The clothing and textiles that we make, buy, wear, care for and dispose of are contributors to a wide variety of environmental issues that impact climate change, many of which intersect with one another. 

To name a few: both natural and synthetic fabrics cause microfibre pollution in the ocean. The production of leather and viscose lead to deforestation. Dyeing and processing materials release toxic chemical pollution into rivers. Waste from the export of used clothing clogs landfills around the world. The list could go on.

Against this backdrop, fashion brands are making more noise than ever about contributing to the solutions of these problems. In 2022, 46% of major brands published a sustainable materials strategy and one in five brands invested in circular solutions like resale, repair and rental. Meanwhile, 101 brands, retailers and suppliers have signed the UNFCCC Fashion Industry Charter for Climate Action, which commits them to reach net zero emissions by 2050.

Behind these efforts towards ‘sustainability’ and ‘circularity’, however, is a bleak fact: we need to limit global warming to just 1.5ºC if we want to avoid the most devastating effects of climate change. And an even bleaker fact: the fashion industry needs to reduce its greenhouse gas (GHG) emissions by at least 45% in order to make real progress towards this goal — and it’s currently well behind schedule. 

So why is the fashion industry struggling to reduce its emissions? And what can brands do to help drive meaningful change forward? 

The problem

The majority of fashion’s emissions are produced in its supply chain by fossil fuel-powered factories

The fashion supply chain is complex, messy and opaque. In order to reduce emissions across the whole supply chain at the scale that we need in order to combat the climate crisis, we need to transform the entire energy system behind our clothing and textiles. 

This will be a huge challenge. Here’s why. 

The fashion supply chain is opaque and fragmented

Almost no piece of clothing or footwear is ever made at a single facility or even a single country. The fashion supply chain is truly global, and it’s extremely fragmented. Production is broken down into different stages, called ‘tiers’, with each tier being carried out at a different facility, in a different country around the world. A single dress will have travelled the world, stopping at different factories, farms, mills, laundries and warehouses long before you buy and wear it.

The 4 tiers of the fashion supply chain are:

The 4 Tiers of the Fashion Supply Chain

• Tier 4: Raw material cultivation and extraction. Eg. cotton farming. 
• Tier 3: Material processing. Eg. spinning and weaving yarn into fabric.
• Tier 2: Material production. Eg. dyeing and finishing fabric.
• Tier 1: Product assembly. Eg. cutting and sewing clothing.

Most fashion brands do not own and operate factories, but instead source from international and local suppliers which specialise in a specific tier of manufacturing. A significant proportion of fashion and textile manufacturing is based in China, South Asia and Eastern and Southern Europe. 

Brands work with many different facilities to meet their demands for mass production. For example, H&M alone sources from over 2,800 suppliers.

Fossil fuels rule fashion manufacturing

The majority of emissions in the fashion industry come from the supply chain, with an estimated 52% just from Tier 2: material production. 

Percentage of Greenhouse Gas Emissions Per Tier

Sometimes, machinery at these facilities is powered by electricity rather than direct combustion of coal. However, in countries that have unreliable access to renewable energy, production will still need to rely on fossil fuels which power the electricity grid. 

Brands’ climate commitments contain loopholes

Although brands do not directly control their suppliers, the emissions produced in the factories, farms and mills they source from are still measured by brands. These are called ‘scope 3’ emissions, which refer to ‘indirect’ emissions that do not come from their owned and operated facilities, or from electricity that they have purchased. Major fashion brands hold an outsized economic influence over their suppliers, and therefore it is their responsibility to provide support for those suppliers to decarbonise.

And yet, meaningfully reducing GHG emissions across their entire supply chain tends to be low on brands’ list of climate targets. Although more brands than ever are engaged in various initiatives to reduce their impact on the environment, and some of them do include commitments to reduce their GHG emissions, such commitments often feature loopholes that brands use to avoid facing the transformational change needed to make significant reductions. These loopholes include:

• Creative accounting
  Brands often claim emissions reductions through carbon offsetting schemes, which do not represent genuine climate action in the supply chain. They are also increasingly switching from burning coal to burning biomass. This relies on the combustion of raw materials such as wood pellets, which is highly polluting and can enable deforestation.
• Renewable energy credits
  Brands often purchase unreliable Renewable Energy Credits (RECs) rather than directly procuring their own renewable electricity, for example with onsite solar panels or power purchase agreements (PPAs). Research suggests that RECs do not necessarily drive demand for additional renewable electricity, and therefore do not accurately reflect emissions reductions in the brand’s own supply chain.
• Ignoring scope 3
  Brands promise to reduce emissions in scopes 1 and 2 only, which refer to owned and operated facilities such as offices and retail stores, rather than the supply chain where most emissions are produced. Unless their climate targets cover scope 3, brands are not taking action where it really counts.
• Growing volumes
  Brands set intensity-based, rather than absolute, emissions reduction targets, such as ‘50% emissions reduction per unit of product sold’. This means that emissions can actually increase as the company grows in size, profit and production volumes.
• Avoiding transparency
  Most brands do not invest in full supply chain traceability, which would enable the brand to measure and mitigate emissions at each tier and therefore assess the most effective strategies for decarbonisation.
• Certified greenwashing
  Many brands participate in voluntary certifications and multi-stakeholder platforms that arguably undermine and distract from the major policy shifts needed to slash emissions. 

The solution

Brands must ramp up renewable energy 

Ultimately, to address the emissions problem at source, we need to see fashion brands implementing deep decarbonisation across their supply chain, particularly in tier 2, the material production process. 

According to the UN, renewable energy supply must be doubled globally in order to limit global warming to 1.5 degrees. Much of this will be driven by the actions of big corporations.

So how can brands decarbonise their supply chain?

According to Stand.earth’s Fossil-free Fashion Scorecard, in order to make meaningful change, fashion brands need to be fully transparent on GHG emissions across their entire supply chain. Then, they must commit to reducing these emissions by investing in renewable energy and energy efficiency measures. Because decarbonisation also depends on the sourcing countries’ energy mix, they also need to advocate for climate action at a policy level, including strengthening the renewable energy supply in these countries. 

Stand.earth’s 2023 scorecard reviewed 43 major fashion brands in their climate efforts, and found only five brands have committed to deploying renewable energy across their supply chain, while the majority of brands have yet to show any signs of meaningfully engaging with suppliers to support them to decarbonise.

Fortunately, the technologies already exist for brands to start taking action today. One promising example is the growth of zero-water dyeing and processing systems, which would enable suppliers to eliminate the need for polluting coal-fired boilers. The D(r)ye Factory of the Future project from Fashion For Good provides insight into the significant emissions savings that could be achieved by scaling up these technologies. 

Of course, implementing new technologies will require brands to invest significantly in their suppliers. According to Fashion for Good, there is a $133billion USD funding gap for transitioning from coal combustion to dry processing, but many of these solutions offer an attractive financial return on investment while helping brands to meet their climate targets.

The bottom line: for a truly sustainable fashion industry, we need to accelerate ambition

Beyond individual process improvements from individual brands, the missing piece in a truly sustainable fashion system is the rapid acceleration of renewable energy, which will require the energy landscape of sourcing countries to shift in order to provide reliable, fossil-free electricity to a large number of facilities. Major brands which source from shared regions and even shared facilities are well placed to become powerful advocates for increasing renewable energy supply —but it will require genuine collaboration between fierce competitors.

The challenges involved in decarbonising the fashion supply chain should not be underestimated, but we can no longer wait for weak commitments from brands that fail to meet the urgent action required to limit the most catastrophic impacts of the climate crisis. 

Fashion brands and retailers must commit to a significant absolute reduction of scope 3 carbon emissions by powering their supply chain from 100% renewable energy. If they do, it could eliminate 27% of all GHG emissions associated with the fashion industry. The good news is, momentum for decarbonisation is growing from suppliers, policymakers and customers alike. It’s time for the fashion industry to listen up and take action.

Join our movement to hold fashion accountable for its climate impacts.

The environmental impact of the fashion industry often flies under the radar. However, a closer look reveals that the net-zero commitments of the global fashion industry are lagging behind those of other sectors. The lack of decarbonisation progress in the industry threatens to slow down the world’s net-zero journey. Furthermore, greenwashing is becoming more and more common among many famous brands, while others are trying to convince the public that business growth and environmental friendliness are mutually exclusive. The few shining examples in the niche are not enough to change the status quo. The keys to change are regulatory and public pressure.

The Fashion Industry’s Environmental Impact

The fashion industry is responsible for 2.1 gigatonnes in humanity’s carbon emissions in 2018. This is close to 4% of all global emissions, and it makes up about 10% of the world’s CO₂ emissions. To put that into perspective, it is equivalent to the carbon emissions of some of the biggest economies globally, including the UK, France, and Germany combined.

Environmental Cost of Fashion Production

While the environmental cost of fashion production is already massive, fashion sector emissions will continue to grow. If this is allowed to continue, these emissions will possibly rise to 1.588 gigatonnes by 2030.

Projected GHG Emissions for the Apparel Sector, 2019–2030, Source: World Resource Institute

The environmental impact of the fashion industry affects more than just the climate. Studies have found that synthetic fibres account for 35% of marine microplastic pollution. However, they also take a toll on terrestrial pollution, with 176,500 metric tonnes of polyester and nylon being released annually onto land. Currently, synthetic fibres produced from crude oil and natural gas account for 69% of the material input for clothing production worldwide. Furthermore, the annual CO₂ emissions from polyester production today equal the yearly emissions of 180 coal-fired power plants.

The Fashion Industry’s Environmental Impact in Asia

It is no secret that most fashion brands produce their products in emerging Asian economies. The latest data shows that the top five apparel exporters by value are China, Bangladesh, Vietnam, Germany and India.

China is responsible for producing 65% of the world’s clothes. Furthermore, apparel accounts for over 80% of Bangladesh’s total exports, while Southeast Asia is the fastest-growing apparel hub globally. The result is massive textile waste and the use of fertilizers for cotton production.

However, out of the 57 Asian companies from the textiles, apparel, footwear and luxury goods industries with near-term science-based climate commitments, the targets of just eight of them align with a 1.5°C pathway.

Why Does the Problem Exist?

First, the current net-zero pledges of the global industry and fast fashion brands are insufficient and incomplete. There are a limited number of targets covering Scope 3 emissions, which hold the highest share in companies’ emissions. Furthermore, many brands do not even bother to disclose this information in their environmental reports.

Scope 3 Emissions Dominate the Breakdown of Emissions for a Selection of Companies with Approved SBTs.
Source: World Resource Institute

Even though over 70% of the industry’s emissions originate from raw material production and processing, just 47% of brands disclose their manufacturing facilities. Only 27% disclose their processing plants, and just 11% list their raw materials suppliers.

The Fashion Transparency Index 2021 ranks 250 of the world’s largest fashion brands and retailers. Only 26% have science-based targets, and only 17% disclose Scope 3 emissions from raw materials.

Meanwhile, the most troubling observation is that as much as 59% of green commitments by fashion industry companies are merely greenwashing.

Prada, Hugo Boss and Mammut Sports – The Good and the Bad Examples

Stand Earth’s Fossil-free Fashion Scorecard evaluates brands’ climate commitments, reliance on renewable energy, low-carbon materials, shipping practices and advocacy. It states that the best-performing company globally is Mammut Sports. Its sector-leading commitments include halving its emissions, switching to renewable energy across its supply chain and transitioning to zero-emission shipping vessels by 2030. n the other end of the spectrum are companies like Primark and Under Armour and luxury brands like Prada, LVMH, Hugo Boss, and Armani.

The Fashion Transparency Index 2021 has singled out brands like OVS, H&M, The North Face and Timberland as the best-performing ones. Apparel producers like Mexx, Pepe Jeans, Tom Ford, Max Mara and Quicksilver are at the bottom. Companies like Adidas, Reebok, Bershka and Zara have taken a significant hit to their rankings in 2021.

Fashion Transparency Index 2021 Quick Findings. Source: Fashion Revolution

Nike and Adidas are not Transparent

When it comes to brand transparency, fossil-fuel synthetics use and commitments to phase them out, the Changing Markets report has found no clear front-runners. At the bottom of the chart are companies like Nike, Reebok, Adidas, the North Face, Timberland, Primark and more.

What Can the Fashion Industry Do to Reduce Its Environmental Impact?

The spotlight for decarbonisation often falls on heavy industry and hard-to-abate sectors, while the fashion industry’s environmental impact is undervalued. Sustainable fashion is the need of the hour.

Changing Markets concludes that the fashion brands are “knee-deep in fossil fuels.” For a change to happen, greenwashing practices must end. In the era of the conscious consumer and growing competition, greenwashing can result in massive reputational and financial risks as well as the loss of consumer confidence.

In terms of concrete steps, the World Resource Institute recommends six measures that collectively can ensure that the industry remains in line with a 45% reduction pathway by 2030.

Key Interventions for Reducing Emissions towards Net Zero, Source: World Resource Institute

Furthermore, the industry as a whole should be looking to abandon the unsustainable fast-fashion model and move towards circular business processes, enabling higher durability of garments, extended warranties and the promotion of reuse. Patagonia is a great example of this. Companies should also commit to ambitious and comprehensive climate targets, reduce their dependence on fossil fuels and focus on cutting Scope 3 emissions. In order to decarbonise, the fashion industry needs USD 1 trillion by 2050.

Financing Mix Across Solution Categories. Source: Fashion for Good

Understandably, relying on the industry’s inner motivation to embrace such a significant restructure is too idealistic. Regulators should introduce laws that will make it mandatory for companies to identify, prevent and account for ESG risks. Oversight authorities and industry bodies should also hold fashion brands accountable for their green claims.

If these measures fail, the best weapon is to tackle the sector’s price sensitivity. Any additional carbon tax for high-emissions products will significantly affect profits, urging companies to act. Furthermore, any form of industry support should also be conditional and based upon companies’ climate-related performance.

What’s Next For the Fashion Industry?

The sector is highly fragmented. There are no companies that we can point fingers at and put the blame on. As a result, change can only result from a collective effort. Collaboration and collective action are critical for creating effective and meaningful solutions. Fortunately, if there is any sector where public pressure can make the biggest difference, it is the fashion industry.  

This post was originally published on Energy Tracker Asia.