The Corporate Climate Responsibility Monitor 2024 report evaluated the transparency and integrity of climate pledges of 51 major companies across different sectors and geographies, including five from the fashion industry.
The report, which was produced by the NewClimate Institute in collaboration with Carbon Market Watch, said it has “concerns about the feasibility” of Adidas, H&M Group, Inditex, Nike and Fast Retailing to meet “ambitious 2030 targets”.
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The report states: “The fashion companies implement measures to increase renewable electricity use in the supply chain, but also encourage suppliers to switch to biomass or natural gas, which are not credible decarbonisation options. None of the five fashion companies commit to reducing overproduction or moving away from the fast fashion business model.”
It added that moving away from a fast fashion business model would be critical
to “bring the fashion sector as a whole on a Paris-aligned trajectory”.
Plus, it noted that production of clothing doubled between 2000 and 2015 and consumers discard many items after just seven to ten wears.
For this reason, the report suggested that while electrification, switching to renewable energy and investing in innovative low-carbon materials are crucial measures, they should be underpinned by a shift to a more circular fashion system.
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By GlobalDataHowever, it claimed that none of the companies assessed set targets to reduce overproduction (i.e. clothes that are never sold) or to move away from their fast fashion business model.
“While we found some examples of repair, reuse and resale services, the fashion companies in this report implement these measures only at a small scale,” stated the report.
The report did admit there is an improvement in the five fashion retailers’ emissions disclosure and target-setting practices both for medium and long-term targets but added that it remains unclear to what extent companies’ measures will contribute to and be sufficient for achieving their targets.
The authors of report argued: “All the companies assessed mostly demonstrate awareness of what the key decarbonisation measures for the sector are. However, they present their planned measures in quite ambiguous terms.”
The report also said most of the fashion companies examined did reflect on the need for the fashion sector to become more sustainable in terms of resource use and greenhouse gas (GHG) emissions, which is important given a sustainable fashion industry will need to produce and sell fewer products.
Report calls out fashion brands on emission targets, overproduction
The report examined the sustainability claims made by the five fashion companies:
- Adidas
It stated German sportswear brand Adidas has implemented several promising measures for the decarbonisation of its supply chain, including to phase out coal and increase the use of renewables.
However, it added the company’s 2030 target is insufficient to be aligned with 1.5°C-compatible benchmarks for the sector, and its climate neutrality target
for 2050 is not yet substantiated with a clear commitment to reduce emissions across the value chain.
An Adidas spokesperson told Just Style exclusively that Adidas has set targets for 2025 and 2030 that will help the company limit emissions aligned with the 1.5°C benchmark and these targets have been approved by the ‘Science Based Targets initiative’ (‘SBTi’).
The spokesperson explained: “For the last year 2023, we reported a significant 24% reduction in total absolute GHG emissions including supply chain compared to the previous year. This effect is based on our innovation effort, that has also enabled us to use low-carbon manufacturing methods and materials, as well as decreased production volumes due to high inventory levels in the market.
“The average annual GHG emissions per product for 2023 decreased by 3% compared to the previous year. This reduction has been driven by the work done with our suppliers, such as continuing with the phase-out of coal in our manufacturing facilities and the increased use of renewable energy.”
2. H&M Group
The report claimed the majority of Swedish fashion retailer H&M Group’s emissions stem from fabric production, garment manufacturing and raw materials (92%).
It added that although H&M Group has ambitious emission reduction targets for 2030 and 2040, those may be undermined by the lack of a clear plan for implementing measures to achieve those targets.
The authors of the report claimed that over the past year they could identify only
minor changes to H&M Group’s sustainability strategy since its previous analysis of the case study in the 2022 Corporate Climate Responsibility Monitor so it said that only minor modifications were made to its case study in the new report.
An H&M Group spokesperson told Just Style that the company welcomes the report for recognising its climate efforts and strategy, and for evaluating the decarbonidation commitments of different companies from different sectors.
However, the spokesperson was keen to point out the data which H&M Group’s ranking was based on, comes from its Sustainability Disclosure for 2022, not the latest figures published for 2023.
“In 2023, we achieved a 22% reduction in scope 3 emissions from our 2019 baseline, excluding indirect use-phase emissions. This is indicating that we’re on track with our progress towards achieving our science-based targets.
“Additionally to the progress update published in our Sustainability Disclosure, we also recently published our comprehensive Climate Transition Plan, which provides detailed information about our efforts towards reaching our ambitious climate goals. H&M Group has been engaged in climate mitigation for years and we continuously push ourselves to demonstrate climate leadership within our industry. We are dedicated to keeping global warming within 1.5°C and having our climate goals firmly anchored with science. Our first priority is to reduce our absolute greenhouse gas emissions from scopes 1, 2 and 3 by 56% by 2030. Our ultimate goal is to achieve net-zero by 2040 and we follow the existing frameworks and climate target setting standards from the Science Based Targets Initiative (SBTi) to get there”.
3. Fast Retailing
Most of the emissions from Japanese fashion retailer and owner of Uniqlo are said to stem from materials sourcing and manufacturing in its supply chain (95%). To
tackle these emissions, the company facilitates suppliers to develop emission reduction plans, but the report claims it discloses few details on the goals and ambitions of these plans.
It added the company’s 2030 emission reduction targets falls far short of what is needed to limit global warming to 1.5°C.
The authors of the report could identify only minor changes to Fast Retailing’s sustainability strategy from its previous analysis of the case study in its 2022 Corporate Climate Responsibility Monitor so it said that only minor modifications were made to its case study in the new report.
Fast Retailing had not responded to Just Style’s request for comment at the time of going to press.
4. Inditex
The report describes Spanish fashion retailer, which owns Zara as the biggest fast fashion group in the world by revenue, with $34.2bn in 2022.
It explained that most of its emissions stem from its supply chain, especially those related to the sourcing and processing of raw materials. Inditex’s pledge for net-zero emissions by 2040 implies an ambitious 89% emission reduction below 2019 levels, which is aligned with 1.5°C benchmarks for the sector. However, the sufficiency of Inditex’s emission reduction measures to meet the company’s ambitious targets remains unclear.
Inditex had not responded to Just Style’s request for comment at the time of going to press.
5. Nike
The report noted that, like other large fashion retailers, US sportswear brand Nike’s emissions stem mostly from its supply chain, especially from
sourcing materials and manufacturing.
Its most prominent emission reduction targets imply a 41% reduction by 2030 below 2019 levels, which is almost aligned with 1.5°C compatible benchmarks for the fashion sector.
However, the report said it remains unclear to what extent Nike’s proposed measures will be sufficient to achieve its targets.
Nike had not responded to Just Style’s request for comment at the time of going to press.
Key actions and measures for the fashion sector
The report outlines a number of actions and measures for the fashion sector to carry out in order to hit the required carbon reduction targets and improve sustainability overall:
- Commit to lower-GHG material sourcing targets, including recycled fibres and preferred cotton while specifying the GHG-performance of both traditional and alternative products sourced
- Invest in innovative alternatives such as biosynthetic fibres and cotton alternatives to accelerate their development
- Support suppliers to implement sustainable farming practices to increase the GHG-efficiency of production
- Commit to 100% renewable electricity in the supply chain
- Invest in energy efficiency measures, particularly to reduce their need for thermal energy in tier 2 processes
- Commit to phase-out coal from value chain, replacing it with renewable heat (such as CSP), or through the electrification of key tier 2 processes
- Set reduced overproduction targets and policies to stop discarding new products
- Set resale, repair and recycle programs with meaningful and clear targets.
