Sustainability & ComplianceTKT-50A9
Suppliers Press Brands on Three-Gate Financing Test for Climate Capex
Suppliers at Sourcing Journal's Fall Summit demand brands open three financing 'gates' — ROI, capital, and offtake — before factory-level decarbonization can move. Epic Group's $100M Odisha plant anchors the case.
- Cut
- October 10, 2026
- Sew
- 3 min
- Ticket
- TKT-50A9
Construction
Epic Group opened a $100 million Trimetro manufacturing campus in Odisha, India in April, designed for net-zero carbon and water operation.
Sourcing Journal's Fall Summit was held in New York on Sept. 29, with Innovatus founder Naurin Muzaffar and Epic Group EVP Vidhura Ralapanawe as speakers.
The Fashion Producer Collective's Bang for Buck framework evaluates 22 decarbonization initiatives and was developed by Elevate Textiles, Epic Group, and Shahi Exports.
AAFA launched its Heat Stress Toolkit on Sept. 16, with manufacturer-specific guidelines authored by the Fashion Producer Collective.
Epic's Trimetro facility now operates with two anchor customers that differ from the original two anchor brands, a shift Ralapanawe attributed to tariff volatility.
$100 million. That sum underwrites Epic Group's Trimetro manufacturing campus in Odisha, India, opened in April and engineered for net-zero carbon and water operation. At Sourcing Journal's Fall Summit in New York on Sept. 29, the apparel supplier's executive vice president of innovation and sustainability tied that spend to a three-part test other manufacturers say they cannot meet.
The discussion, moderated by Sourcing Journal climate and labor editor Jasmin Malik Chua, exposed a financing gap that executives predict will stall factory-level decarbonization through 2030.
Vidhura Ralapanawe of Epic Group and Naurin Muzaffar, founder and director of consultancy Innovatus, identified the conditions suppliers require before approving capital projects: a return on investment, access to affordable capital, and a binding business commitment from buyers. Muzaffar called the trio sequential gates.
"So unless all three gates are open, the investment and the progress will not take place," she said.
Why do factories reject uniform mandates?
Ralapanawe flagged cost structures that vary by country, factory, and process. Mandating the same emissions cut across a supply base, he argued, would price some manufacturers out. He contrasted sustainability-focused conferences with sourcing forums where climate staff rarely sit.
"Separate conversations cannot produce a shared strategy," he said.
Epic's $100 million Trimetro build cleared the test, Ralapanawe said, because two customers supplied anchor commitments that gave the company stable volume. He noted those two customers differ from the original two anchor brands, citing tariff volatility as the reason buyers reshuffled.
The two functions must stay linked at planning stage, Ralapanawe added. Designing greenfield facilities for net zero from the outset avoids the repeat cost of retrofitting capacity that brands later expand.
What is Bang for Buck?
The Fashion Producer Collective's Bang for Buck framework ranks 22 decarbonization initiatives against factories' own financial and emissions data. Elevate Textiles, Epic Group, and Shahi Exports led development.
Manufacturers use the tool to compare payback periods and CO₂ savings across measures such as electrified processes, renewable power purchase agreements, and water reuse. The collective built Bang for Buck so plants sequence upgrades to their own constraints rather than follow a single industry playbook.
Muzaffar questioned universal prescriptions to phase out coal or electrify production without first testing each facility's grid reliability, load profile, and capital base.
"What may work for me may not work for him," she said.
How does heat stress alter compliance math?
Ralapanawe warned that decarbonization roadmaps may miss science-based 2030 targets if they omit rising energy demand from worker cooling. Epic's Odisha campus was engineered for climate extremes alongside its emissions profile, he said.
The American Apparel & Footwear Association (AAFA) launched its Heat Stress Toolkit on Sept. 16. The Fashion Producer Collective authored the manufacturer-specific guidelines and workbook. AAFA positions the resource as a planning aid, not an audit protocol.
The toolkit asks brands to:
- Co-fund heat-stress measures at supplier sites
- Plan jointly with manufacturers for production disruption
- Provide the financial and business certainty factories need to invest in worker protection
For Muzaffar, the priority is for manufacturers to help draft the standards they will operate under, with room left for differing production processes and resource levels.
What sourcing decision does the conversation force?
Muzaffar rejected the assumption that a business case plus buyer demand automatically unlocks supplier capex. Brands still treat ROI, financing, and offtake as separate problems rather than a single approval test, she said, and that practice must change.
Suppliers now expect sourcing and sustainability teams in the same room before capital projects are signed, Ralapanawe added. The compliance outcome is binding: brands that leave any of the three gates closed push factory-level decarbonization spend into deferral, sliding 2030 Scope 3 reduction targets past deadline.
via Sourcing Journal (Source)
More from Grace Kim
Show full bio
Correspondent covering regulation, policy and their impact on Light industry and softgoods manufacturing at Softgoods Report.
251 articles