Towards A Collective Approach:
Rethinking Fashion’s Doomed Climate Strategy
Global denim suppliers identify a worrying disconnect between the industry pursuit of science-based targets and feasibility, equity and financing.
Updated January 8th, 2024. This update has no impact on the overall message of the report.
Watch this webinar in light of the launch of Transformers Foundation's deep dive report 2023 to reimagine a new collective approach to fashion’s climate strategy.
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A Collective Approach to Climate Action:
To effectively combat climate change in the fashion industry, we urgently need a collective approach. We define collective action as shared ownership and shared responsibility. This means shifting responsibility for climate action from suppliers to one that’s shared across the apparel value chain. Climate action must be our problem.
We define collective action as shared ownership and shared responsibility.
Collective vs. Non-Collective Approach:
Key Elements of a Collective Approach:
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We must shift from a singular focus on targets to finding ways to transform the broader financial, cultural, and social ecosystem that makes delivering climate action — and yes targets — possible.
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We must negotiate how equity (including factoring in margins and profits), historical emissions, and the common but differentiated approach laid out by the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 (which calls on “developed” nations to take the lead on combating climate change) should factor into targets and roadmaps.
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We must devise new funding models and come together to collectively fund decarbonization projects that offer no returns or very long payback periods.
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New targets and roadmaps should be built around a company’s potential to decarbonize, factoring in technical feasibility and context (such as regional or national-level conditions).
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For example, the industry might collaborate to address skilled labor shortages, set up access to purchasing-power agreements or fund experimental lower-carbon equipment. This also likely means targets and roadmaps need to be flexible and updated, shifting based on changing potentiality.
But we can't discuss a collective approach to climate action without first understanding why responsibility for climate change, as we currently approach it, unfairly places the burden on suppliers...
WHO SHOULD DO HOW MUCH?
The Supplier's Burden
The Paris Agreement set a collective society-wide goal to limit global warming to well below 2°C and to strive to limit it to 1.5°C. It was the Science Based Target initiative (SBTi), launched in 2015, that translated that goal for the private sector into science-based targets (SBTs).
Increasingly brands and retailers require (and SBTi recommends) that their suppliers set their own SBTs. The concept of science-based targets is promulgated by many other well-known multi-stakeholder initiatives.
Important! Science-based targets are flat targets. This means that all signatory companies commit to decarbonizing largely to the same extent and at the same pace.
*To be clear, this paper does not at all dispute the collective goal of the Paris Agreement. What our findings call into question is calling on all companies to set science-based targets.
They’re not equitable: Since most of fashion’s emissions are in global supply chains, flat targets require a lot more action from factories in Global South nations that on the whole have not contributed much to climate change, historically or presently. Plus, there’s a vast gap in margins and access to resources between brands and retailers, and their suppliers.
They’re not feasible for everyone: Suppliers identified layer upon layer of contextual factors outside of their control that determine their decarbonization potentiality. When we assign flat targets to all suppliers, some may be set up to fail through no fault of their own, leading to a collective failure in achieving climate goals.
Who pays?
The Supplier's Burden
Because most of the emissions are in the supply chain, it’s implicitly assumed that the suppliers will also be the ones to foot the bill.
Most available funding in the sector for factory-level decarbonization projects are, primarily, still debt-based — and thus assume that the work generates returns and that suppliers can take on debt.
Suppliers told us that they have two different funding needs, and face challenges for both:
WHO AND WHAT WILL DRIVE CHANGES?
The Flawed Top-Down Approach
The industry’s approach to sustainability, including the setting and meeting of SBTs by brands, is premised on the assumption that change must be directive and come from the top down. Brands and retailers should drive change through a top-down approach.
Dubious direction: This assumption results in solutions that may not be suitable for the diverse contexts in which suppliers operate. Brands and retailers, often sourcing from numerous suppliers across the globe, cannot possibly grasp all the nuanced contextual factors associated with each production location.
A narrow and privileged framing of climate change itself: Suppliers emphasized that the climate change conversation becoming synonymous with the word "decarbonization" reflects the brand-driven — and Global North-driven — nature of the conversation. Adaptation and mitigation – both of which are really important to suppliers since many of them operate in places and employ people extremely vulnerable to climate change – are overlooked.
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Regulation: The Dangers Of Setting Science-Based Targets Into Law
The paper looks at 3 examples of Global North legislation:
The EU Corporate Sustainability Due Diligence Directive (CSDDD)
The EU Corporate Sustainability Reporting Directive (CSRD)
The New York Fashion Sustainability and Social Accountability Act (The Fashion Act)
All three of the legislative efforts we examine emphasize — and in some cases mandate — science-based targets as a primary tool to reduce emissions or to demonstrate action around climate change in the private sector.
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