Fashion for Good has launched a Price Parity Toolkit, introducing a financing mechanism that removes next-gen material premiums by separating added costs early in the supply chain. The model enables brands to fund suppliers directly at Tier 4, preventing compounded markups and supporting faster adoption of lower-impact materials through clearer money-flow management, legal guidance and structured operational frameworks developed with partner organisations.
- The toolkit uses premium decoupling to prevent cost “pancaking,” allowing brands to cover premiums at Tier 4 and reduce overall product expenses for next-gen materials.
- It includes operational guidance on money-flow management, legal considerations and traceability, providing brands and innovators with a structured implementation pathway for premium decoupling projects.
- The approach aims to reduce friction across early-stage adoption and provide innovators and brands with clearer pathways for applying premium-decoupling mechanisms.
WHO MADE IT POSSIBLE: The Price Parity Toolkit was developed by lead authors from Fashion for Good and supported by secondary authors from Finance Earth, with additional input from partner organisations contributing legal, operational and technical expertise. The initiative continues to evolve with backing from Laudes Foundation and other catalytic supporters working to expand next-gen material adoption across the industry.
- The lead authors are Femke Jonkmans and Azra Cevapovic from Fashion for Good’s Innovation Platform team. The secondary authors are Douglas Hull and Jasmine Yim from Finance Earth, contributing advisory and analytical expertise.
- Corporate partners enabling this work are Adidas, Arvind Limited, Bestseller, Birla Cellulose, C&A, Chanel, Inditex, Levi Strauss & Co., Norrøna, On, Otto Group, Paradise Textiles, PDS Limited, PVH Corp., Ralph Lauren, Reformation, Shahi Exports, Target, Teijin Frontier and Zalando.
- Contributor organisations such as Canopy, Circulose, Textile Genesis, Hogan Lovells and Pereira Tax Consultants provide technical guidance, legal insight and specialised support across toolkit development.
THE PROBLEM: The fashion industry faces a persistent barrier to scaling lower-impact next-gen materials: price. These materials carry inherent premiums due to limited production scale and not-yet-optimised processes, and those premiums become amplified as each supply-chain tier adds further markups. High resulting costs slow adoption, discourage downstream buyers, and prevent the volume growth and scale efficiencies required to reduce prices and support commercial viability.
- Price premiums arise because next-gen materials remain early in development, with small production runs, higher transition costs and processes that have not yet achieved full optimisation.
- Each supply-chain tier adds further markups, compounding initial premiums into disproportionately high final costs not aligned with actual production requirements.
- High end-prices deter brands from adopting next-gen materials, slowing demand, delaying volume growth and reinforcing a cycle that prevents scale-driven cost reductions.
- Without intervention, fragmented demand and compounding markups risk delaying the commercial scaling of lower-impact materials across global fashion supply networks.
TEXTILE GENESIS CASE STUDY: The Price Parity Toolkit highlights the Textile Genesis platform as an example of how traceability underpins premium-linked material programmes. The system tracks certified fibres from origin to retail, producing verified data on movement, volumes and wastage. This transparency enables brands to link invoicing to actual consumption, supporting the financial accountability required when applying next-gen materials through the toolkit’s mechanisms.
- Textile Genesis assigns Fibercoin digital tokens to certified fibres, preventing fraud and supporting recognised ESG and fibre-standard programmes.
- Its Fiber-to-Retail module mirrors physical inventory flows, onboarding suppliers to create digital products that reflect real fibre movements.
- The platform generates verified fibre-volume data for each brand, allowing invoicing based on actual consumption rather than assumptions.
- This structure supports the Price Parity Toolkit by tracking next-gen materials at origin, producing consumption reports and enabling transparent invoicing.
- Brands can upload purchase orders to monitor fibre balances through all tiers, with Textile Genesis offering supplier training and supply-chain mapping where needed.
INSIDE CIRCULOSE’S MODEL: The first proof point of the Price Parity Toolkit comes from Circulose, a textile-to-textile recycling innovator and Fashion for Good alumnus. Circulose has put this model into action through partnerships with brands using the premium-decoupling approach and is shifting to a pricing strategy that positions it as a circularity solution provider while helping reduce friction around large-scale industry adoption for next-gen materials.
- Circulose produces next-generation cellulosic pulp made entirely from recycled textiles and is introducing a new pricing model from 2026 to accelerate broader fashion-industry adoption.
- Brands entering service agreements gain access to conversion planning support, value-chain orchestration, tailored material libraries, pricing tools, supplier networks, traceability solutions and marketing and communications assistance.
- The first key concept decouples part of the price premium from the product during early scale-up, reducing mark-ups and allowing most of the premium to be treated as a strategic brand investment.
- The second is the Circular License Fee, paid directly by brands to Circulose, granting access to Circulose, its associated services and the trademark licence while separating product cost from solution value.
- The third makes the Circular License Fee mandatory from 2026, requiring service agreements and volume targets that shift Circulose use from capsules to mainstream adoption.
