The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
On Sunday, world leaders and policymakers descended on the Scottish city of Glasgow to kick off the 26th edition of the Conference of Parties (COP), a two-week convention of talks and negotiations on critical climate targets.
These global gatherings have a mixed track record of driving change, but some have culminated in historic commitments. For instance, the Paris Agreement in 2015 established a legally binding international treaty that committed world leaders to limit global warming to well below two degrees Celsius above pre-industrial levels, and preferably below 1.5 degrees.
Things aren’t going well; a recent UN report found that countries’ current commitments to cut emissions fall well short of the ambitions set out in Paris. This summer, a separate report by a United Nations-backed panel of climate scientists concluded global warming is likely to surpass 1.5 degrees in the next 20 years without urgent, drastic action.
This edition of COP is widely regarded as a make-or-break opportunity to avoid a climate catastrophe.
“We are still very much on a knife-edge,” said Laila Petrie, chief executive of climate consultancy 2050. “I hope that this very pivotal COP will deliver the kind of decision-making that we’re looking for.”
Fashion will have a presence — and vested interest — too. The industry’s exact impact is hard to pin down, but a 2020 report by Global Fashion Agenda and McKinsey put fashion’s greenhouse gas emissions at between three and 10 percent of the global total. Pledges from the world’s richest countries to finance the transition away from fossil fuels include garment-producing countries like Bangladesh, Cambodia, Myanmar and Ethiopia among the potential beneficiaries.
Many industry players will likely up their climate ambitions, or highlight current progress, in conjunction with the conference. But more than just an opportunity to talk about sustainability, COP is a forum for policy decisions that will have a bearing — direct and indirect — on how the fashion industry will operate in the years to come.
A flurry of fashion brands has already announced new initiatives to limit their impact ahead of the conference, with more expected in the coming weeks. Last month, Ralph Lauren pledged to invest $5 million in regeneratively farmed cotton, with a goal to eliminate one million metric tonnes of carbon dioxide equivalent from the atmosphere by 2025 thanks to the improved carbon-capturing properties of the crop and soil.
The Sustainable Markets Initiative Fashion Taskforce, led by HRH The Prince of Wales and entrepreneur Federico Marchetti, launched a new “Digital ID” to inform customers of the sustainability credentials of their purchases at the G20 leaders’ summit Sunday. Members, including Burberry, Chloé, Zalando and Stella McCartney will begin rolling out the technology immediately.
Fashion is also on the official COP agenda, a reflection of the industry’s growing engagement with regulation and public policy in recent years. The UN Fashion Industry Charter for Climate Action, an industry commitment to slash emissions that launched at COP24 in 2018, is hosting an event on Nov. 8 where the focus will be on updating its targets. Currently, its roughly 130 company signatories are committed to cutting supply chain emissions 30 percent by 2030; deeper cuts will be needed to align with a 1.5-degree pathway.
But even as the industry is set to step up its ambitions, there are signs it is still lagging on delivery. The vast majority of fashion’s emissions take place during production, outside the direct control of brands and retailers. Nearly two-thirds of fashion companies are not on track to meet their own targets to cut down on these third-party emissions, according to an Oct. 26 report by Textile Exchange and consultancy The Climate Board, which examined 40 leading fashion and textile companies.
“We definitely need to move into [the] delivery phase now,” said Petrie. “I really would hope that this COP, because it’s so pivotal and so likely to result in ramifications for businesses globally, is where climate discussions make their way into the boardrooms as a really important part of business planning going forward.”
Top of the priority list at this year’s COP is how to achieve net-zero emissions by 2050 and limit the global temperature increase to 1.5 degrees, which climate scientists say will be necessary in order to stave off the worst impacts of climate change.
Many countries face mounting pressure to revise their own contributions to ensure they are in line with these ambitions. A recent UN report forecast global warming of 2.7 degrees Celsius by the end of the century based on current commitments. Fashion executives should be watching out for developments that impact the wider private sector, as well as key consumer and producer markets, said Petrie.
In some cases, the private sector is also pushing for sweeping regulatory action. Major business lobbying groups including Business Roundtable (BRT), the European Round Table for Industry and business councils of Australia, Canada and Mexico, have called on COP26 delegates to look at a global strategy for pricing and taxing carbon that would incentivise more innovative alternative energy sources. While such changes may not come to fruition at COP26, fashion companies with suppliers in countries where fossil fuels are heavily subsidised should brace for higher costs — and changing energy sources — in their supply chains.
Efforts to protect communities and habitats from the impact of climate change are also going to be a particular focus over the coming weeks. It’s an area where fashion is exposed, with the industry’s raw material and manufacturing supply chain linked to issues like deforestation and biodiversity loss.
“At this point, in my opinion, if a company...isn’t already working very hard to ensure there is zero deforestation in their supply chain, that would be a problem,” said Claire Bergkamp, chief operating officer of Textile Exchange.
On the other hand, “nature-based solutions,” which involve sustainably managing and using natural habitats to tackle environmental change, will likely be a recurring buzzword at the Conference. Many see this way of operating as an opportunity for highly polluting industries to transform.
For fashion brands, this will mean putting focus on practices like regenerative agriculture for producing natural materials, which can improve a crop’s capacity for absorbing carbon from the atmosphere. It’s a step beyond the carbon offset model, where a company might pay to plant trees or take other actions to balance out its emissions. “It’s not about paying someone off somewhere else to do it; it’s about looking at what you can actually do within your direct influence and supply chain,” said Bergkamp.
“While greenhouse gas reduction has to be the North Star, [you can’t] look at it in isolation without taking into consideration the other impacts that will help enable that, such as biodiversity, soil health, water, even circularity,” she said. “These are things that need to be kept in focus as well.”
The success of COP26 still hangs in the balance. Regardless of the outcome, the fashion industry will need to look beyond the next two weeks to take meaningful action.
In particular, the industry needs to address power imbalances between brands and their suppliers that can hinder improvements, and find new ways to collaborate on progress. Fashion companies will need to continue to look beyond their own operations to provide financial and political support for a shift to renewable energy and other climate-friendly initiatives in key supplier countries.
“A successful COP is where the global north and the global south have an honest dialogue with each other about supply chains, about how we can support infrastructure growth and development in different areas,” said Tamara Cincik, founder of UK-based fashion industry lobbying group Fashion Roundtable.
It’s important to ask, “What’s the continued role of the private sector?” said Austin Whitman, chief executive of non-profit Climate Neutral, which helps companies reduce and offset their emissions.
“It’s definitely dangerous to think that a COP is going to sort out all the problems and lead to some sort of negotiated agreement where everybody can go home feeling great,” Whitman said. “The reality is the hard work is really just beginning.”