Read our new report: Unlocking Equity in Innovation: Balancing the Scales in Supply chain Partnerships
Balancing the Scales in Supply Chain Partnerships
CLIMATE INNOVATION IS FASHION'S FUTURE – BUT ONLY IF THE INDUSTRY LEARNS TO SHARE RISK.
Climate solutions find themselves at a crossroads. Never has there been a more compelling case for innovative materials, dyes and processes to enable the industry to meet fast-approaching environmental targets. And yet, misaligned expectations, unequal risk-sharing, and inconsistent brand commitment is stalling the industry’s transition to innovative climate solutions. This report outlines the barriers and the opportunities for innovation to not only survive these pressures, but to scale in ways that drive equitable, industry-wide transformation.
Our findings draw on in-depth interviews with key stakeholders representing global manufacturers, innovation startups, fiber producers, technology providers, brands and retailers, investors, consultants, multi-stakeholder initiatives, and NGOs.
Innovation pathways originate from in-house supplier developments as well as startups
Climate-related innovation in fashion comes from within and outside of the supply chain. In addition to climate innovation start ups, suppliers are innovators in their own right. The suppliers interviewed for this report shared details of their company’s internal R&D departments, many of which reinvest millions of dollars annually into resourcing experts and developing climate-related solutions to offer to brands and retailers.
This report explores the stakeholder dynamics that underpin this critical, yet complex, innovation landscape.
Supplier equity is key to successful, scalable innovation. Identifying three fundamental barriers to progress: misaligned expectations, uneven risk distribution, and inconsistent brand commitment, the report highlights important opportunities for suppliers, brands, investors and innovation start ups to leverage for more equitable innovation partnerships, supported by a series of readiness checklists to facilitate these relationships.
Learn how to overcome these challenges through radical structural change to drive meaningful innovation adoption.
LISTEN TO THE FINDINGS
5 minutes
Quick Summary
32 minutes
Debrief
50 minutes
Debrief
3 KEY CHALLENGES SHAPING THE INNOVATION ECOSYSTEM
We have identified three fundamental barriers to scaling sustainable solutions, the opportunities to overcome these challenges, and case studies on industry initiatives exploring a new way forward for fashion.
1.
Misaligned Expectations: Innovation stalls when stakeholders don’t speak the same language
A fundamental barrier to scaling innovation is the inherent misalignment of priorities, expectations, and knowledge between stakeholder groups. Through our interviews with experts across the supply chain, misalignment has been a consistent thread causing roadblocks for innovators, brands and retailers, investors, and suppliers alike. From expectations of cost neutrality at the top of the cost curve to testing and sampling being provided for free, this misalignment places pressure on an already fragile landscape.
CALLS TO ACTION:
CLOSE THE KNOWLEDGE GAPS
Bring top decision makers to the table. Support for future-focused investments in climate innovation requires brand owners and board members to align on internal commitments to reduce the friction between commercial and sustainability mandates.
Get on a plane and meet your supply chain. Those working in brands, retailers and startups stand to benefit from absorbing the complexities of implementation that come from face-to-face engagement.
Provide open source information to galvanize industry alignment, build transparency and enable standardization across the innovation ecosystem.
2.
Undervalued Suppliers, Unequal Partnerships: Suppliers are not considered core value creators
Despite conducting considerable R&D, co-financing pilots, and turning concepts into commercial reality, suppliers are often undervalued and undercompensated for their contributions. Innovation startups and brands can often expect suppliers to absorb the financial and operational risks of testing new technologies on a speculative basis without assurance of orders or long-term commitments.
CALLS TO ACTION:
CELEBRATE AND INCENTIVIZE SUPPLIERS
Include suppliers in pricing and design & development discussions to understand the true cost and practicalities of implementing novel solutions throughout the supply chain. For the best chance of success, partnerships should start with suppliers.
Name and celebrate your suppliers to acknowledge their critical partnership role.
Incentivize suppliers to partner with startups
through brand and retailer offtake agreements.
3.
Insufficient Brand Commitment: Suppliers and investors can’t move until brands signal demand.
Brands – in spite of their influence and power – hesitate to make early, multi-year commitments to new solutions that give suppliers and investors confidence to move forward. True progress depends on brands using their power responsibly, backing rhetoric with action, binding agreements, and consistent long-term partnership.
CALLS TO ACTION:
ACCEPT AND EMBRACE
SYSTEMS CHANGE
Sustainability credentials are not enough to move the needle on adoption — innovators need to demonstrate a strong business case - a shared opportunity for all stakeholders to develop.
Brands and retailers should look at the various financial levers that can be pulled to absorb and offset unavoidable premiums
Suppliers as well as brands and retailers need to embrace pre-competitive collaboration to drive alignment and adoption at scale.
Innovations or trials can't happen in silos. It has to happen in a shared responsibility environment. When the supplier and brand is on board and everyone is an equal contributor or shareholder, I've noticed it has been more successful.”
– Sustainability Lead, Manufacturer
Understanding each stakeholder’s drivers, risks and expectations is key to equitable, scalable innovation. We have developed three readiness checklists for this purpose.
In this report:
Fundamental knowledge gaps exist between collaborators… early-stage innovators lack access to or familiarity with fashion supply chains, investors can be unfamiliar with the nuances of the fashion industry, and suppliers are often excluded from conversations that directly impact their work.
JOIN THE LAUNCH WEBINAR ON JANUARY 27TH, 2026
Change starts with conversation. Join our live webinar as we launch Unlocking Equity in Innovation and discuss what a fair innovation ecosystem looks like.
Megan Doyle
Report Author &
Sustainable Fashion Journalist
Tricia Carey
CCO at Avalo and
Transformers Board Member
Priyanka Khanna
Innovation Director - Scaling,
Fashion for Good
Saqib Shahzad
Head of Sustainability,
Diamond Fabrics Ltd by Sapphire
Melinda Tually
Intelligence Director,
Transformers Foundation
We need to agree on who it is that will take that risk and who can afford it.. Risk is difficult to put on any one player singularly, it has to be put on the industry collectively instead.
– Investor