Canopy outlines details of 2 billion dollar investment blueprint for decarbonization in India

Solutions-driven environmental non-profit Canopy has outlined the finer details of its new 2 billion US dollar finance platform designed to speed up the growth of low-carbon materials and transform the paper, packaging, and textile supply chains.

Said to be the first of its kind, the new initiative, announced at the World Economic Forum in Davos this week, focuses on reducing early project risk and unlocking institutional investment in low-carbon fibre solutions that use agricultural waste and recycled textiles instead of climate-critical forests.

The new finance platform, developed in collaboration with logistics firm Tsao Pao Chee Group and its philanthropic arm, No. 17 Foundation, comes amid concerns about the shortage of wood fiber and as pressures on global forests and wood supply chains intensify. 

Canopy unveils a first-of-its-kind 2 billion dollar finance model to accelerate low-carbon fibers

Bringing together investors, philanthropists, and industry experts, the investment will be used to tap into India’s ongoing adoption of next-generation materials that offer a lower-carbon alternative to wood-dependent products. With a model designed for global replication, part of 2 billion US dollars will be used to support the development of approximately 1.5 million tonnes of next-generation paper, packaging, and textile production capacity in India. 

In line with the wider global ambition to mobilize 78 billion US dollars by 2033 to accelerate the transition to next-generation fibre infrastructure worldwide, supply chain transformation represents one of the most effective tools for meeting global climate and nature targets before 2030, according to Canopy. However, current investment in nature-based solutions comes in at 200 billion US dollars annually, only about one-third of what is required to meet climate, biodiversity, and land restoration goals.

The blended finance model aims to address this gap by channeling capital into India’s rapidly growing next-generation materials sector, supporting the production of low-carbon fibres made from agricultural residues and recycled textiles. Scaling this transition over the next decade is expected to require a total investment of 13 to 15 billion US dollars. 

The initial 2 billion US dollars investment is designed to build market confidence, attract private capital alongside public and catalytic funding, and speed up a pipeline of investable projects, explained Canopy and its partner during an event at Davos. For India, this shift offers significant co-benefits, including stronger industrial competitiveness, reduced raw material volatility, improved air quality, and new income opportunities for rural communities, while positioning producers to meet rising global demand for traceable, lower-impact materials.

“This is the moment to reimagine how capital flows to climate solutions at scale,” said Nicole Rycroft, Founder and Executive Director of Canopy, in a statement. “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.” 

“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.”

Over the coming year, Canopy will look for additional partners willing to provide early investment or commit to future purchasing agreements. With more than 950 brands already engaged, representing over 2.1 trillion US dollars in annual revenue, there is clear market demand to support new production capacity. In addition, Canopy will also refine the platform design and move the model toward implementation in India. 

Air pollution in India caused by crop residue burning is linked to an average of 150 premature deaths each day. Redirecting this agricultural waste could significantly reduce seasonal air pollution in Delhi while creating new income opportunities for rural communities and supporting the modernization of mills. Globally, businesses benefit from more stable supply chains and improved access to compliant, low-impact paper, packaging, and textile materials that reduce reliance on wood fibre.

“With these targeted structures in place, we can drive the investment needed to turn waste into high-value and circular everyday commodities,” added Zoë Caron, Canopy’s Strategic Lead, Global Investments for Canopy. “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.”