As emissions rise, fashion grapples with growth

This article is part of our Vogue Business membership package. To enjoy unlimited access to our weekly Sustainability Edit, which contains Member-only reporting and analysis, sign up for membership here. Fashion has an overproduction problem, and it is causing already high greenhouse gas emissions to skyrocket, despite promises from brands to curb their climate impacts. Yet, many still refuse to address what experts call the “elephant in the room”: degrowth. In the last year, fashion companies from Kering to Ralph Lauren have been updating their emission reduction targets from emissions intensity to absolute emissions, forcing a conversation about the growth models underpinning their businesses. “You can reduce your footprint at the product level, but at the end of the day, because your company [keeps growing], you increase your quantity of greenhouse gas emissions,” Marie-Claire Daveu, Kering’s chief sustainability and institutional affairs officer, told Vogue Business when Kering updated its targets in March. “Many companies have net-zero value chain goals. Despite just starting to get underway, we already hear that many are not on track to meet these goals,” says David Wei, managing director for climate and nature at business network and consultancy Business for Social Responsibility (BSR). “It begs the question: is it possible to achieve the necessary absolute emissions reductions by 2030, without probing the question of growth? At a certain point, this will be impossible without deep business model transformation.” Estimates of fashion’s footprint range wildly. Some estimates say fashion accounts for as much as 10 per cent of global greenhouse gas emissions, a widely quoted figure. Others — including the Apparel Impact Institute, which published updated figures in June — say the reality is closer to 1.8 per cent. Either way, the global industry’s general aim is to halve emissions by 2030, and reach net zero by 2050. Many fashion brands now have more specific, personalised targets, but progress towards meeting them is slow. At the current rate of emissions reduction, only 7 per cent of Accenture G2000 companies — just a small subset of global businesses — are on track to achieve their own net-zero targets for Scopes 1 and 2. Pushing target deadlines back to 2050 only increases this number slightly, to 8 per cent. It’s a bleak reality, but net-zero targets remain largely out of reach in an industry that still defines success as growth. “The basic problem we face is that our economic system is completely measured and governed with financial growth indicators,” says Dr Hakan Karaosman, co-founder of the EU-funded research centre Fashion’s Responsible Supply Chain Hub (FReSCH), chair of the Union of Concerned Researchers in Fashion, and assistant professor at Cardiff University. “The triple bottom line [on which the B Corp model is based] was developed as an alternative to this, but ultimately falls short because it tries to plant sustainability within the existing system, which measures everything with productivity and gross domestic product (GDP). This profit focus at the system level has operational implications. It means we approach sustainability through the lens of transaction costs, top-down hierarchies and risk mitigation tools. This is not working.” In recent years, a number of academics and activists have been advocating for degrowth — a managed reduction of the economy and new materials in order to keep human activity within planetary boundaries. However, the current mainstream understanding of degrowth is misinformed, says Karaosman. “Degrowth is the outcome, but the main objective is prosperity, creating harmony between natural and human resources. Right now, people are trying to frame degrowth as the objective. The same thing happened to sustainability, which is why we constantly fail to capture the real meaning of it. Degrowth must be understood as a strategy to help communities flourish and nature regenerate. So, prosperity becomes the objective of economic activity, not profit.” The elephant in the room Growth is steadily rising up the sustainability agenda, says BSR’s Wei, but many brands are still uncomfortable addressing it directly, because it speaks to an existential tension in their business models. One of the key challenges is finding a way to talk about growth that doesn’t alienate executives or demotivate individuals who see conversations that spiral into systems change as too far beyond their control. Last year, BSR staged a mock trial in Paris, hoping to engage executives in a more fruitful debate about degrowth. “In that setting, raising the question through a mock trial was a viable way of discussing a challenging topic. That won’t be the case everywhere,” says Wei. In other geographies or segments of the industry, it might be more effective to focus on smaller scale changes that not only align with degrowth, but could help act as a Trojan horse for systems change. However, the risk with making radical concepts mainstream is that they become diluted, and the language used to convince people of their value ends up flattening them, shoehorning them into the existing system and its metrics of success. A lot of brands are investing in circular business models as a sort of degrowth-lite, for example, but this can easily be mis-used to prop up business as usual, says Wei. “If we think about circularity as outputs becoming inputs, there might be certain forms that continue to promote growth and consumerism as we know them now. But, if people make products for durability and modularity, which attack planned obsolescence, and create business models based on services rather than products, that could start to shift us into a new system.” The spectrum of growth Some brands argue that growth can be a good thing — for example, if a business funds social impact work, more money equals more positive change. Critics counter that justifying environmental destruction on the basis of social good is a contradiction of terms. Environmental damage has a huge impact on society, and often impacts poor and marginalised communities in the Global South most. Other brands promote growth as a route to jobs, and suggest that degrowth equals unemployment, but experts question the quality of jobs that fashion’s growth model is able to provide, and say degrowth — if managed properly — could actually lead to more meaningful and just employment. In May, global commons alliance Earth Commission published a study attempting to quantify “safe and just” planetary boundaries. It proposes eight hard limits, which the authors say cover the major components of the earth system (atmosphere, hydrosphere, geosphere, biosphere and cryosphere) and their interlinked processes (carbon, water and nutrient cycles). What many businesses misunderstand, says BSR’s Wei, is that these boundaries are not loose advice, but the absolute limits within which human life can thrive. “The heatwaves we have been experiencing are a taste of the new normal. This will be the average if we don’t meet our climate goals. So, the question becomes: how do we fit financial growth within these hard limits?” Exponential growth and degrowth sit at opposite ends of a spectrum. In between, there are other growth models. Green growth implies that industries can continue to grow as long as production becomes more efficient. Then there are sufficiency policies, which the United Nations introduced in its most recent IPCC report, and which attempt to meet everyone’s basic needs while reducing harmful overconsumption. There’s also permissible growth, whereby a company or country determines that certain areas are permitted to grow despite their environmental impact, because they benefit the business or society in other ways. In fashion, one of the terms commonly used is “decoupling”, whereby companies attempt to separate financial growth from material resource use. This can happen on two scales: relative decoupling (which slows resource use but does not eradicate it entirely, and thus would not be enough to stay within planetary boundaries) and absolute decoupling (which leading research says is neither sufficient nor achievable). “The idea that we can meet emissions reduction targets without reducing volumes is delusional,” says FReSCH’s Karaosman. Others argue the opposite: that degrowth is a good idea in principle, but almost impossible to implement in reality. “Degrowth can’t just be one company or one sector or one geography committing to grow less. The others would just increase production in response and take the market share,” says Mauro Scalia, director of sustainable businesses at the European Apparel and Textile Confederation (Euratex). Euratex’s stance is that tighter regulations on the way products are made, consumed and disposed of is a more realistic route to sustainability. Scalia points to the incoming wave of European Union (EU) regulations, which promises to overhaul supply chains, reset brand strategies and change consumer behaviour. “Rather than speculating on the best case or the what if, we focus on mandatory regulations and guaranteeing compliance. Quantity can make a difference, but quality is key. Of course, there would be an environmental benefit if companies grew less, but people often underestimate the difference that product-level changes can make to emissions.” Emissions could actually rise Experts have long called for brands to update their targets to absolute emissions reductions, rather than emissions intensity reductions. Without this change, overall emissions are likely to rise further, even if the emissions intensity of each product decreases. Few have made the shift to date, though luxury group Kering is taking the lead. Beyond this, academic research paints a bleak picture of how far the “green growth” mentality is getting the fashion industry. Dr Heletjé van Staden, assistant professor of supply chain management at University College Dublin’s College of Business, is working with Karaosman, along with Donna Marshall, professor of supply chain management at Dublin, and Fabiola Schneider, assistant professor, on a study about supply chain decarbonisation, part of which explores how two fashion giants’ emissions are forecast to change in the next decade. Each has multiple subsidiary brands, and provides limited data about their emissions — a recurrent issue — but van Staden and her team are able to use the publicly disclosed brands’ supplier lists as a proxy to estimate production emissions. The study focuses on the top five supplier countries for each brand, making up about 80 per cent of their disclosed suppliers, as of 2023. “Assuming the suppliers use the energy available from their country’s grid, we can figure out the emissions intensity for the energy being used to produce goods, and forecast how that will shift in the next few years,” she explains. All but one of the suppliers the academics profiled operate in countries where the national electricity grid exceeds the EU’s limit for causing “no significant harm” to the environment (per its green taxonomy). “These fashion brands are not just overproducing, they’re likely contributing to an excessive amount of emissions because of where they produce,” says van Staden of the results. “Most countries and fashion brands with public targets aim to reduce emissions by 50-60 per cent by 2030. If production volumes remain the same, those grids would need to be decarbonised at five times faster than the current rate to even get close to such targets, against a 2021 baseline. Revenue figures reveal that production has likely already increased beyond 2021 levels,” continues van Staden. “What’s more, this is just the production emissions from manufacturing the garments. It doesn’t include the material or the fabric, the electricity for the warehouses, the heating, lighting, shipping or distribution. From what we’ve seen, these two brands are much more likely to increase their production emissions by at least 80 per cent by 2030, against a 2019 baseline.” The easy answer for brands might be to move their supply chains to countries where the carbon intensity of electricity is lower, but this wouldn’t be in line with a just transition, says Karaosman. “Brands cannot just leave these countries, they need long-term transition plans to get these countries on cleaner grids.” Transparency is key Without robust, transparent data, it’s difficult to assess the true impact of fashion’s attempts to curb emissions — with or without degrowth. Academics would like to see brands disclose three key metrics: production volumes, where production is happening, and how products are shipped between supply chain stages. It doesn’t stop there. Brands also need to share these metrics publicly, in a digestible and comparable way. At present, the few brands that do disclose production volumes regularly change the metrics they are using — from weight to units and back again — so progress is harder to measure. Specificity is key, says van Staden. One unit could mean one sock or one jacket. Even two socks could have totally different emissions footprints. There have been some attempts to aid this on the policy side. The EU has still yet to decide on a standardised framework for assessing the environmental impact of a product — France currently has as many as 18 potential methodologies under consideration — but this is in the works and could help brands to categorise units into buckets based on their footprint. The EU is also looking to mandate the disclosure of unsold goods, although it’s unlikely the governing body will address production volumes, or ask brands to reduce them, directly. With or without policy, the industry can’t put off talking about growth forever, says BSR’s Wei. “You might see reductions in years one and two, but there comes a point when the easy stuff is done. The lightbulbs have been changed, you’ve engaged with your suppliers and you’ve set up a sustainable supply chain finance programme. You start to face really tough problems that require substantial research and development, collaboration or business model change, just to continue on the path. Those later reductions will need a much longer lead time to set up. Whether you do it now or later, the relationship between growth and emissions needs to be on the table and examined frankly.” Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Greenhushing is on the rise. What do fashion brands need to know? How Mother of Pearl shifted to a more sustainable business model Why fashion brands are hiring transformation directors

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