1 For more than a decade, Canopy has been driving action to secure large-scale, and just conservation for the world’s climate-critical and biodiversity-rich forests. To begin with, could you help our readers understand the nature and applications of ‘Next-Gen Alternatives’ specifically in India, as well as some of the key interventions that you have been focused on - in India and globally?

Next-Gen Solutions are a game-changing suite of low-impact alternatives that can substitute for the use of high carbon forests in the manufacturing of paper, and textiles. Next Gen transforms agricultural residues, waste textiles, and other low-carbon feedstocks into paper packaging and viscose/lyocell textiles. In India, these innovations can tap into the country’s vast supply of agricultural residues—typically burned and cause of pollution—and significant volumes of textile waste - often landfilled, offering the potential to replace forest-based fibres and save climate and biodiversity-rich forests all over the world. NextGen fibres have 95% to 130% less GHG emissions, 88% to 100% less land-use impacts and 5x lower impact on biodiversity and threatened species. India burns 100 million tonnes of straw annually representing an untapped feedstock to scale Next Gen alternatives, improve air quality, and provide a guaranteed income stream for farmers.

Globally, Canopy has been at the forefront of catalyzing markets for these materials. Through initiatives like CanopyStyle, we’ve collaborated with over 500 global brands to shift viscose sourcing away from forests. Similarly, Pack4Good works with major companies to reduce forest fibre use in packaging. Canopy is working to support industrial and government decision makers in India to leverage the country's agricultural and industrial strengths to create regional hubs for sustainable material production, aligning economic growth and social advancement with environmental preservation.

2 You have stressed upon great potential within India for next-gen alternatives given the presence of large-scale offtakers. Despite this, we see limited traction by way of private investments. What, in your opinion, are the key constraints, and how could they be overcome to mobilize more private capital?

India has enormous potential for Next-Gen Alternatives, with robust agricultural outputs and the presence of global brands seeking sustainable solutions. However, constraints such as insufficient awareness of these innovations, lack of de-risked financing mechanisms, and underdeveloped infrastructure for scaling these technologies currently hinder private investment. As Indian brands become better informed as to how Next Gen can contribute to future-proofing their paper and textile supply while concurrently reducing the amount of agricultural residue burned and blended poly-cotton textiles burned (both of which cause poor air quality) they will be making more commitments to switch to the alternatives. To overcome these current challenges for finance flow, we need:

• De-risking mechanisms: Government-backed guarantees or blended financing structures to incentivize private investors.
• Clear signals from markets: Anchor buyers committing to procurement agreements can provide startups with the stability to scale and give confidence to incumbent producers to grow their production with Next Gen inputs.
• Awareness and education: Outreach to corporates and investors highlighting the economic and environmental benefits of these solutions.

Canopy’s role is to bridge the gap between innovators, investors, brands and producers, fostering collaboration and the ecosystem conditions to build resilient supply chains.

3 Canopy has strongly called out for $15 billion worth of investment in India’s next-generation materials sector, where you have stressed upon the potential within India to transform agricultural residues and polyester-cotton textile waste into viscose, packaging and other materials. What are the kind of early-stage innovations that you see coming up in this space, which could drive both and eco-friendly and economical alternative to textile and packaging? (note from IIC: We understand from investors and startups in India, that innovations in this segment are yet to find a paying customer, at scale. Do you see any startups which demonstrate this potential?)

India is a hotbed of innovation, and several startups are showing promise in Next-Gen material production. These include new lower-impact solutions that convert agricultural residues like sugarcane bagasse or wheat straw into pulp for textiles and packaging, as well as technologies to upcycle polyester-cotton blends into new textiles. Companies like AM Green that just bought Chempolis’s tech, is capable of converting agri-residue into dissolving pulp for textile production as is local start-up Canvaloop. Companies like Craste that makes molded fiber from Rice Straw, Indowed NFC who makes Rice Straw panel board, and UNIDO’s development of low cost improvements in agri-pulp processing in collaboration with Yash Pakka are just a few of the promising local ventures. Licencing of foreign developed technologies or bringing innovators from abroad to build in India are also good options for development of a clean tech pulp for paper and textiles sector.

At this stage of development getting the producers, their value chain and the market synced up can be a challenge. Canopy works to catalyze brand commitments to purchase these materials, creating the market pull needed to give confidence to investors and ensuring that investments happen along the value chain so that feedstock supply and processing capacity grow in concert.

4 In the similar vein, it will help to understand about your Pack4Good initiative and the nature of partners whom you have been engaging with. Do you see the potential of a similar campaign with India-based brands?

Pack4Good is transforming the packaging landscape by engaging with brands - currently 450 strong —including retailers, publishers, fashion and food companies—to reduce forest fibre use in their packaging and shift to recycled or Next-Gen materials. Canopy also hosts the world’s largest compilation of recycled and NextGen paper and packaging options available to brands and companies - the ecopaper database.

India-based brands are well-positioned to build on this success. With an increasing focus on reducing environmental footprints, resilient supply chains, abundant feedstocks and growing consumer demand for sustainability, Pack4Good is ripe for a big impact in India. Flipkart, House of Anita Dongre are already making moves and we’re looking forward to announcing new partnerships soon.

5 As we speak of partnerships, at IIC, we have been observing the increasing role of philanthropic and CSR capital in driving climate tech investments. Borrowing from your experience in other geographies, what are some of the pathways for them to structure or participate in projects which could deploy capital for the production and adoption of next-gen alternatives? (Note from IIC: in case there are any case studies/examples from Canopy’s work that highlights this, please feel free to add it in)

Philanthropic and CSR capital has been important in a parallel field of renewable energy development for de-risking early-stage innovations and bridging the gap to private investment. We have seen this in the form of providing catalytic/first loss capital, forgivable loans, low cost loans and in the form of philanthropies divesting their endowment investments from fossil energy and into renewables.

Philanthropy and CSR funding can also play a pivotal role in co-funding innovation hubs and fostering regional collaboration, laying the groundwork for large-scale adoption and providing support for farmers and the informal textile collection sector to formalize and grow their capabilities as they become the feedstock suppliers to a growing clean-tech pulp sector. CSR monies could also support research into the scaling of alternative purpose grown fibers like Hemp which directly displace the use of softwood timber in paper-making.

6 Canopy’s recently launched report alludes to your increasing focus on India, where you are looking to build the foundation for Next Gen production hubs. We are also witnessing corporate players take larger roles as investors for emerging climate technologies. What are some of the pathways that you are looking to build with Indian Corporate, to drive industrial decarbonisation?

Indian corporates are central to the transition toward industrial decarbonization and stable, low-impact supply chains. Canopy is working to establish partnerships focused on:

• Procurement commitments: Securing sourcing commitments from major Indian brands will form the framework for Canopy to then support companies who are looking to scale Next-Gen material..
• Infrastructure investment: Collaborating on the development of pathways and policy frameworks for local and international investors to flow capital into new production facilities for agricultural residue and textile waste processing, will support existing players in the textile and pulp and paper space to more easily scale.
• Knowledge exchange: Leveraging Canopy’s expertise in other geographies as well as broader brand partners to provide peer-to-peer networking opportunities and share best practices and innovative tech for scale-up and impact.

7 It will also help to understand Canopy's Re-START Alliance in India. What are the focus areas and nature of interventions that you are looking to support, through this alliance, in the near-term?

The Re-START Alliance is about creating a circular and low-carbon economy for India’s textiles and fashion sector. Our focus areas include:

• Building capacity and infrastructure: Establishing facilities to process 1+ million tonnes of textile waste.
• Policy advocacy: Working with government to create enabling regulations for scaling the collection and processing of mechanical and advanced textile-to-textile recycling.
• Market creation: Partnering with brands to secure demand for these materials.
• Connecting investors with opportunities

In the near term, we aim to pilot production hubs that can showcase the scalability and profitability of these solutions. The alliance brings better coordination of efforts to synchronize development of feedstock supply, filling the tech gap, bringing industrial producers and their value chain into the process and anchoring the market.

8 Canopy has been the recipient of philanthropic support, from stakeholders like the The Audacious Project. Going forward, are you looking to raise additional capital for your India-based projects? What are the partnerships that you seek, which could drive catalytic capital?

Yes, Canopy is actively seeking to raise additional philanthropic funding for our India-focused initiatives, which include working to scale Next-Gen material production hubs. We work very hands-on to provide guidance and trouble-shooting support for our brand and producer partners. The scale of the transition requires significant coordination of a diverse set of senior decision-makers in business, government and investment. This requires many partnerships, initiatives, excellent data and strategic thinking at a pace and scale to match the existential crisis that humanity and our earth currently face. India’s vast resources, technical expertise, strategic positioning in global production systems, and vibrant entrepreneurial ecosystem make it a linchpin for the global transition to sustainable materials. Canopy is committed to fostering the collaborations needed to unlock this potential. As part of our work to help catalyze India as an early global production hub of low-carbon materials, Canopy will also work to mobilize the scale of investment that’s required for that infrastructure transition. We estimate that India has the potential to produce 10+ million tonnes of Next Gen packaging, paper and viscose - which will require $13 - 15.6 billion in investment over the next decade.