2nd Edition of Business of Fashion’s Sustainability Index – What’s New?

By Sarah Kent 20 July, 2022

BoF's 2nd Sustainability Index is hot off the press. BoF's Kent shares what's new & how fashion's biggest 30 companies performed

Index doubled in scope to fashion's 30 biggest listed companies by revenue across luxury, high street & sportswear; see how Burberry, Puma, H&M and others performed
Avg overall score was just 28/100; the industry is moving far too slowly - some of the biggest players in the industry provide little or no info on addressing env/social impact
At this pace no company can meet 2030 goals; 5 key levers for near-term action - incl. stronger regulations, addressing power imbalance in sourcing
Sarah Kent
Author: Sarah Kent
Sarah Kent is London Editor at The Business of Fashion. Her writing is primarily focused on the environmental and social challenges and opportunities facing the fashion world today. She helped create the BoF Sustainability Index, which measures the industry’s progress towards sustainability goals for the next decade. Prior to joining BoF, Sarah spent eight years at The Wall Street Journal, where she covered the energy sector.
Read more from Sarah Kent →

The second edition of the Business of Fashion’s (BoF) Sustainability Index was released on 31st May 2022, tracking the industry’s progress towards ambitious goals in six key impact categories (emissions, transparency, water & chemicals, materials, workers’ rights and waste).

This year, the report has doubled in scope to assess the performance of 30 of fashion’s biggest publicly-traded companies in the luxury, sportswear and high street sectors (including Kering, LVMH, H&M Group, Inditex, Nike, Adidas & Under Armour and new ones like Lululemon, Asics &, Burberry). CWR’s Dawn McGregor sits on the council that helped design the Index targets.

CWR sat down with report author, Sarah Kent to get the key findings from this second edition of the Index as well as key trends and differences from the first Index. You can see our interview with Sarah on the inaugural Index here.

CWR: Sarah, thank you for sitting down with us and congratulations on the second edition of the Business of Fashion’s (BoF) Sustainability Index! What is new about this year’s Index and why did you make the changes?

Sarah Kent (SK): This year we made two broad changes: we doubled the number of companies we looked at from 15 to 30, and we streamlined our methodology from over 300 individual metrics to just over 200.

No. of co’s doubled to 30 -10 biggest listco’s in luxury, high street & sportswear

We always wanted to increase the number of companies in the Index to make the sample we look at more representative of the industry as a whole. This year we’ve assessed the 10 biggest publicly listed companies by revenue across three market segments: luxury, high street and sportswear.

As we expanded the number of companies we looked at we also re-examined our methodology. It rests on 16 specific targets, ranging from reducing absolute greenhouse gas emissions by 45% by 2030 to ensuring workers receive a living wage by 2025. Those haven’t changed.

But we did condense the metrics that determine how companies perform against each target to remove duplication and increase the level of commitment and action required to score a point.

CWR: What are some of the key findings from this second edition of the Index? Which companies are on top and who are the laggards? Does any segment – luxury, high street, sportswear – perform best?

SK: Broadly speaking, the industry is moving far too slowly to address issues of sustainability that are increasingly critical.

“the industry is moving far too slowly…

…avg overall score just 28/100”

The average score across the 30 companies assessed this year was just 28 points out of 100. Puma led the ranking, with an overall score of 49 points. Burberry was the only new addition to make it into the top 10, with an overall score of 41 points.

Meanwhile, some of the industry’s biggest players provide little to no information on how they are addressing their environmental and social impact. Urban Outfitters owner URBN, Skechers, Fila Holdings and Anta all scored less than 10 points. Chinese retailer HLA Group scored no points at all.

Market segment not a strong performance determinant

From a segment perspective, the worst performers were in the high street and sportswear segments, but these also contained some of the best-performing companies. Overall, we didn’t find the market segment a particularly strong determinant for performance.

CWR: How do the results this year compare to last year? Are they very different? Are there clear trends coming through?

SK: While the scores of the 2021 and 2022 Indexes are not directly comparable because of the addition of 15 new companies, the difference is striking. By increasing the scope of the assessment, we found scores worsened in every category except emissions.

The original companies assessed in 2021 demonstrated incremental progress, with their average score increasing from 31 points to 36 points. But the average score for the new additions was just 20 points.

CWR: What do the results say about fashion’s progress towards critical sustainable goals? What does the industry need to be doing to fast-track action?

SK: At the current pace of progress, no company is on track to meet the goals set for 2030 and some of the industry’s biggest players have yet to meaningfully engage with issues related to sustainability at all.

The Index identifies five key levers for action in the near term that could help start to move the needle more meaningfully.

5 key levers for to drive near-term action

Regulation is needed to create accountability and incentivise change; With concerns about greenwashing driving greater scrutiny of the industry’s sustainability claims, urgent action is needed to strengthen existing standards and certifications and prevent a crisis of credibility; To address fashion’s social impact, the power imbalance in sourcing practices must be addressed; Better traceability and transparency underpins these wider efforts, as does real investment in change.

CWR: What’s next for the Index?

SK: We’re planning for the 2023 edition now. Our goal is to keep benchmarking the industry’s progress on an annual basis to understand where any gaps in action and point to opportunities to change.

Further Reading

  • Business of Fashion’s Inaugural Sustainability Index: The Sustainability Gap – BoF’s Sarah Kent who led the inaugural sustainability index talks to us on the why, how & what’s next. Plus, see how the largest 15 global fashion companies scored
  • Fast Fashion’s COVID Death & Virtual Revival? – Fast fashion is dying – from broken supply chains and no demand thanks to WFH. CWR’s Dawn McGregor and Debra Tan reimagine fashion’s future – a virtual realm where our avatars attend Zoom drinks and digital supermodels walk the runway
  • Fashion Frolicking In Oil – Fashion is practically frolicking in oil as CWR’s Dawn McGregor points out. 2.5% of global oil produced is used by the fashion industry. See why this is and how the fashion accounts for 35% of ocean microplastic
  • Sustainable Fashion Today: A Sweet But Short High – 2019 has been a busy year for sustainable fashion but with sweet but short highs as CWR’s Dawn McGregor highlights. Given fashion’s huge climate impact, McGregor laments the need for more strategic solutions
  • Fashion Has The Power To Shape A 2℃ World – If fashion were a country it would have the fourth highest carbon emissions behind the US, China, & India. China Water Risk’s Dawn McGregor & Debra Tan question why the industry is not under the spotlight like coal and call for faster disruptions
  • Fashion Headlines This Festive Season – With lots happening in fashion over the last quarter, China Water Risk’s Dawn McGregor shares what is making her hopeful but also fearful. Plus, see what she says is forcing the industry to develop a new relationship with pollution

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