Big-name fashion brands collaboratively push for supply chain decarbonisation

H&M Group is one of four retailers initially participting in the initiative

The fashion giants have today (13 June) jointly announced a new project, The Future Supplier Initiative.

It will see the businesses working with garment and textile factories in Tier 1 and Tier 2 of their supply chains to identify and address key barriers to renewable energy adoption, with an initial focus on suppliers in Bangladesh. Factory units used by multiple brands will be engaged.

A statement issued to mark the launch of The Future Supplier Initiative explains that suppliers are often deterred from investing in renewable energy generation, adopting electric technologies and enhancing energy efficiency because they find upfront costs too steep and payback periods too long.

Another common challenge is confusion over which technology options to select and broader gaps in technical knowledge of decarbonisation.

With this in mind, the Initiative will provide suppliers with new financial incentives as well as practical support over the next year. In year two of the programme, the emissions impact generated through the investments will be assessed and disclosed.

Gap’s president and chief executive Richard Dickson said the Initiative “unites brands, technical partners and financial institutions to drive meaningful climate action across the industry, faster and better than any one company can on its own”.

The Future Supplier Initiative is being supported by consultancy Guidehouse and DBS Bank. The Fashion Pact and the Apparel Impact Institute – two non-profits enabling sector-wide collaboration on decarbonisation  – are acting as Initiative facilitators.

It is hoped that additional banks and fashion brands will join the Initiative. After Bangladesh, participating organisations envision expanding the provision of supplier support to other key fashion manufacturing regions such as Turkey, India, China, Vietnam and Italy.

The Apparel Impact Institute’s president and chief executive Lewis Perkins said: “To achieve the industry’s ambitious climate goals, it’s imperative that every stakeholder leverages their influence to drive tangible change. A joint effort among brands and retailers is essential to create conditions where suppliers are motivated and capable of making these investments.”

Fossil fuels in fashion

The UN estimates that the fashion industry contributes to around 10% of global greenhouse gas emissions and is a greater energy consumer than the aviation and shipping industries combined.

A significant part of the problem lies in the use of fossil fuels, including coal, in supply chains. Key supplier hubs are largely concentrated in developing and emerging economies with energy mixes dominated by fossil fuels.

A recent analysis of the energy transition in the supply chains of 11 large fashion brands, carried out by Stand.Earth, found that most lack time-bound and specific targets to transition suppliers to renewable electricity. Data is also lacking on how brands are financing the transition and engaging with policymakers in key manufacturing regions and nations.

H&M Group scored highly on target-setting, with a commitment to reduce Scope 3 (indirect) emissions by 56% by 2030 that will entail all suppliers shifting to 100% renewable electricity. Puma was the only other brand with time-bound, numerical targets of this nature.

Lagging behind in the assessment were online fashion behemoth Shein and Fast Retailing, the parent company of Uniqlo. Also assessed were Adidas, Gao, Inditex, Levi Strauss, Lululemon, Nike and VF Corp.

Lead report author Rachel Kitchin said: “Brands’ failure to take responsibility for their emissions by funding and enabling the transition to renewables, while continuing to make more stuff, will mean more fossil fuel dependence in the Global South where their products are made, and cause harmful health and climate impacts for decades to come.

“Brands need to pay for the changes they demand by financing the renewable energy transition in their supply chains and be more transparent about who their suppliers are and where they are located.”