Fashion’s Sustainability Reality Check

It started as a slow fade. Brands that once exuberantly trumpeted new “sustainable” collections or initiatives turned down the volume on the topic, or hit pause altogether.

Then came the job cuts. Personnel in senior sustainability roles, that just a few years ago were in hot demand, are now on the chopping block. Nike and Canada Goose have retooled their sustainability teams amid broader restructurings. Moncler removed its chief sustainability officer earlier this year. To be sure, many companies are still hiring for sustainability roles, but the industry is rethinking how it resources and manages sustainability teams, recruiters said.

Some companies, including Asos and Crocs, have already ditched or delayed climate targets, stating that their original goals were either not robust enough or unrealistic.

Brands say they are restructuring to better align with changing standards and business realities, rather than lowering their sustainability ambitions in response to new market uncertainties and political pressures. But the shifts threaten to further delay or derail the industry’s already lagging climate progress, even as a 13-month streak of record-breaking temperatures has made the consequences of inaction increasingly clear.

“A lot of ambitions have been put on pause or scaled back during a rather critical time,” said Catherine Harris, director of sustainable business in the Americas for recruitment firm Acre.

Strictly Business

In the aftermath of the 2015 Paris Agreement — the historic UN-brokered pact to cap global warming below levels that would prove catastrophic to humanity — and amid a pandemic-fuelled consumer “awokening,” big brands rushed to set and publicise ambitious sustainability targets with little thought to how they would actually meet them.

Deadlines set for 2030 were more than a decade out, there were marketing points to be won in the near-term and, since the commitments were voluntary, there were no real strings attached.

Now, inflated goals are colliding with shifting business priorities, as companies look to cut costs and shore up growth in a volatile market. Sustainability — which often contributes to the bottom line in ways that are hard to value — is an easy target. More so since some investors have cooled on strategies that prioritise environmental, social and governance issues alongside sales growth. The trend extends well beyond fashion, particularly in the US, where a political backlash against “woke capitalism” has prompted some companies to ditch both diversity and climate targets.

A lot of ambitions have been put on pause or scaled back during a rather critical time.

Sustainability and diversity, equity and inclusion “are the two functions that were really big in 2020. There were big commitments, big investments when companies were thriving,” said Lisa Butkus Yae, a partner at executive search firm Hanold Associates. “But as soon as things started to cool, these are the two functions where there was a quick pull back or less resourcing.”

Around 30 percent of Nike’s sustainability focused staff have been laid off or left voluntarily since the company announced a $2 billion cost cutting effort in December, according to an investigation by The Oregonian/OregonLive and ProPublica published last month. Nike said the changes to the team reflect a strategy to embed sustainability work across the business, rather than assigning it to dedicated staff.

Canada Goose laid off nearly half of its seven-person corporate citizenship team after announcing job cuts in March, though the company said it has plans to expand the team again with new roles. Both companies said they remain deeply committed to sustainability.

Across the sector, restructured teams face an increasingly difficult task to meet sustainability targets that were already lagging. About two thirds of fashion brands are behind on their own decarbonisation schedules, according to analysis from consultancy McKinsey & Company published earlier this year. Nearly half have seen their carbon footprint go up since promising cuts. Meanwhile, companies that have made progress need to accelerate their efforts. That means intensified investment and focus at a time when both are in short supply.

Nike’s emissions fell last year, but they’re far off the sportswear giant’s 2030 goal to reduce supply-chain emissions (where the bulk of the fashion industry’s carbon impact occurs) by 30 percent compared to 2015 levels. Instead they’re slightly up from this baseline, though they’ve been on the decline since the company set the commitment in 2019. Canada Goose is aiming to complete the process of setting science-based targets for its supply-chain emissions this year.

Reality Check

The changes also reflect tightening regulation and evolving standards that are prompting companies to reevaluate and refocus their approach to sustainability initiatives. Many have become more cautious in the way they communicate achievements and set targets amid a wide-ranging greenwashing crackdown.

In March, Gap Inc., Prada Group and Versace-owner Capri Holdings were among hundreds of companies that either didn’t submit or failed to set sufficiently ambitious long-term climate plans to pass validation by the Science Based Targets initiative (the world’s top arbiter of corporate climate goals).

The companies had pledged several years earlier to establish net-zero emissions targets aligned with the Paris Agreement by early 2024, a tougher standard than many had previously aspired to. In a survey published by SBTi in March, companies cited a range of reasons for missing the deadline. The most common included a lack of clear standards, uncertainty over whether targets could actually be achieved and the extreme challenge presented by getting a handle on supply chain emissions.

Gap and Prada said they remain committed to reaching net zero emissions by 2050. Gap said it submitted a revised target to SBTi earlier this year. Prada is aiming to complete an update to its commitment in the first half of 2025. Capri did not respond to a request for comment.

Incoming regulations are also reshaping the way companies structure their sustainability teams, shifting emphasis to regulatory compliance and away from aspirational goals. Prada said it’s expanding its sustainability team after committing to public targets that it will need to report on. Canada Goose is planning to expand its traceability team. Moncler said it was actively recruiting for additional roles.

Recruiters said the structure of teams are changing, too. C-suite positions are increasingly being slashed, with key activities layered into more operational roles. New hires are often more focused on change management than grand strategy, they said. The shift is similar to what happened with roles companies created to navigate the rise of e-commerce in the mid-2000s; specialised departments run by chief digital officers have increasingly faded away as the skills they represented became more embedded in the business.

“It’s too simplistic to say it’s a pullback,” said Butkus Yae. “It’s more of a learning in understanding how sustainability fits into an organisation and how you can set someone up for success.”

The challenges are not unique to the fashion industry. In March, the oil major Shell ditched a 2035 target to curb its greenhouse gas emissions and tempered one set for 2030; consumer goods giant Unilever watered down flagship goals to cut plastic pollution and preserve biodiversity in April; and last week Air New Zealand became the first major airline to scrap 2030 emissions target.

The companies have blamed the moving goalposts in part on forces beyond their control. New technologies are proving too slow to come to market; governments haven’t done enough to support action; and regulatory controls and standards aren’t robust enough.

In the meantime, the world keeps getting hotter.