There is a stark disconnect between fashion suppliers and vendors when it comes to sustainability commitments, with at least 50% of brands and retailers not engaging suppliers in their green objectives, the UN Fashion Industry Charter for Climate Action reveals ahead of COP28 in Dubai which kicks off on 30 November.

Responsible for between 2 and 8% of annual global greenhouse gas emissions, the fashion industry has a key role to contribute in the global ambition to limiting the temperature rise to 1.5 degrees celsius in accordance with the Paris Agreement.

But while there are well-intentioned actions by the fashion sector to lower its carbon footprint and help to meet the temperature target, data suggests it will struggle to do so if it continues on its current trajectory.

UNFCCC key findings from CDP Data for 2023

  • 89% of signatories complied with the Fashion Charter’s basic reporting requirement and disclosed climate-related information via CDP. In 2022, nearly twice as many signatories submitted their response publicly when compared to 2020.
  • 45% of the active signatories in 2022 are compliant with setting public climate targets needed to keep global warming below 1.5°C. 17% more are committed to setting a 1.5°C target with the Science Based Target Initiative.
  • Disclosing signatories have demonstrated improved carbon accounting practices. 99% of disclosing signatories calculate and report their operational emissions (Scope 1 and Scope 2 emissions). Only 50% of signatories report third-party verified Scope 1 & Scope 2 emissions.
  • The number of signatories reporting their energy consumption has doubled over the past three years. 30% are not yet providing this information in the most recent disclosure cycle.
  • From 2020 to 2022, there has been a noticeable increase from 18% to 42% of signatories who reported they have set a measurable 100% renewable energy target for their operations by 2030. Data is missing for about 50% of signatories.
  • Driving Scope 3 emissions reductions is a key lever in all 1.5 degree Celsius targets set by signatories. The data provided by signatories shows a 20% increase in overall supplier engagement. In 2022, 80% of the signatories indicated they engage their supply chains on climate-related issues.
  • Signatories are increasingly disclosing that they engage with their value chain partners on climate issues by collecting primary information, incentivisation, and driving innovation and collaboration with suppliers. In the 2022 reporting cycle, 24 out of the 93 reporting companies indicated that they included climate-related requirements into their supplier contracts.

However, while 90% of signatories to the UNFCC are engaging suppliers with their green objectives, this reduces to just 50% when considering the entire fashion sector. Approved Science Based Targets (SBTs) falls to 10% on a sector-wide basis from 40% of signatories and reporting of total renewable energy consumed falls to 39% from 76% on a sector-wide vs signatories comparison. Verified scope 2 emissions disclosures fall to 16% on a sector-wide basis from 54% of signatories.

Andrew Martin, executive vice president of the Sustainable Apparel Coalition tells Just Style we are at “a tipping point”, not just for the industry, but for the planet.

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By GlobalData

“Traditional business models exacerbate social and environmental problems and we are not doing enough or evolving fast enough to not only mitigate but to improve them.”

Evidently, the data suggests it all falls down when it comes to collaboration and the supply of evidence-based claims.

The proof is in the pudding – but where is the pudding?

Speaking to Just Style, Liv Simpliciano, policy and research manager at Fashion Revolution asserts: “Fashion brands often use COP to announce glossy commitments. Our research in the Global Fashion Transparency Index shows that once again this year while brands are telling us more about their policies and commitments, they are telling us much less about what these policies and commitments have achieved. And in the absence of disclosed evidence, it is difficult to understand if the fashion industry is turning things around. We don’t need more commitments – we need more progress.”

In fact, according to Fashion Revolution, since the Paris Agreement came into being five years ago, global emissions have risen, so too have emissions of fashion brands.

And, according to UNFCCC, while 99 companies including brands, suppliers and retailers committed to the goals of the Fashion Industry Charter for Climate Action – correct as of 22 February 2023 – in the last three years alone, 31 signatories have lost accreditation with the Charter due to failure to report or have made the decision to leave the Charter and engage more actively with other industry coalitions.

Citing the latest Emissions Gap report, Simpliciano says we are “on track to warm our planet by nearly 3 degrees Celsius without aggressive actions, with current levels barrelling to a point of no return.”

Transparency and accountability are lacking

She believes what is halting progress is the “huge lack of transparency and accountability”.

“Aggressive actions are impeded by the lack of transparency because it inhibits the true scale of the problem and obscures where the greatest responsibility for action lies.”

It’s a sentiment shared by Samata Pattinson, CEO and Founder of BLACK PEARL a new organisation advocating for sustainable action in the textile industry. Pattinson has been instrumental in drafting the COP28 programme.

“Accountability is a central challenge in climate dialogues, particularly concerning conflicting financial interests. This aspect could impact the fashion industry’s sustainability efforts by highlighting the need for transparency in funding and decision-making processes, pushing for accountability and ethical practices across the supply chain. Despite the challenges securing funding, some sources must be turned down if they support reliance on fossil fuels.”

She says COP28 will address several critical themes that will significantly impact the fashion industry including debt for climate, highlighting the looming unpaid environmental debt held by the Global South and marginalised communities; biodiversity which is serving as a reminder to the fashion industry about the importance of sustainable sourcing practices that protect ecosystems and biodiversity; and the human impact of climate change with a particular focus on health-risk as a result of climate change.

One of the key focus areas will be on the representation of marginalised communities in decision making spaces concerning climate change.

“This inclusion seeks to address the disproportionate impact these regions face due to climate change and acknowledges their voices in shaping impactful policies. Fashion brands and organisations might proactively involve representatives from Global South communities in their sustainability councils or boards to ensure their voices are heard in crucial decisions. For instance, collaborating with indigenous artisans for sourcing raw materials can empower these communities and promote fair trade practices,” says Pattinson.

A spokesperson for the Better Cotton Initiative, agrees, telling Just Style that while there are many challenges facing the fashion industry today, it is important to highlight sustainable livelihoods.

“The industry needs to ensure people come first – farmers, workers and everyone along the supply chain. For us, sustainability is not only about environmental goals, but it also means increasing the net income and resilience of farmers and workers around the world.

“The industry needs to engage more with civil society and unions to ensure their efforts support farmers and workers through partnerships and innovative financing mechanisms.”

According to the Fashion Industry Charter for Climate Action’s 2023 findings, the biggest gap is in supplier engagement.

Signatories are encouraged to collaborate on supplier initiatives and to leverage their joint purchasing power to drive climate action. It is recommended to collect comparable data on supplier performance and build climate-change performance indicators into supplier contracts. But the current gap stands at 75%.

Over the last few weeks the garment manufacturing sector in Bangladesh has hit headlines with violent worker protests over minimum pay, resulting in several deaths, and sending shock waves through the sector.

Simpliciano explains: “There is no sustainable fashion without pay. Many of the issues in the fashion industry could be solved if brands were willing to pay higher prices to their suppliers. It is well known that brands’ purchasing practices are key enablers of good working conditions in their supplier facilities and yet, brands continue to drive inequalities through unfair purchasing practices, which form the backbone of the fashion industry.”

She adds evidence continues to mount that major fashion brands engage in practices which are volatile and abusive toward their suppliers with just 12% of brands disclosing a responsible purchasing code of conduct.

Simpliciano points out the fashion industry had a chance to show up in solidarity with the people who make our clothes in Bangladesh in their fight for an increase in the minimum wage – not even a living wage. However, she notes major fashion brands acknowledged their responsibility but still have failed to pay higher prices to suppliers.

She says “there is little option left, other than the most powerful, profiting stakeholders in the supply chain — international fashion retailers — stepping up”.

Martin agrees, adding further emphasis must be placed on collaborative efforts to achieve real change.

“Partnership is the new leadership – these are words that we live by. We co-founded the apparel alliance – with Aii, Textile Exchange, and ZDHC Foundation – to coordinate tools, programs, and resources that reduce redundancies and drive performance improvements and collective actions to achieve a 45% reduction in greenhouse gas emissions.”

Together with Fair Wear and the Ethical Trading Initiative, the SAC has created The Industry We Want initiative to develop a set of metrics to measure action across three critical issues: the wage gap, purchasing practices, and GHG emissions. This was followed by the launch of the Industry Dashboard, synthesising feedback from suppliers in 54 countries and was accessed by over 500 stakeholders.

And in March, on consultation with its members, apparel alliance partners and other industry experts it launched a major update to the Higg Brand and Retail Module (BRM) to better align with best in class frameworks on issues including responsible purchasing practices.

“We continue to work towards the development of a clear set of milestones to offer coordinated, industry-wide solutions.”

Sustainability successes impeded by restricting voices of change

While there are 99 signatories in total to the Fashion Charter for Climate Action, 96 of them are brands and retailers while only 30 of them are manufacturers.

Pattinson says: “We aren’t even having the conversations we should be having because I would say 60% of the key voices are missing from the table, ranging from people whose first language is not English to the huge number of every day citizens who see fashion as a frivolous and non-intellectual pursuit, therefore failing to recognise its true climate impact.

“We have to explore lenses such as socio-economics and how sustainability is priced and what it costs, across to how elements like race and gender are gate-keeping crucial voices from sharing their solutions, experiences and challenges.”

How can the fashion industry move the needle for good?

Data from Higg, the Sustainable Apparel Coalition and Textile Exchange estimates apparel sector emissions at 1.025 gigatonnes (Gt) of carbon dioxide equivalent (CO2 e) in 2019, or roughly 2% of annual global greenhouse gas (GHG) emissions. Unchecked, emissions will grow to 1.588 Gt by 2030, well off pace to deliver the 45% absolute reduction needed to limit warming to 1.5°C.

At least six interventions have been identified for the sector to reduce emissions:

  • Maximising material efficiency. Through design, material selection, and methods of manufacturing, reduce the amount of fibre and materials that go to waste in each stage of production.
  • Scaling sustainable materials and practices. Increase the use of more sustainable materials (such as recycled polyester) and practices (for instance, conservation tillage for cotton).
  • Accelerating the development of innovative materials. Ramp up investment in next generation materials, including textile recycling, bio-based materials, and plant-based leather.
  • Maximising energy efficiency. Expand energy efficiency efforts across manufacturing facilities.
  • Eliminating coal in manufacturing. Replace coal as a thermal energy source for materials and product manufacturing.
  • Shifting to 100% renewable electricity. Deploy renewable electricity across the supply chain.

Fashion industry developments since COP27

Gen Phoenix takes leather and textile waste and regenerates them into premium next-gen materials for the fashion, auto, aviation and transport industries to boost the transition to a circular economy.

CEO John Kennedy tells Just Style collaboration on solutions such as this is essential in realising that vision for a sustainable industry.

“Rather than fixating on a perfect 100% sustainable material, we advocate for prioritising innovations that immediately minimise waste. Collaborating with next-generation material innovators, we’ve found that consumers overwhelmingly support progress, understanding that perfection evolves over time. In our pursuit, we’re actively exploring avenues like post-consumer waste recycling and plant-based alternatives, aiming to revolutionise industries like automotive, aviation, and fashion.

He acknowledges potential challenges but the company is investing in research and development, forging collaborations to pool knowledge and resources, engaging stakeholders transparently, adapting to evolving regulations, educating consumers about the merits of sustainability, diversifying the supply chains, and implementing robust monitoring and reporting systems.

He believes this comprehensive approach will lead towards environmental and social sustainability.

Swedish fashion retailer H&M has consistently been one brand at the forefront of sustainable change in the fashion industry.

To help it achieve net-zero, it introduced a goal to reduce absolute scope 1, 2 and 3 emissions by 56% by 2030, from a 2019 baseline. Energy efficiency and the availability and usage of renewable energy are some of the key areas it focuses on. On an overall level, H&M Group achieved 7% absolute reduction in scope 3 greenhouse gas emissions and 8% absolute reduction in scopes 1 and 2 emissions in 2022, compared with the 2019 baseline.

A spokesperson for H&M Group explained: “In line with the group’s ambition to achieve net-zero CO2e emissions by 2040, H&M Group has for the past few years set focus on making funding available to reduce greenhouse gas emissions across and beyond its own supply chain.

“Our Green Fashion Initiative enables supplying factories to invest in the technologies and processes needed to reduce energy demand and replace fossil fuels across the fashion industry. H&M Group is a lead funder in Aii’s Fashion Climate Fund, which helps execute foundational supply chain improvements, including transitioning to renewable electricity, improving energy efficiency, eliminating coal in manufacturing, scaling sustainable materials and practices, and accelerating next-gen materials.”

Beyond this, it has tested and invested in textile recycling companies like HKRITA’s Green Machine, Renewcell and Infinited Fiber Company, which tackle current recycling challenges with different innovations.

One of the challenges it has run into is poor options to scale technologies and increase availability of recycled fibres across the sector.

Exploring collaborative financing, it says, is a means of creating rapid change at scale.

H&M Group is making funding available to reduce greenhouse gas emissions across and beyond its own supply chain. But the retailer believes decarbonising supply chains is a shared challenge that can only be tackled with strong shared commitments and collaborative financing.

The H&M spokesperson adds: “For us, sustainability investments are not only a responsible approach but a strategic necessity for future success.”

Earlier this week it agreed a partnership with Southeast Asia’s bank DBS to kick off what it describes as a “first of its kind” green loan programme to accelerate the decarbonisation of fashion supply chains.

The H&M Group states it’s an undeniable truth that the way fashion is produced and consumed needs to change: “We believe sustainability is a pre-requisite for our future. To be able to operate within planetary boundaries, the sector must decouple its own resource use from growth.”

And it is a generally shared belief that the biggest and most impacting changes occur when they happen right at the start of the production process.

The Better Cotton Initiative (BCI) launched five impact targets this year underpinning the ambitions set out in its 2030 strategy. These include reducing greenhouse gas emissions, cutting pesticide application, improving soil health, empowering women and progressing farmer livelihoods.

“A milestone moment for us this year has been the launch of our traceability solution, which has been three years in the making and itself creates new opportunities that wouldn’t be possible without enhanced supply chain data,” a spokesperson for BCI tells Just Style.

BCI is working on an Impact Marketplace, which would enable retail and brand members to reward Better Cotton Farmers for field-level progress in line with several sustainability indicators.

The BCI spokesperson adds: “Such a mechanism would not only benefit livelihoods by directing finances to the farm-level, but it would also incentivise continuous improvements in the production of more sustainable cotton, which is good for business.”

How the sector plans to leverage COP28 learnings

Many within the industry are looking forward to gaining more insight around how they can drive ambition to action when it comes to meeting the commitments made to combat rising climate change.

Martin says: “While innovation will be much vaunted, as an industry we really need to ensure that we also remain focused on proven solutions such as coal elimination, implementation of renewable energy sources, and improvements in energy efficiency. These will only be delivered through inclusive collective action, and access to the necessary investments to deliver these changes.”

BCI’s spokesperson asserts: “From energy transition to sustainable agriculture, most topics negotiated at COP28 can have a direct impact on global fashion supply chains. Better Cotton welcomes COP28’s focus on putting nature, people, lives and livelihoods at the heart of climate action. As a farm-level standard, it is key for us to ensure progress related to climate also provides for dignified lives around the world.”

Kennedy reckons discussions will centre around reducing carbon footprints, increasing sustainable practices and environmental initiatives.

“We expect a heightened focus on sustainable materials, transparent supply chains, and ethical practices, influencing the landscape of fashion sourcing.

“These conversations are especially relevant for Gen Phoenix, we are keen to stay abreast of global environmental policies to ensure we’re aligning our fashion sourcing strategies with emerging regulations and agreements. Our dedication to creating recycled leather at scale and exploring sustainable alternatives positions us to contribute significantly to the industry’s transformation.

“We will seek to understand any new standards or guidelines that may arise from COP28 to ensure we can work with our brand partners to create positive environmental change in fashion sourcing.”

From a brand-level perspective, H&M says it is looking forward to seeing more discussions around reforms in energy markets which it says are crucial for suppliers having access to renewable energy.

The retailer plans to engage with policymakers to advocate for mechanisms such as Power Purchase Agreements and Green Tariff to become the norm. It also supports the establishment of legal frameworks around attribution mechanisms for energy certificates.

H&M’s spokesperson adds: “Given that the decarbonisation path will inevitably require us to adopt new technologies, we advocate for all stakeholders to come together to offer the right incentives to suppliers to make the necessary investments.”

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