“We don’t know what fuels fashion” – Fashion Revolution reports lack of transparency

According to a new report by non-profit Fashion Revolution, the world’s largest fashion brands are not working fast enough to cut fossil fuels. “What Fuels Fashion?” (WFF) urges those brands to invest at least 2 percent of their annual revenue into a Just Transition away from fossil fuels to renewable energy to power their manufacturing sustainably.

“Instead of investing in a fair transition away from fossil fuels like coal to renewable energy sources like wind and solar to power fashion’s supply chain in a clean
way, fashion brands are shifting the costs onto the factories they work with; burdening workers and communities with fixing a problem they didn’t create,” states the report.

WFF is a special edition of the organisation’s annual Fashion Transparency Index. It analyses and ranks 250 of the world’s biggest fashion brands and retailers (meaning they have a turnover of 400 million US dollars or more) based on their public disclosure of climate and energy-related actions along five areas: accountability, decarbonisation, energy procurement, financing decarbonisation and just transition and advocacy; covering 70 data points in all. The in-depth report concludes with recommendations for future actions. Following are the key findings.

Climate change

While extreme weather could cost the fashion sector nearly one million jobs in the future, most big fashion brands are not protecting their supply chain workers — only seven brands (3 percent) disclose efforts to financially support workers affected by the climate crisis.

“This is critical given the weak social protection in garment-producing countries and the poverty wages and high debt levels of these workers. Frequent climate events like heat waves, monsoons and droughts are devastating their livelihoods. … Big fashion must urgently provide compensation mechanisms for these workers, not as charity but as a matter of justice,” says Fashion Revolution.

Similarly, the industry is also lagging “significantly” in achieving climate targets and reducing emissions: A majority of companies (86 percent) lack a public coal phase-out target, even more (92 percent) a public renewable electricity target for their supply chains and almost all (94 percent) a public renewable energy target.

Less than half (43 percent) of the brands surveyed are transparent about their energy procurement at the operational level, and even fewer (10 percent) at supply chain level. Additionally, no major fashion brand discloses hourly matched supply chain electricity use. “As a result, big fashion’s zero-emissions claims may be disconnected from grid realities, creating a false sense of progress against climate targets,“ warns the report.

Accountability

When it comes to numbers, one is the industry’s best kept secret: How many clothes brands and retailers produce annually — only 11 percent disclose it; 89 percent do not, thus evading accountability for churning out excessive amounts of clothing and the associated emissions released into the atmosphere.

“Alarmingly, nearly half (45 percent) fail to disclose neither how much they make nor the raw material emissions footprint of what is produced, signalling the industry prioritises resource exploitation whilst avoiding accountability for environmental harms linked to production. The fashion industry wants to have its cake and eat it too,” is Fashion Revolution’s sobering conclusion.

Decarbonisation

Nearly one quarter (24 percent) of the brands and retailers surveyed for the report disclose nothing on decarbonisation – signifying that the climate crisis is not a priority for them. Like overproduction, the industry’s prioritisation of short-term profit is at odds with supply chain decarbonisation. “A clean, fair and just energy transition must be driven by fashion embracing long-term supplier relationships and financial investments through fair purchasing practices,” states Fashion Revolution.

The organisation points to vertically integrated brands and specialised segments like sportswear that outperform others as the report found due to greater leverage and commitment to long- term improvements. “The renewable energy transition in fashion hinges on systemic changes that prioritise collective brand action, responsible purchasing and investment in a stable supply base,” sums up the non-profit.

Another problem is that so-called ‘sustainable’ clothes may still be produced using fossil fuels: “The fashion industry’s climate impact has largely been scrutinised through the lens of the materials used in our clothes, rather than the manufacturing processes behind them,” points out the report. “While 58 percent of brands disclose sustainable material targets, only 11 percent reveal their supply chain’s energy sources.”

Suppliers need funding, not debt

Only about half (52 percent) of brands and retailers disclose their factory lists
and even fewer publish their processing facilities. However, it takes full supply chain traceability to accurately map the industry’s carbon emissions globally.

When it comes to supporting their suppliers’ transition away from fossil fuels to renewable energy sources, nearly all (94 percent) big fashion brands fail to disclose how much they are investing in supply chain decarbonisation. The 14 brands that do (6 percent) make contributions to joint climate funds like the Fashion Climate Fund and the Future Supplier Initiative, which offer supplier loans for infrastructure like solar panels.

“However, burdening suppliers with loans to meet brand’s climate targets is unfair and perpetuates existing power imbalances between fashion brands, their suppliers
and the people who make our clothes,” finds Fashion Revolution.

“We don’t know what fuels fashion because the vast majority – 95 percent of major fashion brands and retailers – are not upfront about what fuel is used in their supply chains,” is the sobering conclusion.

Highest and lowest scoring brands and retailers

Compared to last year’s Fashion Transparency Index, there is a difference when fossil fuels are made the focus – average scores drop and no brand reached more than 74 percent compared to the FTI’s 83 percent. While high scorer OVS has moved to the midfield, luxury brand Gucci manages to keep a high score (74 percent), only trumped by Puma at 75 percent. The midfield remains the midfield with H&M (61 percent), Champion and Hanes (58 percent each), Intimissimi (54 percent), Tezenis and Calzedonia (52 percent each), Decathlon (51 percent), Asics and Lululemon (50 percent each) and
Hermès and Adidas (49 percent).

The same tendency can be seen when it comes to the lowest scorers: While “only” 18 brands and retailers reached an FTI score of “0”; it is 32 brands or almost 13 percent in the WFF report, among them Aeropostale, Billabong, Bosideng, DKNY, Forever 21, Koovs, Max Mara, Metersbonwe, Mexx, New Yorker, Nine West, Quicksilver, Reebok, Saks Fifth Avenue, Savage X Fenty, Splash, Tom Ford, Tory Burch, Van Heusen and Youngor.

Recommendations

“What Fuels Fashion?” is a must-read for brands, retailers and anyone interested in achieving a Just Transition in the fashion industry. It is thus not about pointing fingers or feeling hopeless that much still needs to be done but rather about building a roadmap that connects treacherous areas and makes them navigable together so that the fashion industry can move from polluter to pioneer.

The report identifies four key areas to ensure significant progress in reducing greenhouse gas emissions:

• Transitioning the supply chain from coal and fossil fuels to renewable energy
• Producing fewer clothes
• Minimising the use of air freight
• Phasing out the use of synthetic materials derived from fossil fuels

But not only industry insiders can take action, citizens and consumers too: Fashion Revolution advises them to scrutinise the claims made by major brands and retailers and hold them accountable, calling on them to invest at least 2 percent of their annual revenues into their decarbonisation and Just Transition efforts, to work with their suppliers to ensure they are co-creating their decarbonisation targets and actions and on policymakers in both garment-producing and importing countries to push for renewable energy production and access.

The full report can be found on the Fashion Revolution website, including an A to Z list of brands from Abercrombie & Fitch to Zara, further reading in an extensive Reference section, viewpoints and illustrations.