In a stock exchange disclosure detailing the new sustainability programme, Primark-owner Associated British Foods Plc (ABF) says commitments include all clothes being made using recycled or more sustainably sourced materials, halving carbon emissions across the value chain, and pursuing a living wage for workers in its global product supply chain by 2030.
ABF adds Primark’s sustainability transition will lead to “only a modest increase” in costs in some areas of the business (net of mitigating actions) over the period to 2030.
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By GlobalData“We are confident of Primark’s ability to mitigate those increased costs without any material impact on its operating profit margin in the short term and without any significant movements in the margin over the longer term. Additionally, the group believes that Primark Cares is an opportunity to drive further sales growth from both existing and new customers.
“The group recognises the importance of transparency and accordingly will report on progress against the Primark Cares strategy as part of its regular ESG reporting.”
Specifically, the new strategy commits the international fashion retailer to change the way its clothes are made without changing its affordable prices, enabling everyone to make more sustainable choices when shopping.
Primark’s new commitments will see the company ensure all its clothing is made from recycled or more sustainably sourced materials by 2030 – today this accounts for 25% of all clothes sold. As a next step, all men’s, women’s and kids’ entry price point T-shirts will transition to being made with sustainably sourced cotton over the next year.
Primark will also make changes to its design process as it looks to ensure its clothes can be recycled at the end of their life to help reduce fashion waste. It is also committed to improving the durability of its clothing so it can be loved and worn for longer, including working to define new industry guidelines on durability with WRAP, the UK charity committed to accelerating the fashion industry’s move to circularity.
“This is a new and exciting chapter in the Primark story. Our ambition is to offer customers the affordable prices they know and love us for, but with products that are made in a way that is better for the planet and the people who make them. We know that’s what our customers, and our colleagues, want and expect from us,” says Primark CEO Paul Marchant.
“This isn’t the start of our journey. We’ve been working to become a more sustainable and ethical business for over ten years. One in four of all the clothes we sell already come from our Primark Cares range of products made from recycled or more sustainably sourced materials. Our new commitments mark a significant acceleration in the pace and scale of change, requiring us to think differently about how we do business. Right from how our clothes are designed and manufactured, through to how we sell them in stores.
“We don’t have all the answers and we know we can’t do it alone. We’re committed to work in partnership with the industry to drive real change at scale.”
The new strategy builds on the work Primark has undertaken over the last ten years. Informed by experts from across the industry, it covers Primark’s own operations, as well as its global supply chain. The strategy expands on commitments the business has already made as a signatory to major industry initiatives. These include Textiles 2030, the WRAP initiative to accelerate the fashion and textile industry’s move towards circularity and system change in the UK. The business is also a partner of the Ellen MacArthur Foundation to inform its journey towards circularity, including making all its clothes recyclable by design.
Alongside changing the way its clothes are made, Primark will work with its suppliers to cut carbon emissions by half throughout its value chain, contributing to industry level transformation. It will also eliminate single-use plastics in its own operations, building on the more than 500m items removed already.
The retailer will also expand its Sustainable Cotton Programme and train farmers to use more regenerative farming practices, building on sustainable practices such as using less water and fewer chemicals. This will be done through its partnership with CottonConnect, using the industry-leading REEL Regenerative Code to enhance biodiversity, adapt to climate change and improve farmers’ livelihoods.
In addition, Primark will build on its established ethical trade initiatives and existing partnership with ACT to improve the lives of the people who make its clothes by pursuing a living wage for workers in its supply chain and investing in programmes that provide greater opportunities for women.
The business plans to report annually on its progress.
Investor focus
Patrick O’Brien, UK retail research director at GlobalData, says it was “notable” the announcement was aimed at investors and not consumers.
“It is logical though, as investors are the ones who are driving companies to be more sustainable in order to meet their own sustainability criteria, rather than shoppers.
“While surveys reveal it to be a growing area of consumer concern, there is scant evidence that, for the moment at least, sustainability and other ethical concerns are usurping price as the key purchasing driver. The continued sales growth of Boohoo despite revelations of its supply chain issues and the meteoric rise of the highly secretive, but suspiciously cheap fast-fashion retailer Shein, show that climate change does not equal consumer change…yet. Retailers though are rightly wary of climate change becoming a much more decisive issue with consumers in the years to come, with rental and, more importantly, resale fashion starting to gain traction.
“Like climate change itself, leaving it too late to start making changes to supply chains is not a good idea when the tipping point may be reached soon.”
Yesterday (14 September, Primark issued an update on its fourth-quarter sales saying they were affected by the impact on footfall as a result of the changes in public health measures in its major markets to control the spread of Covid-19 and its Delta variant in particular.
