How Polluting is the Fashion Industry, Really?

Jasmin Malik Chua
·9 min read

The fashion industry emitted just under 1 metric gigaton of carbon dioxide equivalent in 2021, or roughly 1.8 percent of the world’s total greenhouse gas production.

That’s the latest estimate from the Apparel Impact Institute, a.k.a. Aii, the Sustainable Apparel Coalition (SAC) spinoff whose remit is to identify, scale and fund solutions that mitigate the garment and footwear production’s prodigious environmental impact.

More from Sourcing Journal

Adjusting for certain assumptions on fiber allocation—polyester, for instance, is presumed to consist of 67 percent filament yarn and 33 percent stable fiber ringspun yarn—the number marks a 0.87 percent increase from the 2019 figure presented in Aii’s 2021 “Roadmap to Net Zero,” which it revised to 0.89 metric gigatons based on discussions with data suppliers Textile Exchange and Higg Co, now known as Worldly.

Because Aii used secondary rather than primary data, this isn’t a “defining” number by any means, said Michael Sadowski, the World Resources Institute research consultant who authored the report. But it is its best approximation, one that can provide a “good enough basis” to understand where the opportunities to reduce emissions are, he said.

Aii isn’t the first organization that’s tried to pin down how much the $3 trillion industry pollutes. Various figures have put it at 4 percent, 8 percent and the oft-repeated—but woefully unsubstantiated—10 percent. The last is definitely off base, Sadowski said.

“If you look at other sectors: cement, steel, chemicals, like all of those sectors are in the 2 percent range, right?” he said. “I know we all work in apparel, and we’re trying to drive impact, but we shouldn’t hold it up as a much higher figure than it really is.”

Not that it changes the need for urgent action, ultimately. Whether fashion is responsible for 2 percent or 10 percent of the world’s carbon budget, it needs to get down to net zero by no later than 2050, he said. And assuming a business-as-usual trajectory for clothing and shoe production, emissions are projected to be 1.27 metric gigatons in 2030. To limit additional warming to 1.5 degrees Celsius, the sector needs to cut its carbon by 45 percent from 0.89 metric gigatons in 2019 to 0.49 metric gigatons by 2030.

“Every half a degree matters,” Sadowski said. “The impacts that we’re seeing today on climate, whether it’s record heat in Asia, where a good portion of the world’s apparel and footwear is produced, to wildfires in North America, to drought in Europe…the impacts of climate are not coming years from now; they’re happening now. So this is really the context and the urgency with which we have to act.”

Even a small increase in emissions, he added, is “going the wrong way.”

The breakdown of emissions for 2021 was “nearly identical” to that of 2019, the report found. Material processing, took up the bulk of emissions at 53 percent, followed by raw materials extraction at 23 percent, raw material processing at 15 percent and finished goods assembly at 8 percent.

In the 2019 report, Aii and WRC identified six interventions, or “levers” that could bring about more than 60 percent of the desired reductions: maximizing material efficiency, scaling more sustainable materials and practices, accelerating the development of innovative materials, maximizing energy efficiency, eliminating coal in manufacturing and shifting to 100 percent renewable electricity.

The report shares case studies that show best practices in each of these areas. H&M Group, for example, tripled the share of recycled materials it used in its garments from 5.8 percent to 17.9 percent in 2021. Lenzing, by swapping out inefficient pumps, optimizing current technologies and immediately responding to malfunctions and leaks, was able to shave off 1.5 percent of its energy consumption between 2014 and 2021. At its second-largest production location in India, Arvind Limited will completely replace coal with waste cotton stalks and other types of biomass by early 2024. And Lululemon is working to increase renewable energy adoption in Vietnam and other countries through investments and power purchase agreements.

The idea now is for Aii to take these case studies and, in partnership with Textile Exchange, the SAC and other collaborators turn them into “scalable, replicable processes,” said Kurt Kipka, Aii’s chief impact officer.

“And even then, we’re still going to have a long road ahead of us to ultimately halve the emissions by the year 2030,” he said. “There’s a lot more to do; we need to ultimately move beyond the case study approach to the way that we’re building out these processes and making meaningful progress.”

This is where Aii’s Climate Solutions Portfolio, a registry of carbon-quashing solutions, comes in. And the $250 million Fashion Climate Fund that will deploy the money necessary to scale the most promising among them.

“The reality is, as a society, any little project that’s driving emissions reductions right now, in a quantifiable fashion, is like gold, and that’s ultimately what we’ve [been] seeking to uncover with our partners [and] with our programs,” said Kipka, who has been poring through applications with the rest of the selection committee. “And then applying a financial lens to it where we can say, ‘Where can we get the most bang for our respective buck on a project-by-project basis?”

Efficiency work is by now “tried and true,” he said. After all, it’s been the bread-and-butter work at Aii since its inception in 2017, when it took over the Natural Resources Defence Council’s Clean by Design program. More white spaces reside, on the other hand, in the case of areas such as next-generation materials and the impact of circular business models. Pegging the types of projects that can drive the most change is one thing, replicating them among hundreds, if not thousands, of facilities, is quite another.

“Those are massive leaps in innovation that are going to be needed within some of the levers that we’ve carved out within the report,” Kipka said.

When it comes to decarbonization, there is no one-size-fits-all solution, H&M Group said. Different countries present unique challenges that require different roadmaps, programs and even timelines. Indonesia, which has a huge coal dependency and a dearth of progressive regulations around renewable electricity, presents a different challenge than Bangladesh, which lacks basic infrastructure for enabling electrification and is heavily dependent on natural gas.

“We, therefore, have individual timelines for each country, based on how much we think they can support our long-term goals, and our consideration of how we to balance those against each other,” a spokesperson for the Swedish retailer, which has pledged to reduce absolute emissions 56 percent by 2030, wrote in an email.

“Today, we have concerns that some of the markets will be able to reduce enough to support our goal, due to systemic challenges—which means that others would have to do even more,” the spokesperson said. “That’s why we constantly work with the question, in which other market we can improve our reductions even further and balance them out accordingly.”

The size of the problem is such that it calls for different points of attack, said Abhishek Bansal, head of sustainability at Arvind Limited. The fact is textile production is an energy-intensive business, which is why weaning off coal has been so challenging for geographies without cleaner fuel sources. So far 40 percent of its mills employ biomass as a substitute. The manufacturer has invested in 22 megawatts of solar generation capacity across its operations, including a 16-megawatt array in Gujarat that is India’s largest rooftop installation of its kind at a single location. In a couple of months, it will commission a wind and solar location, 150 kilometers away from most of its production units, that will bump up its renewable energy share to 45 percent to 50 percent by next quarter.

“I think my biggest learning is to not sort of concentrate on the near term but concentrate on the long term,” he said. “If we look at biomass, it is expensive, but there is a lot of taxation that is coming on coal like the clean energy tax and carbon tax. So while it may look nonprofitable right now, if we don’t do it for the long term, by the time [coal] becomes nonviable, then we’ll have much less time to do it.”

But another inconvenient truth is that capital investments need cash—a lot of it. That’s something that Aii, through the Fashion Climate Fund, hopes to help with, though meeting the scale of financing needed will require the market to seriously rally.

“In order to scale the kinds of solutions needed to decarbonize the supply chain, we need to provide facilities with access to more attractive financing,” said Aii president Lewis Perkins. “To do this, we need engagement from philanthropy, brands, development banks and other financial institutions. By blending capital from various sources, we can lower interest rates and provide longer-term financing to manufacturers.”

Brands, too, can provide longer-term partnerships with suppliers in the form of offtake agreements that guarantee revenue during the term of the investment, he added.

It’s only through industry collaboration, after all, that results will manifest, said Sadowski, who calls Scope 3—more so than Scopes 1 and 2, which are within a company’s relative control—the “elephant in the room.”

“There are dozens of brands, probably more, [that] have already reached their Scope 1 and Scope 2 goals, right?” he said. “Scope 3 by definition requires collaboration across the value chain. For a brand to meet its Scope 3 target, it has to line up its manufacturing partners to get there.”

Kipka said he’s “cautiously optimistic” about the future of the industry. There are indications of momentum, he said, though the next couple of years are going to be critical as brands, retailers, manufacturers and producers position themselves for the “five-year sprint” that has to happen between 2025 and 2030.

“There’s an indication from the manufacturing community that there’s business value and incentives in this industry, perhaps that provides a leading edge compared to other sectors,” he said. “Still, I don’t want to give any indication that we can let our foot off the proverbial gas pedal. There’s still a lot of action that needs to happen.”