The fashion industry is facing increasing scrutiny over its environmental impact, and the Fashion Charter’s latest progress report has highlighted the significant challenges still faced by companies in this sector. While the report focused primarily on companies’ disclosure practices and climate goals, it also highlighted worrying discrepancies in their emissions levels and reduction strategies.
The Fashion Charter stressed the importance of achieving 100% transparency among all signatories, particularly in relation to Scope 3 emissions reduction and supplier engagement. However, more than 50% of signatories did not provide sufficient information for the report or have not set suggested climate targets. The representative noted that though these findings may be concerning, the global CDP database indicated the apparel sector was largely behind in terms of transparency, compared to most other industries.
The report highlighted that while 99% of signatories calculate and report all three scopes of emissions, only half have verified their Scope 1 and Scope 2 emissions via a third party, while just 20% have verified their Scope 3 emissions. This discrepancy is significant, as the CDP estimates that Scope 3 emissions are, on average, 11 times higher than Scope 1 and 2 emissions combined.
Of particular concern is that only a small fraction of companies have managed to reduce their overall emissions intensity. The Fashion Charter found that only seven signatories claimed to have reduced their emissions by at least 30%. This highlights the need for direct action to effectively manage and reduce the carbon footprint of the fashion industry.
One positive note was that from 2020 to 2022, the number of signatories committing to using 100% renewable energy in operations by 2023 had increased from 18% to 42%. However, the report noted that a company’s operational energy consumption represents only a fraction of its total emissions. In addition, almost a third of signatories reported that their energy consumption has doubled in the past three years, indicating the importance of prioritizing renewable energy sourcing.
Supplier engagement is identified as an essential tool for reducing Scope 3 emissions, and signatories have seen a 20% increase in supplier engagement. The report noted that 24 out of 93 companies included climate-related requirements in their supplier contracts in 2022, showing that progress is being made. However, the Fashion Charter did not provide a singular definition of what it means by “supplier engagement”, leading to questions about what this engagement actually entails.
The lack of financial support from brands to help suppliers meet these sustainability requirements is significant, as suppliers consistently report that brands do not prioritize sustainability. The report also indicates that cross-sector collaboration is key to addressing the significant challenges raised by climate change. The transition to a net-zero economy will require unprecedented levels of cooperation and collaboration from companies within and outside the industry. To accelerate this transition, fashion corporate leaders must step into the public discussion and political debate, and work with stakeholders across all areas of society to make the case for policy ambition.
In conclusion, the Fashion Charter’s report shows that while progress has been made in terms of climate goals and disclosure practices, there are still significant challenges to be addressed within the fashion industry. Achieving 100% transparency among all signatories is crucial, as is direct action to reduce the carbon footprint of the sector. Ultimately, cross-sector collaboration will be essential to achieving a net-zero economy and addressing the long-term ecological and social challenges this industry faces.
