Analysis & Reviews

1 Year On - Where Are The Top Fashion Brands

1 Year On: Where Are The Top Fashion Brands?

A year ago we took a look at where the top 10 leading sustainable fashion brands where in terms of sustainability. Has much changed in the year?

Since last August there has been continued if not increased pressure on fashion brands from NGO campaigns, documentaries like “True Cost”, more conscious consumers and increasing transparency demands.  On top of this there was the Paris Agreement at COP21, which some of the brands’ sustainability reports mentioned.

Positive to see in round 2 of analysis that water is often a main focus; mentioned in some CEO letters, others it is part of core strategy & more water-related technology listed…

But how much action have brands taken?

Water was mentioned early on in many of the reports, some actually mentioned it in the CEO letter. Water was also a big focus in most of the reports. Gap Inc.’s report says, “Our current environmental approach centers on two main areas: climate change and water.” Water-related technology (either reducing water use or eliminating it) also appeared more with examples like Nike’s “CoolDry”, Esquel’s “Green Machine Eco-Wash” and Adidas’ “DryDye” & “NoDye”.

It was also positive to see that “circular economy”/”closing the loop” was mentioned considerably more and with corresponding actions – not just all talk. More on this later.

In our analysis this year we have added Levi Strauss & Co. as the indsutry has recognised its work in sustainability: it moved up 12 places to rank #3 in the 2015 CITI Index report, was a one of the five finalists at the 2015 GLASA Awards and in 2016 it open-sourced previously trade secrets, its “Water<Less” process.

Key findings from our analysis below.

CITI Textile Top 5 sees big change from 2014 to 2015

The Corporate Information Transparency Index (CITI) report published by The Institute of Public & Environmental Affairs (IPE) and the National Resources Defense Council (NRDC), covers various industries. For the point of this article when referring to the CITI report it is the textile industry analysis only.

The Top 5 textile brands in the CITI report,  saw a big change between 2014 (1st publication) and 2015. Only two brands remained in the top group – H&M – though it dropped from #1 to #2 – and Esquel – dropped from #2 to joint #5. Gap Inc., C&A and Puma dropped out. They were replaced with Adidas, Levi’s Marks & Spencer and Walmart.

Only H&M and Esquel remain in CITI Top 5, though drop ranks

Adidas, Levis, M&S and Walmart join top ranks

CITI Report Top 5 Textile Brands 2014 v 2015

Actions to reduce environmental footprint remain high but questions around targets remain

As like last year this table has the most ticks. There is only one change to last year and that is Li-Ning. In its latest report Li-Ning did not clearly state any reduction actions for water, waste & energy, though it does mention them.

Brand Action To Reduce Overall Environmental Footprint 2015 v 2016 Analysis

Reduction actions are abundant as like last year…

…but target issues remain

As for targets, some brands clearly stated if they had achieved various targets, whilst others not so. This makes comparison difficult.

Moreover, whilst targets are disclosed some remain hard to gauge for impact as there is little if any context given. A reduction of 30% may be great but without knowing of how much and from when it’s ambiguous.  Most of the reports have a next major target benchmark of 2020.

Increase in sustainability initiatives; more attention & action on materials

There are more ticks this year than last, which means brands have been stepping up sustainability initiatives. This is particularly the case for partnerships/engagements with NGOs.

There are more ticks this year, particularly for partnerships with NGOs

Brands partnered with the Sustainable Apparel Coalition (SAC) remain high with 9 of the 11 brands. It is the same two brands as last year, Li-Ning & LVMH, that don’t have partnerships.  Meanwhile, there are new partnerships for both the NRDC and Solidaridad. The most noticeable increase from last year is by Kering, which now partners to some degree with NRDC, Solidaridad and joined the Zero Discharge of Harmful Chemicals (ZDHC) group.

Other partnerships and engagements with NGOs are mentioned in the brand’s reports but those listed in the table below are the main industry-wide initiatives that are most aligned with our focus. (Click to enlarge table)

Brand Sustainability Initiatives 2015 v 2016

Raw materials are an increasing risk exposure source with increasing demands, limited natural resources and new economic & development paths in which textiles is not a focus. Our analysis shows that  32% – 75% of key fashion materials (cotton lint, raw silk, chemical fibres etc.) are exposed to China, where the government put textiles on a list of industries that need to transform for a circular economy, if they are to have a future. With this in mind this year we added polyester-related sustainability initiatives to our analysis as it is a key fashion material.

Action on cotton- & leather-related initiatives the same

Plus many ticks for polyester- & packaging-related initiatives

We also added packaging-related sustainability initiatives given the world’s growing packaging waste, particularly in China, and deforestation issues.

Our analysis shows that brand action on cotton- & leather-related initiatives remained the same as last year. Factoring in polyester- & packaging-related initiatives, there are still quite a few ticks, 7/11 and 9/11, respectively. Recycled polyester was mentioned in many of the reports, which is very positive to see as this is part of becoming a circular economy.  Also positive to see is that the majority of brands have some element of packaging sustainability – be it recycled content or volume reduction.

Brands are paying greater attention to materials

Some are conducting life cycle water assessments, global supply chain mapping vis-a-vis water stress & more

Our analysis revealed that brands are paying greater attention to materials – water content, energy requirements, chemicals used, waste generated, sustainable material component, impact from customer care etc.  Levi Strauss & Co. conducted a global Life Cycle Assessment update. Nike mapped their global supply chain to identify regions where water stress and flooding have the potential to impact factories and material vendors. This included using The World Resources Institute’ Aqueduct tool. C&A conducted its first cradle-to-grave water footprint assessment for all of its operations. Aligned with other similar assessments water consumption was highest at the raw materials stage of the value chain, with 90% of consumption.

C&A in also conducted its first global consumer survey of sustainability interests.  According to C&A, “Across all our key markets, consumer feedback was clear: tell us where and how your clothes are produced.”

Little change in reporting

There has been little change year-on-year. All have a sustainability report, or have a sustainability section in the annual report. The Global Reporting Initiative (GRI) framework is still used by the majority of brands, some have updated from G3 to the latest G4 version. Kering and Puma (through Kering as it is one of its brands), remain the only two brands to complete an Environmental Profit & Loss (E P&L). Kering has now done two E P&L’s for its entire group.

Disclosure or communication in some form to the Carbon Disclosure Project (CDP)’s water survey and the Institute of Public & Environmental Affairs (IPE) is similar to last year.

Brand Sustainability Reporting & Environmental Disclosure 2015 v 2016

The challenges with comparison we identified last year remain as data disclosed, though through frameworks, is still mostly self-selected and not always in comparable formats and contexts.

More going circular but there is still a long way to go

The “circular economy” or “closing the loop” was mentioned considerably more than last year. In some cases it had its own section and in others the circular economy has become part of key strategic frameworks. This is all very positive and we are happy to report this marked change. This table had the least ticks last year and yet it is the area that needs the most attention. A circular economy is what will give fashion a sustainable future. This improvement can clearly be seen on the table below (yellow cells mark  a change from last year).

Brand Action Towards Closing The Loop 2015 v 2016

Last year only 2 brands had ticks across all 3 sections

This year 7/11 do

But remember, some brands are doing more than others

Last year only H&M and Puma had ticks across all three sections – design, recycle & re-use. This year 7 of the 11 brands have ticks across all three sections – a drastic change.  There are more take-back programmes, innovation hubs and sustainable material being used than before. This drastic change seen in just one year shows how critical it is for textiles to become a circular economy and that these brands realise this.

“What are the main sustainability challenges for H&M and the fashion industry as a whole? It is all about closing the loop by reusing textile fibres, suppliers paying their employees a fair living wage and the ambition to increase transparency so customers can make informed choices.”, H&M 2015 Sustainability Report.

However, it is worth noting though that whilst a brand may have a tick, some are doing more than others. Below are some key circular economy initiatives identified from our analysis:

  • Adidas
    • Ocean Plastic with Parley for the Oceans – shoes made from reclaimed and recycled ocean waste
    • Sport Infinity – a research project aiming to identify ways to develop waste into a brand new product
  • C&A - Circular economy incubator centre to be set-up in 2016
  • Esquel - Used yarn and fabrics find new life as garment tags or are re-woven into labels or bags
  • Nike
    • Grind – regenerates scrap material into new products
    • FlyKnit – expanding technology; FlyKnit used in 28 models now from 1 in 2012

Whilst there are more ticks this year it doesn’t mean that circular fashion has been achieved, there is still a lot to do

Whilst the “Brand Action Towards Closing The Loop” table looks completely different compared to last year don’t be tricked into thinking that circular fashion has been achieved. Some of these initiatives are just the start and some are now pushing past that but there is still a long way to go. A circular fashion economy is unknown territory, no one has the answers but if we work together we can find them. See some of the latest circular economy initiatives & technologies and hear from leading circular fashion voices in our article, “Circular Fashion Today“.

We are hopeful that next year we will see even more ticks – though quality is key and not just quantity; we need more than box ticking exercises – and that circular economy initiatives will have progressed and be at change-making scales.


Further Reading

CWR - Today's Fight for the Future of Fashion.jpgIn our new brief, “Today’s Fight for the Future of Fashion – Is there room for fast fashion in a Beautiful China?”,  we look at the pre-existing but now more robust risks as well as new ones, with the backdrop of China’s aim of building a “Beautiful China”; “where the sky is blue, the land is green and the water runs clear”. Risks and opportunities are covered in the brief through:

-Dirty thirsty fashion: a clear target in ‘Beautiful China’;
-Short-term risks: Water Ten Plan;
-Stricter enforcement: new environmental law & policies;
-Long-term risks: high raw material exposure, soil clean-up & ‘Made In China 2025’;
-High reputational risk: continued NGO pressure & the new Chinese consumer;
-Brand rankings on sustainability: leaders & laggards; and
-The future of fashion: closing the loop & who can help.

  • Future Fashion & ‘Beautiful China’ – Together Forever? - With fast changing regulatory landscape moving against pollution from the textile industry, is there really room for fast fashion in a ‘Beautiful China’? China Water Risk’s McGregor on why it’s time for fashion to become beautiful inside and out
  • Circular Fashion Today - Closing the loop in the fashion is not new. But perhaps now that China,  the world’s largest manufacturer of garments, wants to go circular, it might become a reality. Get on top of the latest trends with leading circular fashion innovators
  • Where Are The Top Fashion Brands? – Given tighter regulations for textiles in China, we review the environmental initiatives of 10 top fashion brands from fast fashion to luxury. Are they looking beyond CSR to make their business model sustainable?
  • Brand Rankings Through A Chinese Lens - See how global and local brands rank across 8 sectors in terms of their supply chain’s environmental impact in this review of the new Corporate Information Transparency Index (CITI) report by IPE & NRDC
  • Putting Waste Back Into Fashion – China is clamping down on textiles due to the heavy pollution & waste from the industry. With potential new revenues streams in recycling, hear from Redress CEO Christina Dean on how the EcoChic Design Award’s army of sustainable designers is closing the loop on textile waste
  • Clean by Design: Gaining Traction -Many factories look to MNCs to help address environmental issues that have arisen from textile production but there is scant on ground corporate engagement by brands. See how NRDC’s ‘Clean By Design’ textile mill programme in China has achieved stellar results despite this. NRDC’s Linda Greer expands
  • On Being Water Conscious in Textiles – Zhao Lin from Solidaridad expands on the Better Mill Initiative (BMI) and provides solid business cases in water savings for the textile sector. See how water & energy savings can result in sustainable & financially viable gains with short payback periods
  • Dirty Thirsty Wars – Fashion Blindsided - CLSA report titled “Dirty Thirsty Fashion: Blindsided by China’s water wars”, examines how China’s water risks could blindside the US$1.7 trillion global fashion industry. Is this the end of fast fashion? Debra Tan expands
  • China’s Economy: Linear to Circular - China is the 3rd country globally to enact polices to move towards a circular economy. See how & why China needs to make this transition; which industries are affected, what is the role of industrial parks?

 

Dawn McGregor

About Dawn McGregor

Dawn leads China Water Risk’s projects in the textile space, as well as conducts research and analyses on broader water risk and its disclosure. She is also responsible CWR’s communications and extensive network. She showcased these skills at World Water Week, where she has twice been lead rapporteur presenting key findings in the closing plenary, as well as contributing to conference’s conclusion papers. She has also delivered keynotes at various industry conferences, corporate events and investor forums in China and around the world. Dawn previously worked in a global investment bank analysing and mitigating non-financial risk in Asia Pacific. This included crisis management, business resiliency and geo-political risk assessment. She now continues her work in risk assessment with a new focus of China and water. Dawn has a background in science with a degree in Biology and Business, which she chose with the view of bridging the scientific world with the corporate & public sector to create synergistic opportunities. Dawn was born and bred in Hong Kong and has lived in France, England as well as Singapore & Beijing.

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Woody Chan

About Woody Chan

Born in Hong Kong, Woody graduated from the University of Cambridge in June 2016 with a BA in Geography. His travels across Eurasia pointed him towards the nexus between environmental risk and global business. In particular, he is concerned with the extent and effects of wastewater discharge in China – the topic of his dissertation. At China Water Risk, Woody undertakes multiple research streams ranging from water stress in the HKH region to water issues in China’s mining and data centre industries. Moreover, he assists in the publication of the monthly newsletter and will be responsible for future updating and revamping of China Water Risk’s website. Also proficient at GIS mapping, he hopes to embark on a career which helps tackle climate change from a business and financial perspective.

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