U.N. Fashion Industry Charter for Climate Action Shows Mixed Progress
The United Nations Fashion Industry Charter for Climate Action, alongside the Carbon Disclosure Project, published its 2023 progress report on Monday.
The charter is an industry-led initiative convened by U.N. Climate Change to drive fashion, ambitiously, toward a net-zero future no later than 2050. The UNFCCC requests company-provided climate change data via CDP’s supply chain program, which is only partly third-party verified.
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Since its creation in 2018, 99 apparel signatories — among them Adidas, H&M, Kering and Inditex, as well as manufacturers — have signed onto the charter.
The report shows that, while progress is mixed, it appears charter signatories are better positioned to act on climate as signatories must disclose climate-related data to CDP. While only 10 percent of the wider apparel sector has set science-based targets (per the Science Based Targets Initiative), 40 percent of charter signatories have done so. However, over the past three years, some 31 signatories lost accreditation with the charter due to “failure to report” and others simply left in favor of “other industry coalitions.”
Gaps aside, the reigning call is for signatories to halve emissions by 2030, with a pledge to achieve net-zero emissions no later than 2050 as an updated, more ambitious target in line with the recent U.N. climate report.
Less than half of signatories — or 45 percent — were compliant with setting public climate targets needed to keep global warming below 1.5-degrees Celsius targets in line with the Paris Agreement. (For charter compliance, firms must set a base year that is no earlier than 2019, a target year of 2030 and a percentage reduction from base year that is 50 percent for Scopes 1, 2 and 3).
Less than 2 percent of companies currently have a verified net-zero target, with nearly 30 percent having “committed” to set them. Only a handful, or seven signatories, have achieved reductions of at least 30 percent in Scope 3, which is crucial as indirect operations account for the majority of supply chain impact.
That’s why supplier engagement is another key area. There were upticks in the number of companies etching “climate-related requirements into their supplier contracts,” with 90 percent of signatories signaling some form of supplier engagement on the plus side.
Energy is part of the equation, too. While the majority of signatories reported renewable energy consumption, and 15 percent source all renewable today, there needs to be a sizable jump to reach 100 percent renewable energy sourcing by 2030.
According to the report, fashion is mostly game for politics, with around half of signatories getting behind a trade organization to lobby, as opposed to 26 percent who engage directly with policy makers on climate-related issues.
And business transition isn’t an afterthought, either, with a demand for climate-related competencies in the C-suite, monetary compensation for sustainability progress and more making its way into charter business strategies.
Though data remained generalized, some charter companies did receive special notice in the report, 10 among them — Burberry Group, Inditex, LVMH Moët Hennessy Louis Vuitton, Fast Retailing Co. Ltd., Kering, Puma, Tendam Global Fashion Retail, Lenzing AG, Superdry and VF Corp. — for making CDP’s “A List” in 2022.
Sonya Bhonsle, global head of value chains and regional director of corporations at CDP U.K. and worldwide, expressed the need for leadership given fashion’s outsized impact. “CDP appreciates the signatories’ leadership in an industry where the stakes couldn’t be higher. Massive production volumes, resulting in millions of garments purchased each year, leave behind a staggering trail of Scope 3 emissions. CDP estimated in 2020 that the upstream emissions of apparel are 25 times that of their own operations. This puts the signatories of the Fashion Charter in a unique position to drive change where it matters most.”
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