What Will It Take for Fashion to Cut Greenhouse Gas Emissions? | BoF Professional, News & Analysis

In late August, a group of protestors from climate action group Extinction Rebellion gathered outside Selfridges on London’s Oxford Street, carrying banners with slogans including “fashion is addicted to dirty oil” and “code red for fossil fuel fashion.”

The protest reflects mounting pressure on the industry to address its role in the climate crisis as awareness grows among consumers, policy makers and investors of both fashion’s environmental impact and the need for urgent action.

Selfridges has made prominent commitments to drive more environmentally friendly approaches to fashion, but was singled out for stocking polyester-heavy brands and because its owner, the Weston family, also owns fast-fashion giant Primark, Extinction Rebellion’s Fashion Action group said in a statement.

Selfridges declined to comment. Primark did not respond to BoF’s request for comment.

The protest comes weeks after the world’s top climate scientists issued a stark warning that the planet is heading for catastrophic levels of warming, with deep emissions cuts required in the next 10 years to stave off the worst effects of climate change. Human activity was found to be the “unequivocal” cause of global temperature increases, which are expected to exceed the globally agreed limit of 1.5 degrees Celsius before the middle of this century, according to the report from the UN’s Intergovernmental Panel on Climate Change.

Pinning down fashion’s role in the crisis is tricky, but studies have pegged the industry’s greenhouse gas emissions at between 4 and 10 percent of the global total. In 2018, they amounted to 2.1 billion tonnes of carbon dioxide equivalent, a number that needs to halve by the end of the decade to align with international climate goals, according to a report published last year by McKinsey consultants and Global Fashion Agenda, a sustainability industry forum.

Based on the industry’s current trajectory, they won’t hit the reduction target by 2030, the report found.

Many brands are only just beginning to look at setting substantial emissions targets. Efforts to bring down emissions in the industry so far have largely focused on initiatives like powering corporate headquarters with renewable energy and building stores to be energy efficient. But most of the industry’s impact occurs much deeper in the supply chain.

A recent study of 47 brands’ climate commitments by climate advocacy group Stand.Earth, found only three of the companies in focus, Asics, Mammut and REI, were aiming to slash emissions across their supply chain to a level that aligns with a 1.5-degree pathway.

“Without strong commitments to cut emissions by half in the next decade and switch to renewable energy in the supply chain, not in storefronts and headquarters, these sort of flashy commitments and strategies are nearly meaningless,” said Muhannad Malas, Stand.Earth’s senior climate campaigner.

There are signs the industry is beginning to evolve its approach. The UN Fashion Charter, a coalition of over 100 brands, is working to update the emissions target agreed upon by its signatories to align with a 1.5-degree pathway. Individual brands are also stepping up their ambitions.

But fashion also needs to move beyond target-setting to strategic action. Some potentially impactful initiatives are already underway, but they will need a lot more focus and investment to scale across the industry in a meaningful way.

Go Deep in the Supply Chain

Last year, the Apparel Impact Institute (Aii), a sustainable supply chain initiative, worked with 105 textile facilities across India, Italy, mainland China, Taiwan and Vietnam to cut 78,000 tonnes of greenhouse gas emissions.

We all know there needs to be an investment in energy efficiency [and] renewable energy in the supply chain.

The programme targets one of the most polluting areas of the apparel supply chain, helping mills and dye houses with projects that save both money and energy. Straightforward adjustments to improve energy efficiency like insulating pipes will pay for themselves in the long run, reduce emissions and pave the way for bigger investments in new, electric-powered equipment or renewable energy sources further down the line, the Aii says.

The organisation plans to roll out its programme in 1,000 facilities by 2024, but such initiatives need to scale rapidly across the supply chain to achieve emissions cuts needed within the next decade.

Raw material production and manufacturing remain the dirtiest part of the industry and many mills and dye houses still use inefficient equipment powered by coal, making them “the carbon hotspot of the industry,” said Maxine Bédat, director of sustainable fashion think tank New Standard Institute.

Front the Costs

Efforts to reduce the industry’s emissions will require substantial investment in innovation and cleaner infrastructure. Achieving net-zero emissions by 2050, in line with international climate targets, is likely to cost the fashion industry more than $700 billion, according to early indications from work the Aii has conducted alongside UK bank HSBC and Fashion for Good, a sustainability platform based in Amsterdam, for an upcoming report on the subject. Around $300 billion of that will need to be spent on phasing out coal-fired power and introducing renewable energy, their research suggests.

Until now, brands have largely left suppliers to shoulder the cost of reducing their environmental impact, but transforming the industry will require a more collaborative approach.

“One of the massive elephants in the room is that we all know there needs to be an investment in energy efficiency [and] renewable energy in the supply chain,” said Michael Sadowski, an independent sustainability consultant. “Generally speaking, brands have not stepped up to say ‘We will co-invest with you,’ or ‘We will commit to paying more for your products.’”

Established mechanisms for financing sustainable change already exist but will require fashion companies to deepen their commitment to suppliers.

There’s a limit to what [brands] can do without policymakers.

For instance, brands can use their credit ratings to secure better loans to help finance long-term renewable energy contracts for suppliers. Similarly, the World Bank’s International Finance Corporation (IFC) has country-specific financing programmes in Bangladesh and Vietnam, as well as broader supplier financing programmes that offer lower loan rates to manufacturers that have invested in cleaner production and energy efficiency.

Advocate for Carbon-Free Policies

In many manufacturing countries, fossil fuels are the cheapest (or only) source of energy available. But brands can leverage their buying power and influence to support campaigns for policies that end subsidies for fossil fuels and create better incentives for renewable power.

“There’s a limit to what [brands] can do without policymakers,” said Laila Petrie, chief executive of sustainability consultancy 2050. Brands should recognise “their role to advocate for change.”

Some companies are already engaging in key manufacturing hubs. Apparel giants including Puma and H&M Group wrote an open letter to the Cambodian government in August 2020 warning that plans to open new coal-based power plants made the Southeast Asian country a less attractive source for manufacturing. Authorities in Vietnam received a groundswell of encouragement from a consortium of 29 brands including H&M Group, PVH and Nike in December last year to make it easier for companies to directly purchase renewable energy from suppliers.

Find New Ways to Grow

The industry has begun to test the waters to decouple financial performance from growing emissions with new business models like resale and rental. These generate revenue without relying on new production. But much swifter change is needed to have any environmental impact, said Petrie.

“What we need to start to do is look at substitution, so we need to see people pivoting across to demonstrated lower-impact approaches, whether that’s conventional production done better or whether it’s these new business models,” she said. “We need to have solutions now that we start to urgently support, fund and scale in order to make sure that in five years time, we’ve actually done something.”

Related Articles:

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Fashion’s Untapped Opportunity to Fight Climate Change

The Climate Fix: Addressing Fashion’s Emissions Problem

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