Canopy calls for $2 billion to advance low-carbon packaging and textiles

Making materials for fashion and packaging from crop and textile waste instead of trees from at-risk forests will require $78 billion globally by 2033, according to Canopy. To step in that direction, the Vancouver nonprofit announced a $2 billion blended-finance model to advance next-gen materials in India.

That nation needs up to $15 billion to shift industries toward adopting waste-based cellulosic materials, according to the initiative. So far the plan has secured $500 million, blending grants and capital. A mix of public and private investors is expected to contribute the rest. Large global brands are involved in the project, which would eventually be replicated internationally.

The Jan. 21 announcement, at the World Economic Forum’s annual meeting in Davos, included the Laudes Foundation of Amsterdam as well as the Singapore-based No.17 Foundation and investment firm Tsao Pao Chee.

Forests can’t supply enough trees to meet the demand across the fashion, packaging and construction industries, a Jan. 15 report by Canopy and Finance Earth warned. A United Nations projection of 14 percent growth in extreme forest fires by 2030 adds to the pressure.

“If companies and investors stay locked into business-as-usual wood sourcing, they are signing up for higher costs, greater supply vulnerability and growing regulatory and reputational risk,” stated Nicole Rycroft, Canopy founder and executive director. “This exposes businesses unnecessarily, given there is a clear exit ramp with next-gen and alternative sources.”

Next-gen materials use 4 metric tons fewer climate emissions than those derived from virgin tree pulp, according to Canopy.

Why India

In India, the initial $2 billion would enable 1.5 megatons of next-gen materials production, reaching $15 billion, to enable 10 million megatons by 2033.

India produces 8 megatons of textile waste each year. “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,” stated Canopy’s Strategic Lead, Global Investments Zoë Caron. In addition, burning crops, such as the stubble from spring wheat harvests and from rice paddies in the fall, kills an average 150 people every day in India.

The $2 billion would be best used to scale up “somewhat mature technologies with the greatest odds of success and a reasonable decarbonization impact,” according to Lux Research Analyst Marcian Lee.

Focus on Canopy

Canopy strives to “unlock” the investments and infrastructure to make forest-friendly, next-generation materials the norm. The nonprofit works with more than 950 brands to shift wood-material supply chains toward sourcing practices that protect biodiversity.

In November, eight brands including Victoria’s Secret and Marc O’Polo joined Canopy programs to commit to stop using material sourced from threatened forests in their paper packaging and textiles.

In fashion, textiles derived from wood are increasingly being made without hurting such forests. One decade ago, no producers of manmade cellulosic fibers (MMCF) were using such practices. By 2025, however, 70 percent were, according to Canopy’s Hot Button report in October.

“It’s hard to overstate the scale and pace of the transformation we’ve seen in the MMCF supply chain in the past nine years,” Canopy’s Rycroft said. Transparency and circularity are mainstreaming for such materials in fashion, and next-generation textiles are starting to be integrated as well, she added.