Fashion’s Sustainability Secrets

Behind its shiny facade, the fashion industry hides big and dirty secrets.

Brands spend billions of dollars to persuade shoppers to buy more items that are worn for less time than ever before, only to end up in landfills. Manufacturing is largely outsourced to countries with weak labour laws and low production costs where factories belch polluting emissions into the atmosphere and spew chemicals into waterways.

It’s difficult to quantify exactly how bad the impact of all this is because the industry is so opaque.

And while growing concerns about sustainability have pushed brands to become much more vocal about their policies and targets to address environmental and social impact, seek out details on the outcomes of these efforts and public information evaporates, according to The Fashion Transparency Index, an annual analysis of big companies’ public disclosures by non-profit Fashion Revolution that published this week. (BoF’s Sustainability Index came to a similar conclusion.)

This year, the average score for the 250 companies assessed in the Fashion Transparency Index was just 24 percent (brands are scored out of nearly 250 possible points, which are then converted to a percentage).

Mass market retailers OVS, Kmart Australia and Target Australia topped the ranking with a score of 78 percent each, followed by H&M, the North Face and Timberland at 66 percent. Nearly a third of companies scored less than 10 percent.

Even those with the highest scores aren’t disclosing key data points, the report found.

Big companies’ focus on long-term targets without substantive data to back up any action is “frighteningly inadequate,” it said.

It’s a position that’s increasingly untenable as time to meet climate goals runs short and regulators step up scrutiny of the industry, putting companies in the firing line for a crackdown on greenwashing.

Here’s why it matters: At the moment, the industry lacks basic, credible data on fundamental issues like greenhouse gas emissions, production volumes, water pollution and labour conditions. That lack of transparency makes it difficult to drive change, measure progress or create accountability.

Those are things investors, regulators and consumers all want, and they are bringing increasing pressure to bear on the industry.

Consumer watchdogs have launched a crackdown on greenwashing, demanding brands do more to demonstrate they can back up sustainability claims in their marketing. A US ban on imports from China’s Xinjiang region that came into effect last month has ratcheted up urgency for companies to get visibility over their supply chains. Financial regulators are looking to introduce rules that would require companies to disclose details about climate risks, a growing consideration for investors when deciding which businesses to back.

This is just the tip of the regulatory iceberg facing the industry, with a slew of policies under consideration globally that will either directly require more disclosure or likely result in it as a corollary anyway.

While more transparency is not by itself a solution to fashion’s environmental and social ills, it is a fundamental baseline for any credible effort to operate more responsibly.

Transparency is “the bare minimum,” said Liv Simpliciano, policy and research manager at Fashion Revolution. “We’re in a climate crisis. There’s a crisis of inequality. There’s really scary things happening in the world every day, and we don’t have time to really be proving chains of responsibility.”

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Rachel Deeley contributed to this article.