegna Group, Farfetch, Ferragamo, Kering, Prada Group, PVH Corp., Ralph Lauren, Tapestry, Bally, and Zimmermann. These brands, united by their membership in The Fashion Pact, a nonprofit organization dedicated to enhancing sustainability within the fashion industry, have taken a pioneering step towards making the industry more environmentally responsible, having been first introduced at the G7 Summit in 2019.
A Solar Milestone and Investment in Spain
Under the terms of this agreement, Lightsource BP will supply 160,000 megawatt-hours (MWh) of clean energy annually for a decade. This clean energy production is equivalent to offsetting the carbon dioxide emissions produced by charging nearly 14 billion smartphones. Eva von Alvensleben, the Executive Director and Secretary General of The Fashion Pact, hailed this milestone as a crucial reduction in Scope 2 emissions and a valuable contribution to the European grid.
This power originates from Lightsource bp's solar projects in Spain, which recently received a substantial investment of 1.2 billion euros ($1.27 billion) to bolster its renewable energy capabilities. Notably, the company has also secured similar agreements with major entities such as resale platform eBay and technology giant Microsoft. Financial specifics of the CVPPA between Lightsource bp and The Fashion Pact have not been disclosed.
Members of The Fashion Pact are committed to achieving 50% renewable energy use in their business operations by 2025, with a long-term goal of reaching 100% by 2030. This pioneering CVPPA sets a strong example for other brands and sectors with lower energy consumption, showcasing the power of collective initiatives in achieving net-zero targets and fostering a more sustainable energy supply mix.
Pioneering a Path to Sustainability and the Future of Collective Agreements
According to Lightsource bp, this collaboration can serve as a model for fashion brands and other industries looking to reduce their carbon footprint. By demonstrating the feasibility of collective power purchase agreements, it empowers companies with lower energy consumption to embrace renewable energy.
The Fashion Pact has no immediate plans to expand the CVPPA to include additional members, as the existing consortium of twelve brands already represents a significant commitment to renewable energy. Nevertheless, The Fashion Pact intends to share the insights and experiences gained from this initiative to encourage similar collective agreements within the industry.
While some Fashion Pact members have not joined this CVPPA, it is for various reasons. Some have already established alternative agreements with renewable energy suppliers. For instance, Hennes & Mauritz (H&M), a significant fashion brand, has chosen not to participate as it has pre-existing commitments to other renewable energy projects.
H&M's Green Energy Initiatives and Lightsource BP's Future Collaborations
H&M, under the leadership of CEO Helena Helmersson, emphasizes its commitment to supporting renewable electricity through power purchase agreements with solar and wind farms. The company has previously signed such agreements with Neoen and Alight for a new solar park in Sweden (90 MWp) and Matrix Renewables. In alignment with its environmental goals, H&M recently issued its first green bond.
Lightsource bp, given its extensive experience in brokering both singular and collective power purchase agreements, is open to future collaborations with other companies seeking to reduce greenhouse gas emissions associated with their electricity supply. With over 60 gigawatts of utility-scale solar projects in progress globally, Lightsource bp is poised to partner with other collectives, corporations, and utilities looking to transition to cleaner energy sources.
The CVPPA, a collaborative achievement years in the making, serves as a testament to the fashion industry's commitment to sustainability. The Fashion Pact, in collaboration with legal experts from Baker McKenzie and consultants from Guidehouse, has demonstrated the complexity and value of such initiatives. Through education and expertise-sharing, it has laid a foundation for more companies to embark on similar green energy journeys.