According to the Planet Tracker research titled “Follow the Money Thread,” significant investors need to work more to develop a fair and sustainable textile and apparel sector throughout the whole supply chain.
According to the findings of the study, the downstream end of the textile supply chain is the primary target of financing from large investors operating in developed markets, with a substantial presence in the United States.
According to the findings of the analysis by Planet Tracker, just four big asset managers in the United States account for more than 20% of the total market capitalization of equity holders for garment manufacturing. These asset managers are BlackRock, Vanguard, Fidelity, and State Street.
In contrast, institutional investors have a share in the upstream components of the textile value chain that is less than a quarter (for raw material manufacturing) and a sixth (for fibre production and fabric manufacture). Instead, the majority of equity owners at these early levels of the supply chain are holding firms and bigger conglomerates.
As a consequence of this, the analysis by Planet Tracker underscores the fact that brands and investors in affluent nations are insulated from the environmental repercussions that take place farther upstream in the supply chain.
According to Richard Wielechowski, a senior investment analyst at Planet Tracker specializing in the textiles industry, “We find investors operating in the countries where the majority of textiles are consumed are often shielded from the negative environmental impacts that take place before clothing reaches stores.” However, these investors have the ability to change the attitude of corporations and propel the textile sector towards being more environmentally friendly.
