Fashion: Still Too Little & Too Slow In The Climate Fight

By Dawn McGregor 20 July, 2022

While some industries are stepping up in the climate fight, fashion that accounts for 8-10% of GHGs isn't. CWR's McGregor rounds-up the latest worrying trends

$1 trn needed to decarbonise fashion but green investments still only a drop in the bucket; new climate fund at $250 mn with each donor at $10 mn over 8 years - Lululemon (a donor) recorded $3.6 bn 2021 gross profit
Fashion’s biggest co’s not performing well on environment as seen in 2nd BoF Sustainability Index & just as bad, co’s like Shein are perpetuating ULTRA-fast-fashion
Meanwhile, biggest sustainability certifications like ZDHC & Higg Index have been called out - could be a chance to start fresh but is there time? Industry & consumers to step-up!

Sitrep: Europe is being savaged by wildfires due to extreme heatwaves, China meanwhile is also suffering from extreme heat in the North as well as flash floods in the South and the recent US Supreme Court ruling limiting the Environment Protection Agency’s authority is the cherry on top of recent disasters. Things are bad and it is only going to get worse as global temperatures continue to rise, making a 1.5°C or 2°C world a must. What does this have to do with fashion? A lot (as we’ve written about it before).

In 2015, fashion’s carbon emissions were already more than that of international flights and shipping. Recent estimates show that the fashion industry is one of the world’s biggest industrial polluters, accounting for 8-10% of global greenhouse gas emissions. And the alarming current narrative from recent reports, articles etc. is that despite knowing the dire impacts, fashion is still doing too little and moving too slow in the climate fight. Get on top of the latest worrying movements in fashion in this round-up.

Still not nearly enough money being allocated to clean-up, decarbonise or change the model despite goals fast approaching

For an industry valued at $3 trillion, the amount going towards becoming clean/ sustainable/ green/ reach net zero, is still just a drop in the bucket.

A new report estimates that an investment of around $1 trillion will be needed to finance the textile industry’s transition to net zero by 2050. By 2030, fashion has a goal to halve its emissions.

$1trn needed to finance fashion’s transition to net zero by 2050

One new venture in the financing space is the $250 million “Fashion Climate Fund” – mix of corporate & philanthropic – aimed to tackle the decarbonisation challenge. Initial donations have come from the H&M Group, Lululemon, H&M Foundation and The Schmidt Family Foundation.

Each donor is expected to contribute $10 million over the next eight years. For context, in 2021 the H&M Group had a gross profit of SEK 105,006 million and Lululemon of $3.6 billion.

Many companies still not performing well – latest data from the BoF 2022 Sustainability Index

The Business of Fashion (BoF) released its second Index that benchmarks fashion’s progress on a series of sustainability goals. It found that progress of big fashion names like Kering, H&M, Levi, Burberry, Gap Inc. etc. is “only incremental and outweighed by wider inaction”.

Fashion’s biggest co’s not performing well on environment…

The average overall score across the 30 companies of the Index was just 28 out of 100 and shockingly, some of the brands are providing little to no public details on their environmental and social impact. Read more on the Index (CWR sits on the Council that helped design the targets) and its findings in our interview with BOF’s Sarah Kent, who is in charge of the Index.

More than not performing well, some companies are troublingly going in the wrong direction like Shein; and they are playing right into fashion’s rampant greenwashing

Shein, a Chinese fashion upstart, is very popular among young consumers for its styles, variety, quick shipping but ultimately super cheap prices. It’s popularity has helped lift its valuation to an estimated $100 billion in April this year and it now accounts for 31% of the US’s fast fashion market, overtaking Zara and H&M’s combined share.

The BIG problem is that Shein isn’t a fast fashion company but an ULTRA-fast-fashion company, something the planet and climate cannot afford. Shein has outpaced big fast-fashion names in terms of product launches – H&M by 6,584 percent, Zara by 4,259 percent and Boohoo by 1,385 percent since the start of the year.

…and just as bad, co’s like Shein are perpetuating ULTRA-fast-fashion, which the planet cannot afford

Shein has an outsized environmental footprint and has been caught selling merchandise ladened with toxic chemicals. Speaking on Shein’s first ever sustainability report, David Hachfeld, textiles expert at Swiss watchdog group Public Eye, said it is little more than a “farce” because it provides “no signal that it’s [moving away] from its business model of driving overconsumption”.

On top of this, Shein is playing right into fashion’s rampant greenwashing. In June 2022, it launched a $50 million fund to tackle waste. BoF reported that the commitment over five years pales in comparison to the reported $16 billion in revenue in 2021.

Leading sustainability certifications and initiatives accused of providing ‘License To Greenwash’ but is there time to start from scratch?

Ten big sustainability assurance names including ZDHC and the Higg Index have been accused of providing an “industry-wide smokescreen for the unsustainable trajectory of fast fashion“, according to a new report form the Changing Market Foundation, “License To Greenwash”.  The report says none of them are fit for purpose and some having delivered “no measurable impact”. You can see some the responses from those called it – ZDHC, blueisgn.

Meanwhile, biggest sustainability certifications like ZDHC & Higg Index have been called out…

…could be a chance to start fresh but is there time?

The Sustainable Apparel Coalition (SAC) has also been facing other issues linked to H&M, a SAC member, receiving a greenwashing warning and an article in the NY Times on the Higg Materials Sustainability Index (MSI) favouring synthetic fibres.

SAC has since announced that it is commissioning an independent third-party expert review of the data and methodology behind the Higg MSI Index, a module of the popular Higg Index and is pausing its consumer facing Transparency Program.

With an industry so addicted to it thirsty, dirty, polluting and climate intensive ways (practically frolicking in oil), maybe all of this is a good thing?

Take it down to the studs and start fresh… But years, decades, have gone into establishing these certifications and initiatives and there is some value in them. Plus, time is running out for fashion to meet its 2030 and 2050 goals and for the planet to limit warming. Is there time to start fresh?

Fashion needs to step-up but so do consumers, we are all in this climate fight

Oh and on the topic of standards, China has released its own sustainable cotton standard, following the issues with the Better Cotton Initiative certification.

That’s the round-up. There are some encouraging pockets of news, like the EU’s Strategy for Sustainable and Circular Textiles has been released. Some of the measures include a mandatory EU extended producer responsibility scheme and ecodesign requirements for textile products. But there is so much to do and such little time. Fashion needs to get serious, step up and chart a clear path forward. Consumers have a big part to play too, and any Shein buyers, now you know so what are you going to do? Fashion is just one way we can tweak our habits for a 2°C world.

Further reading

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Dawn McGregor
Author: Dawn McGregor
Dawn leads CWR’s work to help corporates navigate increasingly disruptive & material risks from water & climate threats, as well as transitional risks in the supply chain arising from new regulations in China. Here, Dawn engages extensively with the global fashion industry delivering on-ground workshops in China to keynotes and strategic input at European HQs. She has written at length on the end of dirty and thirsty fast fashion and her report to overcome gaps between brands and manufacturers for a clean and circular future inspired the industry to create a new wastewater tool. Dawn also works closely with the property and tourism sectors where she not only conducts strategic assessments of their exposure but builds collective action toward resilience via closed door working groups and invite-only events. Having helped build CWR, Dawn is a frequent keynote, panellist & moderator at events, including being twice selected as the lead-rapporteur at World Water Week. Her articles are cited in various industry publications including the UN’s ‘World Without Water’. Dawn previously worked in a global investment bank assessing geo-political risk, crisis management and business resiliency. She was born and bred in Hong Kong and has lived in France, England, Singapore and Beijing.
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