Support in development evaluation of impact financing in textile supply chains

Global apparel supply chains are associated with a number of negative environmental and social impacts. While sustainable solutions to reduce these impacts are already widely known, their implementation is often hampered by limited access to funding. This poses a challenge to small and medium-sized manufacturers in particular. To close this gap, the Good Fashion Fund (GFF) supports investments that aim to drive the implementation of innovative solutions in the textile and ready-made garment industry. As a social impact investor, the Good Fashion Fund's goal goes beyond simply investing and includes supporting investment recipients in the implementation process. It also aims to spread best practice to bring about positive change across the industry. To achieve this, the Good Fashion Fund promotes the introduction of high-impact disruptive technologies and circular innovations in the textile and apparel industry. The first countries to implement the initiative are Bangladesh and India. As these are long-term investments and are about driving processes to engage the economy, the Good Fashion Fund required the establishment of an appropriate monitoring and evaluation framework. The approach was to ensure that the investment strategies reflected developments within a complex system as well as that the fund fulfilled its intended purpose. Such a complex system is usually characterized by a large number of interacting and interdependent factors that are not subject to central control. In such a framework, conventional evaluation approaches have proven to be ineffective. Evolutionary evaluation approaches, on the other hand, support the development of innovations to facilitate adaptation to emergent and dynamic realities in complex environments.

Experts from GlobalCad and adelphi worked with the Good Fashion Fund investment managers and the Fund`s  stakeholders to design, test and operationalize a monitoring and evaluation framework based on the concept of evolutionary evaluation. The tasks of the expert team included finalizing the underlying Theory of Change (TOC), developing indicators and monitoring mechanisms, and guiding the Good Fashion Fund as well as the investment recipients and service providers in the implementation of the fund in the first target countries. Regular feedback loops and reflection sessions were used to refine the TOC approach and adapt the monitoring system to the changing conditions on the ground. To this regard, the experts also reviewed quarterly and annual progress reports by the investees and held discussions with the company representatives on-site.