Global environmental nonprofit Canopy has joined forces with logistics firm Tsao Pao Chee Group and its philanthropic arm, No. 17 Foundation, to introduce a new finance model designed to accelerate the growth of low-carbon materials for the textile, paper and packaging industries.
Announced today during the World Economic Forum in Davos, Switzerland, the blended finance blueprint convened investors, philanthropists and industry experts to explore the mobilization of a $2 billion investment. The funds would help unlock India’s rapid scale-up of next-gen material as an alternative to high-carbon, wood-dependent products. These alternative materials would be made with waste such as agricultural residues and recycled textiles.
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Though the initial investment program is designed to launch in India, the initiative could be replicated globally. According to Canopy, this initial investment of $2 billion would enable 1.5 million metric tons of next-gen paper, packaging and textile production capacity in India. The investment is part of a worldwide initiative to mobilize $78 billion into the global next-gen infrastructure by 2033.
During the rollout in Davos, Canopy and its partners explained how the first-of-its-kind blended finance blueprint will activate the large-scale production of next-gen fiber while reducing risk for early investors and attracting institutional capital.
“This is the moment to reimagine how capital flows to climate solutions at scale. The blended finance model that we’re unveiling today will lay the foundation for replacing high-carbon forest-fiber in global paper, packaging and textile supply chains, while establishing a finance blueprint that can be replicated in other key markets,” said Nicole Rycroft, founder and executive director of Canopy. “If we want to transform high-impact global commodity sectors at the pace required, we need finance models that share both risk and reward with the market — and that can scale across borders. Investors and brands here today are helping build exactly that.”
Canopy said that shifting global supply chains is one of the most effective means of combating the climate crisis and delivering on environmental goals ahead of 2030 deadlines. The organization said that current finance flows to nature-based solutions are $200 billion, which only accounts for a third of the funds needed to reach climate, biodiversity and lad degradation targets by 2030.
Canopy said this blended finance model is designed to help correct that imbalance by infusing capital into India’s rapidly growing next-gen materials industry. That funding can then enable commercial-scale production of low-carbon fibers made from agricultural waste and recycled textiles. Over the next decade, Canopy estimates scaling this industrial shift in India will cost roughly $13-$15 billion. This initial $2 billion investment program is designed to help establish market confidence in these initiatives and accelerate project pipelines by drawing in private capital and investors.
According to Canopy, this transition to next-gen material production could strengthen industrial competitiveness, reduce input volatility, improve air quality and open new income pathways for rural communities in India. Currently, crop residue burning in India contributes to an average of 150 premature deaths daily, according to Canopy.
“With these targeted structures in place, we can drive the investment needed to turn waste into
high-value and circular everyday commodities,” said Zoë Caron, Canopy’s strategic lead,
global investments. “Many agricultural residues are still being burned on the fields, when we know they can be used more sustainably, cutting air pollution and scaling a sustainable supply chain for paper, packaging and textiles.”
Over the next year, Canopy said it plans to secure partners interested in exploring anchor capital or future off-take agreements as the funding structure is finalized. Canopy currently counts more than 950 brands such as Victoria’s Secret, LVMH, Puma, Stella McCartney and H&M Group among its partners, representing more than $2.1 trillion in annual revenue.
