This article appeared first in The Sustainability Gap, an in-depth analysis of BoF’s new report, The BoF Sustainability Index, which tracks fashion’s progress towards urgent environmental and social transformation. To learn more and download a copy of the report, click here.
Key Insights from The BoF Sustainability Index
The inaugural BoF Sustainability Index tracks fashion’s progress towards ambitious sustainability targets for the coming decade. It examines public disclosures to rigorously benchmark performance and enable like-for-like comparisons at 15 of fashion’s largest companies.
While fashion companies are speaking about sustainability more than ever before, BoF’s comprehensive analysis found actions are lagging public commitments, even among the industry’s largest and most highly resourced businesses.
The average overall score of the companies assessed was just 36 out of a possible 100, with significant disparities between engagement and action. Overall, progress skews towards target setting, with data often self-reported and unverified, pointing to a wider accountability challenge.
The BoF Sustainability Index Targets for Emissions:
a. Greenhouse Gas Emissions — By 2030: Reduce absolute greenhouse gas emissions by 45 percent.
Pinning down exactly how substantial fashion’s greenhouse gas emissions are is challenging, but estimates range from 4 percent to 10 percent of the global total. Without significant intervention, the industry will not align with global goals to limit global warming to no more than 1.5 degrees Celsius.
A strong framework for change already exists.
The fashion industry is widely adopting standards for corporate greenhouse gas emissions reporting and target-setting aligned with global goals to limit climate change.
Richemont, Under Armour and LVMH were the only companies in BoF’s assessment that had not yet set targets to reduce their scope 3 emissions, which cover manufacturing impact.
Nearly half of the companies had set science-based targets that align with the highest ambitions of the Paris Agreement to limit global warming to no more than 1.5 degrees Celsius above pre-industrial levels.
Emissions are not decreasing in line with companies’ targets.
Measuring progress against companies’ targets is challenging. Many didn’t make the information accessible through their own channels, only providing data on emissions from manufacturing via third parties. Some didn’t publish this information at all, or had only just begun to do so.
Fewer than half the companies had set absolute reduction targets for their scope 3 emissions, illustrating the challenge that still remains to decouple financial growth from environmental impact.
There are signs of deepening ambitions.
Thirteen of the companies indicated they have committed to fully shift their own operations to run on renewable energy.
Richemont, LVMH and Under Armour, the three companies currently lacking public targets to reduce scope 3 emissions, have all committed to set reduction targets through the Science Based Targets initiative.
The Sustainability Council’s Take
“Voluntary commitments will only get us so far, particularly in addressing climate change. Over my career, I have seen great value in companies setting ambitious sustainability targets. Yet while goals such as zero waste, carbon neutrality and closed-loop production can channel a company’s attention and resources, what’s needed is strong, science-based regulation to ensure that the world is reducing emissions at a fast enough pace, and that countries and companies are held accountable.” — Michael Sadowski, Independent Sustainability Advisor
The BoF Sustainability Index is built on over 5,000 data points gathered across the 15 companies included in this year’s edition. To request access to the full underlying data, click here.
The BoF Professional Summit: Closing Fashion's Sustainability Gap
On April 14 2021, BoF will convene leading sustainability experts and global thought leaders for a 3-hour live broadcast of interactive conversations and panel discussions, in which we'll unpack findings from The BoF Sustainability Index and outline the steps that need to be taken over the coming decade to align the industry with global climate goals and social imperatives. Space is limited.
As a BoF Professional member, register now to reserve your spot. If you are not a member, you can take advantage of our 30-day trial to experience all of the benefits of a BoF Professional membership, including the Summit.
Explore all categories from this year's report:
The BoF Sustainability Index is based on a binary assessment that examines companies’ public disclosures up until December 31, 2020. There are limitations to this approach and while the assessment was conducted in good faith, the results should be viewed as a proxy for sustainability performance and not an absolute measure. Where BoF was unable to identify public evidence to support a company’s performance relating to the assessment criteria, it does not necessarily mean the company is taking no action at all or that bad practices are present. Read the full methodology on pages 38-41 in the report here or see the FAQs.
Disclaimer: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.