Fashion is big on climate commitments, UN says, but action lags

To receive the Vogue Business newsletter, sign up here. Fashion has made some progress in reporting on its climate commitments in the last two years, according to the United Nations Fashion Industry Charter for Climate Action and CDP, who released their 2023 progress report this week. However, the report stops short of exploring the progress the industry has made in delivering on the sustainability goals established by the Paris Agreement, highlighting the discrepancy between climate reporting and action. The industry needs “faster acceleration of actions and scaled collaboration”, the report says, which calls on Fashion Charter signatories to engage more with suppliers, and with each other, and ramp up efforts to reduce Scope 3 (supply chain) emissions, among other steps, in order to ultimately be able to halve emissions by 2030. The Fashion Industry Charter for Climate Action was founded in 2018 to map out the route to achieve net-zero emissions by no later than 2025 and keep global warming below 1.5°C. Major luxury companies such as Kering, Burberry and Hugo Boss are among 99 apparel brands and manufacturers who have signed the charter. “Going forward, it is essential for the industry as a whole to strategically align actions both among companies and supply chains but also within the supporting ecosystem, to lay the groundwork now for what is needed to happen in the industry this year, by 2025 and what 2030 necessitates: cutting emissions across the board and transforming the sector towards a renewable and net-zero future aligning with the resilient 1.5°C pathways,” the report says. The report, published this week, suggests that the Fashion Charter is driving some of the progress it was founded to achieve. Signatories perform higher on common climate change disclosure KPIs than the industry average, it says, with 45 per cent of signatories having publicly set climate targets in line with the 1.5°C target, for example. The report comes a week after the UN Intergovernmental Panel on Climate Change (IPCC) published its latest report, which said that the world still has a chance to achieve a 1.5 degree pathway — but that the window of opportunity is closing quickly. The takeaway for the fashion industry, which has already been facing growing pressure to reduce its environmental impacts, is that it needs to act with much greater scale and speed. However, the Fashion Charter’s report focuses more on companies’ climate goals and disclosure practices than on their actual emissions levels or scrutinising strategies for how or whether they can realistically meet their targets — a trend that many progress reports have been criticised of. The Fashion Charter told Vogue Business that the main message its report aims to convey is that 100 per cent transparency must be achieved by all signatories reporting their progress to the Fashion Charter (particularly on Scope 3 emissions reduction and supplier engagement) and that all signatories must adhere to the commitments laid out in the charter. A representative for the Fashion Charter said that the analysis focused on the primary data provided by signatories. More than 50 per cent of signatories did not provide sufficient information for the report or have not set the suggested climate targets. “We’ve seen in our global CDP database that the level of transparency, participation and engagement from the apparel sector at large is far below most other industries. More specific analysis against other non-signatory apparel companies can be considered for future analysis,” the representative said in an email to Vogue Business. While 99 per cent of signatories calculate and report Scope 1 and Scope 2 and Scope 3 emissions, only half of signatories said their Scope 1 and Scope 2 emissions are verified by a third party and 20 per cent have verified their Scope 3 emissions. The CDP (formerly the Carbon Disclosure Project) estimates Scope 3 are on average 11 times higher than Scope 1 and 2 emissions combined. Only a small fraction of companies have achieved actual reduction of emissions intensity: seven signatories in total said they reduced overall emissions by at least 30 per cent. From 2020 to 2022, the number of signatories that have set a target to use 100 per cent renewable energy in operations (across Scope 1 and 2 emissions) by 2023 has increased from 18 to 42 per cent. A company’s own operations represents only a fraction of its total emissions, however — and nearly a third of signatories reported that their energy consumption even in these scopes has doubled in the past three years, pointing to a greater need for renewable energy sourcing. The Fashion Charter says supplier engagement is essential to reduce Scope 3 emissions. Signatories have seen a 20 per cent increase in supplier engagement, the report says, and in 2022, 24 out of 93 companies said they included climate-related requirements in their supplier contracts. However, the charter did not provide signatories with a singular definition of what it means by “supplier engagement” and rather said it can include “primary data collection, engagement through education, campaigns and initiatives, or collaboration with suppliers”. The report also did not track whether companies provided any financial support to help suppliers meet those requirements. That’s significant, as suppliers consistently say that brands often don’t put their money where their mouth is when it comes to prioritising sustainability. Around a quarter of signatories have reported engaging with policymakers on climate-related issues and influencing policy, law or regulation. In addition, the report says there has been an increase of almost 30 per cent in signatories reporting board-level oversight of climate-related issues, and almost all signatories said that climate-related issues are the responsibility of C-suite level executives. The report calls for cross-sector collaboration. “Transition to a net-zero economy is not going to be easy and will need unprecedented levels of collaboration both within and outside the industry. To accelerate the transition, governments need to deliver clear and ambitious policy frameworks,” the report reads. “For this to happen, fashion corporate leaders must step into the arena of public discussion and political debate, and — together with stakeholders across all areas of society — clearly and confidently make the case for policy ambition.” With additional reporting by Rachel Cernansky Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Richemont digital platform targets theft of watches and jewellery Prada steps up production capacity with 400 new hires PVH beats expectations and forecasts return to revenue growth

Make better business decisions

Make better business decisions