Asos, Crocs Reset Net-Zero Climate Commitments

Two years ago, British fashion e-tailer Asos set a bold goal to cut its net carbon emissions to zero by the end of the decade. Now the company is abandoning that ambition — at least within a 2030 timeframe — and making an equally bold acknowledgement that the original target isn’t robust enough to align with evolving standards.

“We recognise that the 2030 target date for net zero we initially set is no longer aligned with best practice,” Asos said in a statement.

It’s a rare nod by a large fashion company to a widespread problem: while big brands have embraced splashy climate commitments as a way to bolster their eco credentials, an absence of accepted rules or government regulation has meant many of those pledges don’t actually measure up to much.

But the Wild West era of green goal setting is ending. Governments and standard-setting bodies are tightening up scrutiny on flimsy climate targets and as the cracks in the glossy veneer of fashion’s green goals become more apparent, some companies are adjusting their approach.

A Net Zero Reset

Five years ago, the world’s leading climate scientists laid out a stark timeline for countries, cities and businesses to take action to avoid the worst effects of climate change: global emissions need to roughly half by the end of this decade and hit net zero by 2050, they said.

An explosion of corporate climate pledges soon followed. But these commitments took place in a regulatory vacuum that left “loopholes wide enough to drive a diesel truck through,” UN secretary general António Guterres said during the annual COP climate summit in November.

Companies could — and did — set targets without establishing a baseline from which to measure progress. Some set grand-sounding goals for decades in the future, without indicating any intention to take action in the meantime. Many pledges leaned on carbon offsets and plans to lower a company’s carbon intensity, or emissions per unit of output, rather than absolute reductions — both features of the goal Asos set in 2021.

Those practices are now under fire amid efforts by governments and standard-setting bodies to crack down on “net-zero greenwashing,” one facet of a broader move to tighten up regulation and oversight of big companies’ climate claims.

Asos said it is planning to set a new net-zero target “as soon as is practicable.” The company has already shifted the way it talks about sustainability more broadly in response to an ongoing investigation by the UK’s Competition and Markets Authority into potential greenwashing at several fashion companies.

But it’s not just external scrutiny pulling inflated climate pledges down to earth. As 2030 approaches and companies get a better handle on their emissions impact and business trajectory, exuberant goals are also facing something of a reality check.

Last month, colourful clog-maker Crocs pushed back its net zero target by a decade, noting that its initial 2030 goal was set before the company fully understood its carbon footprint and failed to take into account the business’s significant growth.

“We believe proactively adjusting our goal is an important step to ensure we’re remaining credible and transparent,” Crocs said in an email.

Though companies often shift their climate goalposts quietly, according to analysis of corporate disclosures by Bernstein, public resets remain uncommon. The shortfalls in existing climate targets that they highlight are deep-seated and extend far beyond the fashion industry, pointing to much larger issues that still need to be addressed.

“Companies dropping net-zero targets is a good thing,” said Santiago Woollands, a policy analyst at climate policy-focused nonprofit NewClimate Institute. “Having a bad net-zero target is worse than having none.”

Stretch Goals

Even with a more stringent approach to target setting, most companies are still falling down where it counts most: their carbon footprints are still increasing and there’s little clarity around how businesses plan to decouple emissions from growth.

Asos is still committed to substantially cut the intensity of emissions from its operations, transport and own-brand manufacturing by 2030. Its goals have been approved by the Science Based Targets initiative, an organisation widely viewed as the gold standard for corporate target setting. (The company said it expects to set absolute emissions reduction targets “when these are appropriate” in the future.)

But last year, the company’s greenhouse gas emissions grew by 15 percent. Crocs said it has mapped out a path to cut emissions by 30 percent by 2030, but they jumped 45 percent in 2022.

More broadly, companies are still spewing out a record amount of carbon, with listed businesses projected to put 11.2 gigatonnes of CO2 equivalent into the atmosphere this year, according to analysis by MSCI published this month. Another report published in February by climate disclosure platform CDP found only 81 out nearly 19,000 companies that provide environmental data through its platform have credible climate transition plans.

The truth is, delivering on climate commitments is fiendishly hard. The vast majority of fashion’s emissions take place in the supply chain, where brands have limited control. Third-party retailers like Asos are even more removed from the source of these emissions. Even trickier is the need to find new business models that disconnect companies’ success from the need to make and sell more new stuff.

It’s a high-stakes game. The window of opportunity to achieve global climate goals is already vanishingly small and closing fast. While the deadline to hit net zero is still decades out, global emissions need to peak by 2025.

The consequences of inaction are already apparent and have real implications, not only for the world, but for fashion brands’ bottom lines. Climate change is already threatening the supply of key raw materials like wool and cotton and unusual weather patterns are making it harder for brands and retailers to predict consumer behaviour.

Meanwhile, scrutiny is increasing. Regulatory moves intended to crack down on greenwashing and require more robust reporting are likely to intensify the focus on targets that lack integrity and increase the risks for companies found to fall short.

And yet, unless those rules have teeth, critics say big companies’ climate targets may continue to do little to drive change.

“I don’t believe much changes until there are consequences,” said Ken Pucker, a senior lecturer at the Tufts Fletcher School. Until then, “we will continue to have a gap between rhetoric and reality.”

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