Fashion Emissions and Circularity Strides Vary

May 02, 2023

Fashion has corralled around sustainability but progress reports, industry alignment and policy aims are still at a mismatch. And while trade groups and brands may outwardly belly support for policy, the calls-to-action may conceal internal budget deficits.

"I think we should cautiously be optimistic about this progress and hold companies accountable, but also see that there's really big commitments happening," said Michael Sadowski, freelance strategy consultant on climate change and circular businesses. "There's a lot of strong action happening in the apparel sector. A key element of that is you have many more manufacturers that are engaged in this process now. And that's through the work of [Apparel Impact Institute] and others — but I think this is exactly what the Science Based Targets Initiative [SBTI] should result in."

Sadowski coauthored Aii's recent 2023 update to its widely cited "Roadmap to Net Zero" report. The roadmap taps data from industry sources such as the Sustainable Apparel Coalition, Higg (now Wordly) and Textile Exchange, among others, to develop a best estimate of sector emissions and help fashion align with a 45 percent emissions reduction by 2030, and net zero ambitions by 2050.

Most notably, the latest report reset the emissions baseline for fashion. In its 2019 roadmap, Aii and the World Resources Institute estimated the industry emitted 1.025 gigatonnes of carbon dioxide equivalent (CO2e), or roughly 2 percent of annual global greenhouse gas (GHG) emissions. Aii's newest roadmap finds that fashion emitted an estimated 897 million tonnes of carbon dioxide equivalent (CO2e) in 2021 — which is 1.8 percent of global GHG emissions, or an increase of 0.87 percent when adjusted for key assumptions.

Along with a revised sector emissions estimate, Aii's latest roadmap points to the need for verified science-based targets (with more than 400 apparel companies represented today) and continued efforts to decarbonize apparel.

"We’re clear in the report that this should not be held out as the definitive number because it is the best estimate that we have, but we feel it's a reasonable sense for the emissions of the sector," Sadowski said. While celebrated, he underscored that progress must be better and faster.

Aii used estimates from Textile Exchange's "Preferred Fiber and Materials Market Benchmark" (October 2022), and insight from Textile Exchange and the SAC, to inform its new sector emissions baseline. The previous Roadmap cited approximately 66 percent of all fibers used in apparel. While polyester usage, for one, has actually gone up in recent years, Sadowski said Aii's latest report assumes that only 55 percent of polyester use went to apparel. He said that allocation change (reflected in not just polyester but all fibers) reduced the emissions. "What's important is that we’re getting more precise over time with the apparel sector impact," he added.

Trade groups have consistently strived to improve data collection in the industry. Beth Jensen, impact director at Textile Exchange's Climate+ program, told WWD that Textile Exchange makes assumptions on sector fiber use based on "multiple data sources," including industry organizations, market reports, Textile Exchange supplier-based data and stakeholder consultation. Where a range is published, the organization takes a "conservative" approach.

WWD asked Jensen if the organization endorses Aii's apparel value chain emissions estimates. "We worked with Aii to ensure alignment on the methodology and assumptions used for the calculations specifically for this part of the supply chain," she said. "While we can't comment on the calculations used for the other tiers, we believe that Aii has utilized the best available data and methodologies to arrive at this total emissions estimate for tier 4."

Jensen said Aii's tier 4 estimates will, however, be reflected in Textile Exchange's Climate+ strategy in fall 2023, in the organization's annual GHG impact report. WWD also reached out to the SAC, on its contributions, but did not hear back as of publication time.

Circularity progress reports still paint another picture of fashion.

On Monday, global consulting firm Kearney released the third edition of its Circular Fashion Index ranking 200 fashion companies on a scale of one to 10 ("10" being the highest) in regard to their progress toward circularity. The top five firms spanned Patagonia, Levi's, The North Face, OVS and Gucci. Kearney's top five scorers remained the same as last year, with "increased promotion and communication of circularity" and public disclosure of its supplier map, in the case of Levi's, buoying placement. The report concluded that "while [circularity] solutions are there, adoption is not."

"Europe is ahead when it comes to regulation, but five of the top ten brands in the report were based in the U.S.," according to CFX coauthor and Kearney partner Brian Ehrig. Along with resale, Ehrig said Kearney saw more brands talking more about their collection efforts, citing Madewell's take-back program and Coach's upcycling efforts at Coachtopia, as examples.

"The initial aim when we started this three years ago was to track progress. The first year we rated the industry a two out of 10. Now, it's a three out of ten. What happens with this report is it gets conversations going and it helps to expose — in a positive way — what some of the best practices are. I think there is a lot of energy within the fashion and luxury space to make an impact in this area."

Evidence points to little consistency across sustainable fashion rankings. One March scorecard from nonprofit Stand.Earth ranked fashion firms H&M, Levi's, Puma, Asics and Eileen Fisher as the top "Fossil Free Fashion" firms out of a total 43 companies. Meanwhile, human rights watchdog Remake ranked Burberry, Everlane, Levi's, Reformation and H&M Group as the top scorers in transparency out of 58 firms. Circularity is only one "component" of a bigger sustainability picture, in Ehrig's words, thus a leader in transparency doesn't necessarily warrant a leader in decarbonization.

"For sure, there could be greater alignment," Ehrig noted. "There have been many attempts to make it happen. I hope that eventually we will get there. There will be a single way to measure circularity."

Trade groups have taken bold stances as circular clothing policy — such as that of the European Union — progresses.

Earlier this month, The Policy Hub — a convening organization for 700 industry members (or roughly half of the industry) including Adidas, Bestseller, C&A, H&M Group and more — released its own circular paper. The Policy Hub spans Sustainable Apparel Coalition, the Global Fashion Agenda, Federation of European Sporting Goods and Textile Exchange. The paper was published by consulting firm Eunomia, showcasing The Policy Hub's recommendations for European extended producer responsibility, or EPR.

The paper follows the jurisdiction in the "Threads" protocol from the American Apparel and Footwear Association and the Council of Fashion Designers of America to vocalize "harmonized" sustainability demands for policymakers. Any policy not meeting the Threads framework — credentials like "realistic timelines" or "science-based" metrics — would not be supported by the trade groups.

Policy has become a red herring, of sorts, according to Kearney's Ehrig, without clear action. "Brands need to take more ownership out of this end-to-end cycle and not expect that regulation or legislation will do that for them," he said.

Policy takes time and the rest requires money. "Fashion companies generally have a minuscule, if any, budget to do R&D," Ehrig continued. "Companies need to start setting a budget to start innovating and work on recycled collections and build out their ecosystems with recyclers, yarn spinners, etc."

WWD asked what percent of revenue would reflect an ambitious R&D budget, to which Ehrig didn't have a set number. "This could be done with a really small team. It's not that you need that many incremental people, but you need it to be embedded."

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