The fashion industry finds itself at a crossroads, confronted by the pressing need for sustainability amidst the stark realities of climate change. Yet, according to a recent survey conducted by the Business of Fashion (BoF) and McKinsey, sustainability concerns have slipped from the minds of fashion executives, no longer ranking among the top five risks they face. As weather extremes continue to impact production, this prioritization shift raises serious questions about the industry’s commitment to environmental accountability.
Historically, fashion executives have recognized climate change as a significant concern. However, as they grapple with geopolitical and economic challenges, their focus has shifted. This could be seen as remarkably shortsighted, especially considering that much of the supply chain is located in areas vulnerable to climate-related risks. In reality, despite the rhetoric around sustainability, few brands have made significant progress towards their climate goals.
Why is this happening? The prevailing emphasis remains on generating sales and profits. With little accountability for failing climate targets, CEOs know that they risk their jobs if financial targets are not met. This leads to an ironic situation where lofty sustainability goals are set, but little is done to achieve them. Instead, brands pressure their suppliers to reduce emissions without providing the necessary support or resources.
Misaligned Focus
Many leading fashion brands lack a credible strategy for achieving their ambitious decarbonization targets. They often highlight initiatives such as the adoption of sustainable materials—like organic cotton or recycled polyester—but these solutions frequently serve as a distraction from more pressing issues. A report by consultancy firm Quantis reveals that raw materials comprise less than 15% of the fashion industry’s carbon footprint. Significant emissions arise in the processing, dyeing, laundering, and finishing stages of production.
It appears that brands find it easier and more marketable to promote these material innovations rather than tackle the complex and costly challenges associated with decarbonizing the entire supply chain. While promising technologies are emerging, such as new dyeing methods and electric boilers, these often require substantial investments and commitment from brands.
Navigating Structural Challenges
The fashion industry’s historical race to the bottom—that is, driving prices down by squeezing supplier margins—has left many suppliers crippled, unable to invest in greener technologies. This transactional model disincentivizes brands from shouldering the costs associated with decarbonization, creating a cycle of underinvestment in sustainable practices.
To tackle climate change effectively, the fashion industry needs a fundamental shift. Here are several strategies that could be employed:
1. Long-term Contracts: Many brands currently engage suppliers on short-term contracts, usually around 90 days. This unpredictability stifles suppliers’ ability to invest in sustainable technologies. Longer-term contracts with clear volume commitments would give manufacturers the stability needed to pursue these investments.
2. Improved Carbon Accounting: A lack of direct relationships between brands and the manufacturers that cause most of the carbon emissions undercuts collective climate action. If brands could fund emissions-reduction projects and claim the total benefits—rather than just a portion based on their share of production—they may be more willing to contribute financially.
3. Implementing Fashion Taxes: Current voluntary initiatives to transition supply chains often fall short in terms of funding. A more rigorous imposition of taxes on brand emissions could generate necessary funds for sustainable investments. For instance, if producing countries instituted a tax on each garment sold, the revenue could be used to assist suppliers in financing lower-carbon technologies. This approach could mirror Denmark’s innovative tax on livestock emissions.
Conclusion
The fashion industry’s current trajectory suggests a lack of urgency in addressing climate concerns, despite the profound risks involved. By transitioning to a framework that prioritizes accountability and sustainability, brands can not only enhance their long-term viability but also contribute meaningfully to combatting climate change. Revolving around impactful strategies such as long-term contracts, better accounting, and rigorous funding models, the industry can shift its focus from mere compliance to genuine progress.
The challenge is substantial, but with a cooperative and strategic approach, the fashion sector can lead the way in creating a sustainable future.
