Good Fashion Fund validates impact of investment in Indian Tier 2 & 3 textile factories

Published: August 4, 2025

The Good Fashion Fund (managed by FOUNT) invested USD 2.5 million in 2023 in Sri Kannapiran Mills (India) to replace and modernize outdated equipment in two spinning mills and a denim weaving unit.

After on-site monitoring in Q1 and Q2 2025, supported by independent advisors (including Bureau Veritas, Fair Wear Foundation, GlobalCAD and adelphi), the results confirm substantial improvements that exceed the minimum targeted environmental savings for financed equipment.

The financing enabled the installation of new rotor spinning machines, auto-doffers, an auto-blender, and high-speed winding machines; in the weaving mill the singeing machine was upgraded and additional air-jet looms and a cone winding machine were installed.

The company’s energy mix shifted towards renewables: around 58% solar and 21% wind (with reduced reliance on natural gas), compared to 2023.

Results (2024): up to 59% lower energy use on key machines (~886,000 kWh per year), up to 95% less cotton waste (~4,756 kg per year), and an estimated ~1,272 tons of CO₂ reduction. Financially, this translates to ~USD 140,000 annual energy savings and ~USD 115,000 per year from more efficient weaving output; monthly fabric production increased to ~220,000 meters.

Socially, safety and working conditions improved through automation (e.g., doffing), better data monitoring and strengthened grievance and H&S mechanisms.

GFF also published a detailed case study highlighting the results, expenditures, and lessons for Tier-2/3 factories, which can serve as a model for other SMEs in the textile supply chain.