Analysis & Reviews

Sustainability - Where Are The Top Fashion Brands

Where Are The Top Fashion Brands?

Major apparel & fashion brands have been disclosing their sustainable practices and initiatives for years; some since 2000. Whilst this is a positive trend, the environmental cost of the industry is still vast as various papers, documentaries & industry groups show. So, what does their disclosure really tell us about them and the sustainability status of the industry?

To get the latest on this we analysed 10 brands. We selected these 10 brands because they nine of them are industry leaders when it comes to sustainability and one is a top brand in the industry and serves as a comparison – more below. Between them they include:

  • The founding members of Zero Discharge of Harmful Chemicals (ZDHC);
  • The Top 5 ranked brands in the Green Supply Chain Corporate Information Transparency Index (CITI) 2014 Report by China’s Institute of Public and Environmental Affairs (IPE); and
  • Kering, the first fashion company to execute an Environmental Profit & Loss, as well as its main luxury competitor Moët Hennessy-Louis Vuitton (LVMH) – for comparative purposes.

All brands have actions to reduce their environmental footprint

But actions still lacking or absent in reporting and going circular

For each brand, we looked at their environmental footprint reduction actions, reporting and actions to go circular/close the loop. We did this through their latest annual & sustainability reports and websites. At no point in this review are we ranking the brands, including in the tables below (brands are arranged alphabetically, except for the two luxury brands – Kering & LVMH – which are at the bottom of the table).

Our review shows that all 10 brands are acting to reduce their environmental footprint. However, limited action towards reporting and pretty much distinctly absent action towards closing the loop on textiles, which raises some serious concerns. This is important because closing the loop will make fashion more sustainable. More on this and key findings from of our review below.

Well done for reducing your environmental footprints; but are the targets set high enough?

It’s clear from our review that all 10 brands are at least to some extent acting towards reducing their environmental footprint and this is across key resources (water, chemicals, pollution, energy & waste) – see all the ticks under the “Reduce” heading in the table below.

Brand Action to Reduce Overall Environmental Footprint Table

All doing work to reduce their footprint – well done;

but are the targets set high enough?

The extents of the brand’s actions are not detailed here but a broad takeaway is that some are doing much more than others.

Moreover, with different targets and limited information how can we gage how well they are really doing? Also, are their targets set high enough?

Brands are doing various sustainability initiatives but all pretty similar to each other – safety in numbers?

We noticed that many of the brands as part of their reduction actions are implementing sustainability initiatives and moreover that many of them are similar to each other. This similarity is both in the focus of the initiative (sustainable materials/cotton/leather/supplier auditing) or in the partner (SAC/NRDC/ZDHC) – see table below (click to englarge). Partnering (data showed usually with NGOs) is symbolically powerful but also helps to have greater impact & hold one another accountable. However, in some reports it was unclear how much had been done with little quantitative data on the partnership, just that there is the partnership.

Brand Sustainability Initiatives Table

It’s positive to see that 8 of the 10 brands are members of the Sustainable Apparel Coalition (SAC), which is responsible for the Higg Index (a suite of sustainability assessment tools for apparel and footwear products). Another positive result is the widespread membership to ZDHC.

One potential concern is the lack of brands partnered with Solidaridad, which works towards creating fair and sustainable supply chains. However, this is mitigated by the results showing that 9 of the 10 brands conduct supplier/factory audits in some form (internally, externally or both).

Still a lot of ticks in this table but brands must push on & think outside-of-the-box

There are still many ticks in this section (table above), though less than in the previous “Reduce” section (table). We note that whilst industry wide initiatives are good, brands should not stop here; they must think outside the box and go beyond safety in number initiatives.  A potential opportunity to do this lies in raw materials (sourcing & recycling), more on this later.

Kering Group the only ones with EP&L across the board

All of the brands we analysed are disclosing their sustainable initiatives, using verified and mostly the latest reporting tools (such as the Global Reporting Index (GRI), have some form of communication or data disclosure with IPE and the Carbon Disclosure Project (CDP)).

Overall reporting ok but not all up to date & only Kering Group doing EP&L

However, a point of note is that not everyone had a 2014 sustainability report, for some the most recent was 2011/2012. Another issue is that despite the disclosure frameworks the information and the data disclosed can be mostly self-selected.

Only two brands, Kering & Puma, did an Environmental Profit & Loss (E P&L). The reason Puma has an E P&L is because it is one of Kering’s brands (Kering pioneered the E P&L with Puma in 2011 and in 2013 conducted an E P&L for all of its 17 brands – more on Kering’s E P&L efforts here); and

These takeaways are reflected in the table below which has fewer ticks.

Brand Sustinability Reporting & Environmental Disclosure Table

Business and the environment cannot be handled separately for truly sustainable growth.   We especially see the case for this with raw material risks  –more on this in “Brands: Time To Walk The Talk”.

Action distinctly lacking on closing the loop/going circular

Recycling, re-using & designing with a closed loop purpose is where action is most lacking and yet it is one of the most crucial stages given limited raw materials, especially cotton. Brands themselves have acknowledged this and the importance of closing the loop and going circular (more here).

This last table has the most blanks in comparison to ticks. This means this is the area which needs most work

It’s clear that this last table (below) has the most blanks in comparison to ticks. This means this is the area which needs most work and action. Whilst some brands do have ticks, it is again the case that some are doing more than others.

The three brands Adidas, H&M and Puma (highlighted in yellow) are doing the most to close their loops – however, there is still much to do:

 

  • Adidas – Launched “Sustainable Footprint” in Brazil in 2012: consumers receive a discount for new shoe purchases after leaving an old pair; plans to expand into apparel
  • H&M – Actively trying to close the loop on textile fibres by recycling garments. In 2013 became the 1st to offer garment collection worldwide. The garments can be any brand and in any condition
  • Puma – “Bring Me Back” campaign launched in 2012: consumers bring used shoes, clothing and accessories from any manufacturer. The items are then either broken down & re-used to create raw materials, or they will be re-used in the case they are still in a suitable condition, or they will be recycled into new products. Since the start of the programme, PUMA has collected approximately 4,000 kg of used goods

Adidas, H&M and Puma (highlighted in yellow) are doing the most to close their loops

Other brands not in yellow need to at least catch-up

Still more action needed from everyone

Brand Action Towards Closing The Loop Table 2015

As for the other brands not in yellow, they need to step up to at least match these three brands. It’s not easy to close the loop but there is still not enough movement towards going circular, particularly as production & growth demands continue to rise.

Move past savings onto initiatives that ensure your brand survives

It is clear why these 10 brands are industry leaders or a top brand; they are all doing some good work, particularly in reducing their environmental footprint – though questions on the ambition on targets remain. However, this is not enough.

Key areas distinctly lacking action

Worrisome to think about the rest of the industry if leaders still need to do more

As we have shown there is plenty of room for more action in reporting and there is distinctly a lack of action being taken in closing the loop. By not closing the loop brands are not making their business model sustainable, which ultimately means they could go out of business. Risks have gone beyond CSR. Resources (water, land etc..) are limited, which is means physical and regulatory risks are impacting business.  It’s not about being green but being sustainable. The future is business-unusual.

If the industry leaders aren’t doing enough, it’s worrisome to think what the status of the rest of the industry is and how much more work needs to be done.


Further Reading

  • Brands: Time To Walk The Talk – H&M & Kering, are not walking the talk on raw material risks they identified themselves. With concrete action towards a circular transition missing, China Water Risk’s Dawn McGregor wonders how serious they are
  • Corporate Strategy & The New Chinese ConsumerAuthors of new report say that China’s war on pollution has created a fundamentally new Chinese consumer. Hart, Zhong, Ying & Zhu from Renmin University on why firms need to evolve their strategies
  • Corporate Water Reporting in China – CDP’s report shows potentially inadequate water risk assessment by Chinese companies & those with HQ’s in China. CDP’s Gillespy on their latest report and why it’s time to report on water risks

Textiles & Water Risk

  • Water Stewardship: Actions Must Match Risk - Despite acknowledgement of water risks, 58% of companies in CDP’s 2014 Global Water report do not have a public commitment to water. We expand on actions needed in China & globally to match the risk
  • One Year On: H&M & Water Stewardship - H&M’s Sustainability Relations Responsible, Julia Bakutis updates us on their Water Stewardship programme one year on. Find out what they have done & what challenges lie ahead for H&M as a water steward
  • Water Ten & Fashion: 8 Reasons to Leap or Fall - China Water Risks’ Hu shares 8 reasons why China’s Water Ten is actually an ultimatum for textiles to leap or fall. They need to decide which soon, as there is only two to three years before the paradigm shift
  • Risks Shifting Beyond the Wall - In China’s printing & dyeing sector centralised wastewater treatment brings centralised pollution, Ma Yingying of the Institute of Environment & Public Affairs tells China Water Risk. Lax supervision & vague responsibilities between factories & treatment facilities leave brands exposed

Textile initiatives

  • 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
Dawn McGregor

About Dawn McGregor

Dawn manages China Water Risk’s extensive network of partners and expert contributors. She also heads up projects, as well as conducts research and analyses on water risk. She is responsible for our communication, including our monthly newsletter publications, and 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. 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. She chose this degree with a view to bridge the scientific world with the corporate & public sector to create synergistic opportunities that benefit our world. Dawn was born and bred in Hong Kong and has lived in France, England as well as Singapore & Beijing.

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Erin Wong

About Erin Wong

Erin, a summer intern at China Water Risk, is a rising junior at Barnard College of Columbia University in New York City. In the Urban Studies program, her focus is in Sustainable Development with a dual interest in human rights and climate change, as well as a professional background in environmental policy consultation. A Seattle and Hong Kong native, Erin aims to work in East or Southeast Asia after completing her bachelor’s degree to pursue a career in environmental advocacy.

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