Ruth MacGilp, Fashion Campaign Manager
Hidden in corporate sustainability reports, beyond the “ambitious” net zero goals and cherry-picked case studies of circularity, diversity, and worker empowerment, you can often find a list of multi-stakeholder initiatives that companies are part of. From trade associations and lobbying groups to certification schemes and collaborative projects, companies tout membership in external organizations to boost their climate kudos.
However, these groups’ activities don’t always align with the companies’ own sustainability claims, highlighting a do-say gap that threatens the credibility of corporate climate commitments.
Major misalignment in climate policy engagement
While individual companies may tout their own sustainability efforts, many are simultaneously involved in industry lobbying groups to obstruct or slow progress, especially on corporate environmental regulation. In fact, analysis from InfluenceMap found 58% of 300 companies to be unsupportive of policies to deliver the Paris Agreement, including through membership of industry associations, despite having their own net zero targets.
Meanwhile, analysis from Planet Tracker identified 17 companies in the chemicals and consumer goods sectors to be members of industry associations in the US and Germany whose activities are misaligned with the Paris Agreement. As a result, the report urges companies to assess their affiliations with industry associations that diverge from their environmental targets and claims, following clear guidance on transparency and accountability from The B Team, Beyer, and the UN’s Integrity Matters report.
Beyond industry associations, other voluntary initiatives are impaired by tensions between climate goals and corporate interests. For example, NewClimate Institute’s 2024 Corporate Climate Responsibility Monitor found that over-reliance on voluntary initiatives, such as SBTi (Science Based Targets Initiative) and UNFCCC’s Race to Zero initiative, leads to insufficient corporate climate action. “These pioneering initiatives were formed, at a time when corporate climate action was in its early stages. As we have now reached a stage where most of the largest and most influential multinational corporations regularly announce targets and strategies to reduce emissions, the model of voluntary mobilization may have outgrown its original purpose.” Instead, we must shift to formal accountability measures, including regulation, accredited verification and validation entities, and effective advocacy and litigation. Further analysis of the drawbacks of the current overreliance on voluntary initiatives can be explored in the Corporate Climate Accountability Loop report.
Case study on fashion industry associations
As the US and the EU increase environmental regulations for the fashion industry, fashion brands are increasingly using industry associations to push back.
In the US, according to Business of Fashion, the fashion industry spent almost $28 million lobbying on US policy in 2022, which doubled in the past 10 years. With various new and proposed laws impacting fashion, companies are lobbying under the guise of industry groups like the American Apparel and Footwear Association (AAFA), the National Retail Federation (NRF), and the Council of Fashion Designers of America (CFDA). For example, a collective of US fashion industry associations recently published the THREADS Protocol which calls for “realistic timelines for enforcement and a science-based approach to policy setting”.
In the EU, pushback on regulation has similar undertones, with industry associations not outright rejecting corporate accountability policies but instead, calling for ‘harmonization’ of policies to simplify compliance. For example, according to GlobalData, the Federation of the European Sporting Goods Industry (FESGI) has advocated for the removal of ‘excessive red tape’ and more time to adapt to new laws without incurring excessive costs. These efforts to slow down potentially game-changing policies may contrast with members’ own stated values, such as Lululemon, a member of FESGI, which claims to be ‘a catalyst for scalable solutions, participating in and helping to lead policy advancement.’
It is also important to pay attention to companies’ involvement in multi-stakeholder initiatives, certification schemes and voluntary membership organizations. Again taking Lululemon as an example, the brand cites participation in voluntary initiatives such as the Textile Exchange, RE100, Sustainable Apparel Coalition, UN Fashion Industry Charter for Climate Action, Apparel Impact Institute and more. On the surface, external engagement and collaboration are essential parts of any brand’s sustainability strategy and should be celebrated. However, without transparency on how participation in these initiatives impacts Luluemon’s own supply chain and business practices, it is difficult to judge their contribution to meeting climate targets.
Overall, there is a considerable danger of companies hiding behind membership in external organizations, including industry associations, multi-stakeholder initiatives and certification schemes without developing and disclosing their own credible strategies for climate action. As most industry organizations are funded by company membership fees (some more than $1 million USD per year), there are concerns about conflicts of interest as well as companies ‘marking their own homework’, according to the Changing Markets Foundation’s License to Greenwash report. The report found that the majority of voluntary initiatives in the fashion industry have compromised independence and accountability, and are vulnerable to high levels of influence through the brands that fund the schemes.
These organizations also lack transparency on progress towards stated objectives, as well as disclosure of brands losing certifications for non-compliance. I explored this issue in relation to the UN Fashion Charter last year in Vogue Business, explaining that brands are often celebrated for pledging ambitious commitments, but face no accountability or consequences if they fall short of achieving them. Similarly, in another recent Vogue Business article, certification schemes are accused of being ‘an illusion of progress rather than a mechanism to encourage and accelerate change’ in part because they are often ‘incentivised to grow their membership and revenue more than to drive impact’.
Closing the do-say gap on corporate climate action
Of course, active corporate engagement in climate policy development is encouraged, and there are positive examples to be found in the fashion industry, such as Patagonia supporting the Climate Corporate Data Accountability Act, and H&M advocating to strengthen the EU’s Renewable Energy and Energy Efficiency Directives.
While companies should support progressive policy in their home countries, such as through corporate due diligence, transparency, and reporting legislation, it is also crucial to use their influence in the countries they source from in order to address barriers to the green transition, such as by advocating for PPAs (power purchase agreements). For example, PUMA reports having met with policymakers from Bangladesh, Indonesia, and Vietnam during COP28 to promote further expansion of renewable energy capacity.
Overall, industry associations should help accelerate their members’ climate policy advocacy efforts, not hinder them. Industry associations can also bring about constructive collaborations between brands, particularly those who share the same suppliers. For example, the European Outdoor Group has brought members together to share the costs of addressing supply chain emissions through its Carbon Reduction Project.
However, if we want to tackle the skyrocketing emissions of major companies, we need to pay close attention to the do-say gap between corporate climate commitments and corporate climate action, which may be hidden from view through membership in industry associations and other multi-initiatives
You can take action to close this gap by joining our campaigns at Action Speaks Louder.
