Fashion companies are lagging behind with climate change goals, prompting buyers and investors to look elsewhere

The world’s largest fashion companies are not doing enough to meet climate goals, although some are improving their social and environmental performance, the report shows.

According to the 30 largest clothing manufacturers in the world, they are either stagnant or backward in terms of sustainability issues in six impact categories Fashion Business Sustainability Index.

Of the 30 companies surveyed, the average overall score was only 28 points out of 100, a decrease from last year’s average of 36.

Overall, the best was Puma with 49 points, followed by last year’s leader Kering – French owner Gucci, Balenciaga and Yves Saint Laurent – Levi Strauss, H&M Group and the new Burberry.

The report’s authors say the results refute “a significant gap between the public commitments of big brands and meaningful, measurable actions.”

The fashion industry is responsible for about 10 percent of total greenhouse gas emissions in humanity (Photo: Francois Mori / AP)

“You have some leaders who are making small strides, but it’s basically a big picture that the industry is very bad,” said Sarah Kent, chief sustainability correspondent for The Business of Fashion..

Puma welcomed the recognition, but CEO Bjorn Gulden said “much remains to be done”. Kering’s chief executive for sustainability, Marie-Claire Daveu, said her company was “fully aware of the challenges ahead”.

However, expanding the scope of the report led to a poorer overall performance, Ms Kent said: adding 15 new firms led to a lower average rating in all categories except emissions.

The report measured performance in terms of emissions, transparency, water and chemicals, waste, materials and workers’ rights, giving companies a score of 100, with each point representing either adequate performance or significant progress. Firms are rated “yes” or “no” for 201 binary metrics, based on information accessed December 31, 2021.

The fashion industry is responsible for about 10 percent of the total greenhouse gas emissions in humanity and is the fifth most polluting industry in the world, according to a recent report by the World Economic Forum.

Fast fashion, which gives priority to reproducing the latest look in the shortest possible time, is a key player in 93 billion cubic meters of water – enough to meet the needs of five million people – used by the clothing industry every year. say the United Nations.

It also plays a big role in 500,000 tons of microfibers, which is equal to three million barrels of oil, which the clothing industry throws into the ocean annually. On top of that, more than half of the discarded clothes end up in the landfill.

The World Bank predicts that the fashion industry’s greenhouse gas emissions will increase by more than 50 percent by 2030, at current rates.

The aversion to fashion pollution is growing, and consumers are increasingly aware of the supply chain and the origin of their clothing. GlobalData’s market intelligence survey shows that 69.6 per cent of consumers in the UK plan to limit their spending on clothing as the cost of living rises.

Firms are caught between keeping up with the latest styles, while at the same time showing that they are limiting the environmental and social impacts of the life cycle of their clothing.

“It’s not easy to solve the problem,” says Jessica Alsford, Morgan Stanley’s chief sustainability director. “Many large retailers are of the opinion that sustainability should be built into the company’s core operations and corporate culture, not reduced to a single product line.”

Those retailers who do not move along with these market forces are in danger of being left behind. There are like the fast fashion company Boohoo, which was very strong during the pandemic only to suffer a drop in profit before tax of 94 percent in the last quarter as shoppers decided to buy with more sustainable thinking. Smaller players like Missguided, which went bankrupt this week, bear the brunt of changing shopping habits.

More than News

Investors are also beginning to research fashion companies for sustainability. Triodos Investment Management, the investment arm of Triodos Bank, is one of the leaders in this arena: not only does it have strict minimum standards and necessary transition topics for companies in which it invests, but it also requires their core business models to be sustainable and measured by specific performance indicators .

Investors are increasingly looking for companies that are positioned to make the most of opportunities in the post-transition economy. Triodos has selected several industry leading examples: VF Corp, the parent company of North Face and Timberland, for its use of recycled materials and repairable clothing, and Kering for its focus on durable components and support for sustainable startups in its supply chain.

Another key aspect is the used clothing market. GlobalData has found that the clothing resale market is growing 11 times faster than traditional retail, while projections show it will be worth about $ 84 billion by 2030, more than double the fast fashion industry.

Movements like Etsy’s $ 1.6 billion purchase of Depop platform show that larger corporate players are taking the trend seriously. Spinning themes, such as the Rent the Runway clothing service, are also heavily traded.

The lack of sustainability progress in the fashion world is starting to catch up. If companies do not move quickly, they will lose the support of both investors and buyers.

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