The fashion retail sector is currently undergoing efforts to improve its environmental impact. However, a recent report by non-profit financial think tank Planet Tracker suggests that these efforts are insufficient without active engagement with the supply chain. The report, titled “Following The Thread,” conducted an analysis of nearly 3,900 companies involved in the textile supply chain and discovered that retailers are not doing enough to collaborate with suppliers and manufacturers in order to reduce emissions and environmental harm.
The report highlights a significant disparity between the negative environmental consequences of fabric manufacturing and fiber production and their place within the supply chain. These processes contribute the majority of the industry’s climate change impact, resource consumption, and water usage; however, they generate only a small portion of revenues and market capitalization. On the other hand, clothing retail generates a significant amount of revenues and market capitalization but has a lesser direct effect on environmental impacts.
One of the main reasons for this disconnect is the frequent outsourcing of manufacturing, which results in limited visibility within the supply chain and limited control over environmental impacts. As regulators worldwide adopt a more assertive approach towards supply chain responsibility, retailers who fail to actively engage with their supply chain may face significant regulatory consequences.
Richard Wielechowski, a Senior Investment Analyst (Textiles) at Planet Tracker, stresses the importance of retailers collaborating with their supply chain to facilitate real change. He notes, “While retailers themselves emit relatively fewer emissions, their eco-friendly claims hold no meaning when the clothing they sell contributes to the acceleration of global warming and the pollution of water supplies with toxic chemicals.”
The report suggests that investing in the supply chain to improve environmental impact, such as implementing heat recovery or water reuse systems, can not only help retailers substantiate their green claims and fulfill Net Zero commitments but also yield positive returns quickly.
In conclusion, the fashion retail sector must actively collaborate with suppliers and manufacturers to make substantial progress in reducing its environmental impact. Without a concerted effort throughout the supply chain, retailers’ eco-friendly claims will be empty gestures. By investing in sustainable practices and striving for real change, the industry can enhance its green credentials, avoid regulatory consequences, and generate positive returns.
Useful links:
1. The Fashion Revolution: The Fashion Revolution is a movement calling for greater transparency, sustainability, and ethics in the fashion industry. It provides resources and information to promote positive change.
2. Sustainable Apparel Coalition: The Sustainable Apparel Coalition is an industry-wide group working towards measuring and improving the social and environmental impacts of apparel and footwear products. Their website offers tools, resources, and collaboration opportunities for companies in the fashion retail sector.
