Regenerative Practices: The Path to Carbon Negative

The fashion industry’s carbon footprint is relatively low, compared to other industries. But more can, and must be done, to meet consumers’ expectations and needs.

 

The world has set itself the objective of reducing its carbon footprint through a plethora of initiatives. From the Paris Agreement[1] to the EU Green Deal[2], it is the only sensible thing to do given today’s climate impact. But with the complexity and scope at hand, these goals seem hard and unreachable, particularly for companies and entrepreneurs well aware of the intricacies of the modern-day supply chain.

This way of thinking is only natural, especially if we look at the global problem as a whole. However, we have all been afraid of seemingly insurmountable journeys, that once dissected, became more digestible, and actionable. Climate change is no different.

If the fashion industry aims to reduce its carbon footprint, effectively, it will have to: first, begin at the source, re-evaluating the primary materials used at home; second, float domestic sustainability into its upstream operations; and third, reach and pivot on its intended audiences. Here, we propose two measures for each of these three strategies.

 

Of Fashion & Footprints

The fashion industry is responsible for more than 75 million jobs[3] worldwide and accounts for 2% of global GDP, roughly 3 trillion USD.[4] Consequently, the networks involved are vast and complicated, resulting in various stakeholders – from investors and inventors to manufacturers and merchants, and of course, consumers. With greater economic scale comes greater responsibility vis-à-vis the global community, especially regarding its environmental footprint.

A 2020 study by consultancy McKinsey estimates that almost 4% of GHG emissions originate from the industry, equivalent to the combined annual levels of France, Germany, and the United Kingdom. Without a stronger effort by market players, it is set to fall short of green initiatives, missing targets set in Paris and Brussels, by more than double.[5]

The fashion industry’s emissions and environmental impacts occur from beginning to end – from material sourcing, such as cotton fields, to end-of-use product cycles, such as landfills. It is no secret that to produce the world’s wardrobes, materials need to be harvested, sorted, processed, manufactured, and distributed. Most of the synthetic fibers used in fashion are derivatives of petrochemicals. While traditionally farmed natural fibers, like cotton, require vast amounts of water, fertilizers, and pesticides to support production. To give context to the magnitude, conventional – that is fossil fuel fuelled, and unrecycled – yarn preparation (28%) and dyeing and finishing of apparel (36%) make up two-thirds of a new garment’s footprint. [6]

Fortunately, there are sustainable trailblazers setting the example for their peers. In fashion, high-end luxury brand sources organic cotton, ECONYL® regenerated nylon, and post-consumer recycled materials for leather production, resulting in 24x less environmental impact. [7]

Other examples include Patagonia and Reformation renewable and recycled raw materials for their products,[8]  and Healthy Seas, which gathers ghost fishing nets from the oceans, and, together with its partners, monetizes waste into new, reusable, and recyclable resources.[9]

Despite these valiant efforts, one alone cannot save the planet. Market synergies must be harnessed, and supply chains optimized, for the fashion industry to rise and be a champion of sustainability.

A Not-So-Fashionable Supply Chain

Over 70% of fashion’s emissions come from upstream activities, particularly energy-intensive raw material extraction, production, preparation, and processing. The remaining 30% are generated by downstream activities such as transport, packaging, retail operations, usage and end-of-use, including pre- and post-consumer waste. Together, these account for more than 2 billion tons of CO2, equivalent to the combined emissions of Japan, Germany, and Saudi Arabia (2020 levels).[10], [11]

Fashion brands that fail to reduce their environmental footprint ought to think twice as today’s customers are holding companies more and more accountable for their actions. A consumer survey by the Nuclear Energy Institute reported that over 50% of shoppers want the fashion industry to follow more sustainable practices, and 88% believe that more attention should be paid to reducing pollution.[12]

Most importantly, in a post-lockdown world, consumers have already begun changing their behaviors. In a following study, 57% of respondents have made significant changes to their lifestyles to lessen their environmental impact, and more than 60% report going out of their way to recycle and purchase environmentally friendly products.[13]

 

Row, Row, Row Your Boat – Sustainably

Supply chains are the rivers of the world that replenish the global economy. Just like a river’s journey, delivering on sustainably starts at the source and flows up stream – until it finally reaches its intended shores and people.

 

1: Starting at the source

If fashion brands wish to reduce their environmental footprint, they must start at home first. Hence, this set of measures consists of in-house renewable renovations, both physical and digital.

Firstly, according to the World Resources Institute and the Apparel Impact Institute, a key approach to reduce the GHG emissions from raw materials is to increase the use of existing sustainable fabrics.[14] Brands ought not go as far as interchanging one type for another, for example cotton with polyester. Rather, it will be sufficient that they substitute within material types, for example conventional with recycled polyester (Figure 1).[15]

Figure 1: Substitute to reduce your impact (CO2 tonnes)

Source: World Resources Institute, and Apparel Impact Institute

 

Secondly, new tech and digitization can buffer shocks induced by supply-chain inefficiencies.[16] This is especially true in the case of lean manufacturing, digital energy management systems, automation, and mass customization.

According to Statista, the fashion e-market place alone is projected to reach nearly USD 1 trillion in 2022, with an annual 11.19% growth rate for the 2022-2025 period.[17] These projections exclude innovations such as the metaverse, which can revolutionize fashion shows by tearing down entry barriers and lowering costs for the non-behemoths.[18]

 

2: Flowing sustainable fashion, upstream

There are two cardinal ways brands can float sustainability into upstream operations: incorporate circular economics (CE) in business models and revamp energy sources.

A circular fashion industry is founded upon a regenerative system, one in which products live until their maximum value, and are ultimately rejuvenated by the system. It is ecosystemic, as it involves all players up and down the value chain, and it prioritizes rights and equity for everyone, creating new opportunities for growth and capitalization.[19]

These pioneers do not over-capture nature’s resources for their operations, rather they pivot on what is available. The innovators mentioned before – Stella McCartney, Patagonia, and Healthy Seas – have made this principle a fundamental guide to business decisions when choosing recycled versus new materials for their products.

This also means shifting to renewable energy sources in upstream operations. Manufacturers and fiber producers can deliver 61% of the accelerated abatement by decarbonizing material production and processing, and minimizing manufacturing waste, which has the potential to cut roughly 1 billion metric tons of emission by 2030 (Figure 2).[20]

Figure 2: Reducing upstream impact

Source: McKinsey & Company

 

To mitigate their footprint, players will have to shift to 100% renewable electricity, and think outside the box with their energy mix sources because, as Bob Dylan loves to remind us, the times they are a-changing.

Regarding the shift towards full-renewable sources, unfortunately there are still macroeconomic fundamentals missing in the puzzle to fully reach the 100% apex. These include regulatory environments, the right level of technological developments, and facilities’ physical inability to use these innovations.

But as decision-makers refine their policy toolkits to support renewable energy implementation, such as Vietnam, first movers are beginning to appear ready to reap the inherent advantages of moving first. [21] These include the 300 brands who have signed on to power all their global operations renewably & creatively through the RE100 initiative, including Chanel, Burberry, and Nike.[22]

 

3: Once ashore, empower your audience through your story

What happens when your product reaches its intended shores and people? In finality it should go to good waste. To this end, the third measure builds on the previous two: tell a compelling narrative to encourage and sustain greener consumption habits to help abate the industry’s footprint.

History, throughout its inflection points has always rewarded first movers and trailblazers. Already, brands and emerging sustainability champions are tapping into their strengths to capture new markets, pivoting on their stories, placing their audiences’ values and emotions at the center of their go-to-market strategies. These include fashion brands such as Chloè – which avails itself of the Situation, Complication, Resolution (SCR) Framework – and digital natives such as Amazon.[23]

Besides the obvious economic benefits of a customer-centric strategy, the brands capable of inducing eco-friendly choices within their audiences can successfully target the 21% emissions directly related to consumer behavior (see Figure 2 above). [24]

As fashion and garment products set sail, brands and leaders must rethink their own supply chains, and target areas ripe for sustainable optimization. Even if the journey to sustainability may seem long, and the seas uncertain, they are not alone.

 

References

[1]“The Paris Agreement.” United Nations. Available at: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

[2] “Delivering the European Green Deal.” European Commission. Available at: https://ec.europa.eu/clima/eu-action/european-green-deal/delivering-european-green-deal_en

[3] “Global Garment and Textile Industries: Workers, Rights and Working Conditions.” Solidarity Center. Available at: https://www.solidaritycenter.org/wp-content/uploads/2019/08/Garment-Textile-Industry-Fact-Sheet.8.2019.pdf

[4] “Global Fashion Industry Statistics – International Apparel.” Fashion United. Available at: https://fashionunited.com/global-fashion-industry-statistics/

[5] “The Future of Fashion: Sustainable Brands and ‘Circular’ Business Models.” McKinsey & Company. Available at: https://www.mckinsey.com/featured-insights/the-next-normal/fashion?cid=other-eml-alt-mip-mck&hdpid=5334d66a-e56f-4767-8e32-08f74419a181&hctky=12023643&hlkid=89c3a8b4e5214ffc8b1914d9118e36b4

[6] “A Brief Look at Decarbonizing the Fashion Industry.” Center for Climate and Energy Solutions (C2ES). Available at: https://www.c2es.org/2021/05/a-brief-look-at-decarbonizing-the-fashion-industry/

[7] “A Brief Look at Decarbonizing the Fashion Industry.” Center for Climate and Energy Solutions (C2ES). Available at: https://www.c2es.org/2021/05/a-brief-look-at-decarbonizing-the-fashion-industry/

[8] “11 Fashion Companies Leading the Way in Sustainability.” Forbes. Available at: https://www.forbes.com/sites/blakemorgan/2020/02/24/11-fashion-companies-leading-the-way-in-sustainability/?sh=3f2bace96dba

[9] “A Journey from Waste to Wear.” Healthy Seas. Available at: https://www.healthyseas.org/about-us/

[10] “Survey: Consumer Sentiment on Sustainability in Fashion.” McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/survey-consumer-sentiment-on-sustainability-in-fashion

[11] “Carbon Dioxide Emissions in 2010 and 2020, By Select Country.” Statista. Available at: https://www.statista.com/statistics/270499/co2-emissions-in-selected-countries/

[12] “Decarbonization… but Make It Fashionable.” Nuclear Energy Institute. Available at: https://www.nei.org/news/2021/decarbonization-but-make-it-fashionable

[13] “Survey: Consumer Sentiment on Sustainability in Fashion.” McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/survey-consumer-sentiment-on-sustainability-in-fashion

[14] “Fashion on Climate.” McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/fashion-on-climate

[15] “Roadmap to Net Zero Delivering Science-Based Targets in the Apparel Sector.” World Resources Institute & Apparel Impact Institute. Available at: https://mcusercontent.com/02d7a943deeb0be5c375f4552/files/ce1eb77e-f71f-4ecb-8634-3c71afdd64dd/Roadmap_to_Net_Zero_Preliminary_Draft_Final_Sept_2020.pdf

[16] “WHO Chief Says China’s Zero-COVID Policy Not ‘Sustainable’.” Reuters. Available at: https://www.reuters.com/world/china/who-chief-says-chinas-zero-covid-policy-not-sustainable-2022-05-10/

[17] “Fashion eCommerce Report 2021.” Statista. Available at: https://www.statista.com/outlook/dmo/ecommerce/fashion/worldwide

[18] “State of Fashion 2022.” McKinsey & Company. Available at: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf

[19] “Redesigning the Future of Fashion.” Ellen MacArthur Foundation. Available at: https://ellenmacarthurfoundation.org/topics/fashion/overview

[20] “Fashion on Climate.” McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/fashion-on-climate

[21] “Decarbonization… But Make It Fashionable.” Nuclear Energy Institute. Available at: https://www.nei.org/news/2021/decarbonization-but-make-it-fashionable

[22] “We Are Accelerating Change Towards Zero Carbon Grids at Scale.” RE100. Available at: https://www.there100.org/

[23] “From Aristotle to Amazon: How to Communicate Sustainable Attributes for Consumers’ Excitement.” ECONYL®. Available at: https://www.econyl.com/blog/from-aristotle-to-amazon-how-to-communicate-sustainable-attributes-for-consumers-excitement/

[24] “Measuring Fashion.” Quantis. Available at: https://quantis-intl.com/wp-content/uploads/2018/03/measuringfashion_globalimpactstudy_full-report_quantis_cwf_2018a.pdf

 

Authors: Naomy Gmyrek & Pietro Moro