Consumer industries are straining the use of natural resources and impacting biodiversity while planetary resources such as water and land are limited. Optimising resource efficiency and minimising the use of natural resources are crucial for the industry to operate within planetary boundaries, bearing in mind that there is only one decade remaining to avert the effects of climate change that beholds unprecedented challenges for our planet and its inhabitants.53
Today energy is cheap in comparison to the environmental impact of fossil fuels, but according to the European Commission, prices are already rising.54 In the future, an increase in demand and the introduction of carbon taxation could further drive up the cost of energy derived from fossil fuels. Clean drinking water, sanitation and water for crops will become increasingly scarce,55 Today, over two billion people live in countries experiencing high water stress.56 The unavailability and lack of access to clean water has further exacerbated the spread of COVID-19, as precautions cannot be met, leading to more pronounced inequality.57
Fortunately, the untapped potential for more efficient use of water and energy in textile processing is substantial and by now, considered as table stake. On average it has been shown that textile processing mills can cut water use by 11% and energy use by 7%, with a return on investment within nine months.58 Reducing the use and release of hazardous chemicals in textile and leather processing, including dying processes, will help improve the health of workers and reduce the impact on the environment. Enhancing water and energy efficiency, as well as chemical usage, has the potential to increase a fashion company’s EBIT margin up to 2-3 percentage points by 2030.59
By making more informed business decisions through increased transparency, businesses can mitigate negative impacts on the planet and workers along the value chain and strive to recapture value from materials considered as waste. Brands are urged to utilise traceability tools to enhance their understanding of potential ramifications for climate and biodiversity, illuminating consequences such as deforestation and pollution. European policymakers are expected to support brands in this process by providing necessary tools for increased traceability such as product passport tagging and watermarks.60
Looking at the fashion value chain, the activities with the largest impact on climate, water and chemical pollution can be found in the processing stage, which includes the preparation of fabrics such as spinning, weaving or dying.61 Thus, this stage represents a high priority for immediate action, from chemical tanning of leather to denim processing. Although leading fashion brands and suppliers have already made progress in this area, a large gap persists between top and bottom performers.62
Recent years have seen industry players coming together to invest in scaling efficiency programmes in processing stages. However, there is still significant potential for improvement for many companies, and this priority remains a low-hanging fruit for environmental and financial efficiency gains.63 If the industry continues to embrace current decarbonisation initiatives at the current pace, emissions will be capped at around 2.1 billion tonnes a year by 2030, around the same as they are now, leaving levels at nearly double the maximum required to meet the Paris Agreement.64
Brands and suppliers are urged to work collaboratively to drive large-scale impacts along the processing stage and avoid duplication of efforts. We encourage industry leaders to work closely with supply chain partners by identifying and tracking water and energy consumption and chemical pollution in the processing stages to create industry-wide baselines and identify hotspots to inform key opportunities for intervention that focus the industry’s resources effectively and efficiently. A substantial focus for all industry players must include a re-evaluation of the usage of natural resources such as water or virgin raw materials. Companies should then implement and scale efficiency programmes and renewable energy sources in collaboration with manufacturers, industry initiatives and their peers that reduce the consumption of all three resources and minimise pollution in processing stages. While reducing the consumption of chemicals, companies should also leverage supply chain relationships to drive the substitution of hazardous chemicals with less harmful alternatives. Investing and implementing sustainable water management is a crucial step to mitigate water scarcity, protect biodiversity and provide safe drinking water and sanitation for producing communities.
Frontrunners should review their progress to date and implement measures to increase the efficient use of resources throughout the whole value chain, from the sourcing of raw materials to retail and consumer use, in order to reduce their environmental footprint further. In addition, they should work with other players along their value chain to drive innovation and implement programmes that reduce greenhouse gas emissions, e.g. by switching to renewable energy resources, promoting land restoration or investing in sustainable land management practices. They should also support regenerative agriculture practices that can help restore soil and contribute to decarbonising the planet. It is estimated that 30% of the need for climate action can be met through nature-based solutions such as regenerative agriculture.65 Thus, the fashion industry needs to embrace more comprehensive systemic change and scale up low-carbon and nature-based solutions. Setting science-based targets in the areas of climate and biodiversity can support companies in understanding impact areas and taking targeted action.
Governments and financial institutions play a critical role in advancing these transitions by providing supportive legal frameworks and incentive structures, as are supranational initiatives such as the United Nation´s Fashion Industry Charter on Climate Action that was launched at COP24 bringing brands together to work on achieving net-zero emissions in the sector by 2050.66