Environment Social and Governance (ESG) & Fashion | A Love-Hate Relationship

The textile industry is approaching a sustainable shift with impending regulations and Environment Social and Governance (ESG) ratings being used to monitor companies’ next steps. As overconsumption is still being fuelled by fast fashion, how will the textile industry cope with this nearing transition?

To receive the Luxiders Newsletter, sign up here.

Environment Social and Governance (ESG) ratings are a valuable tool to measure companies’ efforts and compare different approaches across the whole industry. Using recently conducted research on the textile industry and ESG ratings by Julius Baer, Luxiders Magazine explores the opportunities and threats that influence how this sustainable shift can be navigated.

ENVIRONMENTAL IMPACTS ALONG THE TEXTILE VALUE CHAIN: AN OVERVIEW

According to the report, fossil fuels, energy, water and chemicals are the “most important sources of environmental impact”, affecting the global value chain through many different industries. Every step along the way creates its own type of environmental burden, from extracting raw materials all the way to the disposal of the product in landfill.

CARBON FOOTPRINT

The textile industry, on the consumer-side, causes the “fourth-highest load of greenhouse gas emissions” producing roughly 5% of global emissions, behind housing, transport and food. Every year, the entire textile industry is responsible for 2%- 8% of global greenhouse gas emissions.

WATER USE

A significant amount of water is used throughout the textile value chain, its main use is for “cotton cultivation” and for wet processes, such as “dyeing and bleaching.” The industry doesn’t only waste a large amount of water, but it’s also responsible for around 20% of global clean water pollution.

TOXIC CHEMICALS

Despite an increase in use of natural fibres to produce textiles, the report emphasises that “even fabrics made from 100% natural fibres” consist of chemicals that are, more often than not, toxic. Within the manufacturing process alone, there are “over 15,000 different chemicals” that are used. This ranges from the pesticides used on crops, all the way to finishing processes such as dyeing. Per each kg of textile produced at a European textile-finishing company, almost 50% is made up from chemicals.

MICROPLASTICS

The abrasion of fibres occurs throughout virtually every part of the textile value chain, even when doing laundry. Microplastics are toxic for the planet, ending up in the sea, air and soil, and are even ingested by animals and humans, causing severe “health hazards”. As concerns rise, so does the accumulation of these microfibres and, with plastic unable to biodegrade, this issue is a permanent threat. 

WASTE

Every second, the equivalent of a rubbish truck full of clothes ends up in landfill. According to the report, half of the exported fast fashion products that get sent overseas as “products for reuse” are not even usable. Damaged, stained or even clothes that aren’t climate-appropriate can’t be worn and, as a result, get sent to landfills, destroying the local ecosystems that are burdened with continuous imports. As these clothes are mass produced and cheaply made, they are often manufactured with synthetic materials and toxic dyes, becoming poisonous for the local people and planet.

FINDINGS & CONCLUSIONS: BUILDING A SUSTAINABLE TEXTILE SYSTEM  

THE TEXTILE INDUSTRY HAS “HIGH POTENTIAL” FOR LOWERING ITS ENVIRONMENTAL IMPACT

As mentioned earlier, the textile sector produces up to 8% of global greenhouse gas emissions. It is also assumed that the resource-intensive textile industry is responsible for 1 in 20 releases of greenhouse gas emissions, according to the research by Julius Baer. However, Julius Baer also claims that the textile sector has “high potential” for lowering environmental impact. Despite the high intensity of production and maintenance, the overproduction and low use-per-item in the textile sector mean that the quantities consumed are “lower compared to the other resource-intensive sectors”. Therefore, for the textile industry, lowering its environmental impact isn’t as far out of reach as maybe once thought.

LONGEVITY IS CRUCIAL TO REDUCING OUR CARBON FOOTPRINT

Wearing our items of clothing twice the amount that we normally do would significantly help lower the environmental impact of the textile industry. In fact, it has the potential to cut our carbon footprint in half, according to a 2019 study conducted by Julius Baer.

“Slow fashion” is a term that has frequently circulated in the fashion industry. It involves consumers buying less and investing more in quality items, wearing them for longer and also exploring circular practices such as resell, swapping and renting. Therefore, garments are prevented from being thrown away after they’re no longer wanted, staying out of landfill.

An increase in slow fashion also means with a decrease in demand for clothing, garment workers that are usually under immense pressure would have better working conditions, being “safer and less stressful”. Whether it’s the consumer wearing the item of clothing for longer, or companies investing in higher quality materials and exploring resale and renting, slow fashion can be incorporated into both consumerism and business, positively impacting the textile industry overall. Slow fashion and increased longevity throughout the textile sector is the key to rating high on ESG factors, presenting itself as “one of the strongest reduction levers” for environmental impact.

OVERCONSUMPTION IS STILL A MAJOR BARRIER TO SLOWING DOWN THE FASHION INDUSTRY

Overconsumption is an ongoing issue that has hung over the textile industry for decades.

The desire for instant gratification has continuously been satisfied by the availability of global manufacturing, and fuelled by fashion trends featured through the media over the years. As a result of the rise in consumerism during the late 20th century, textile fibre production doubled from 1975 – 1990, and from the late 90s to now, it’s doubled yet again. By 2020, the average consumer was spending 5% of their income on clothing, falling from 12% in 2009. To add more perspective, in the 1950s before global mass production and “fast fashion” became commonplace, the average consumer spent around 30% of their income on clothing.

Despite recent surveys finding more consumers that claim “sustainability is important”, fast fashion brands fuel a large attitude-behaviour gap, offering desirable price and availability to consumers. The habit of overconsumption doesn’t only drive damaging throw-away culture, it also feeds into the exploitation of garment workers who are under constant pressure to meet the unnatural demands of new fashion. Often working overtime, the workers generally don’t earn a decent living wage.

ESG RATINGS HAVE FOUND WAYS TO PUSH COMPANIES’ SUSTAINABLE EFFORTS FURTHER

Julius Baer’s ESG ratings are conducted under a framework consisting of four scores. These include: climate score, natural capital score, human capital score and governance score. The ESG ratings of large textile-related companies reflect the “extent of their involvement”, with the high-scorers being viewed as the most suitably equipped for a sustainable transition.

Using this framework, Julius Baer found that reducing the burden on the environment most effectively would involve a “downsizing of the clothes manufacturing sector”, whilst also introducing services such as a “functioning textile recycling system” to reduce the waste problem that currently overwhelms the textile industry.  

In order to motivate and improve sustainable efforts from companies, impending regulation could catalyse this transition to sustainable clothing. For example, quality standards to support recycling systems and also increase longevity.

It is inevitable that the textile industry will face the approaching regulations for improving environmental impact and reducing carbon emissions. However, Julius Baer states that this sector especially has the potential to cope with the pressure, due to the low quantities consumed in contrast to the high intensity of production. Still, overconsumption presents itself as a barrier to change, but slow fashion is the determining factor to reduce carbon emissions, both for consumers and companies. Overall, textile-related companies with high ESG ratings appear to be on track to discover innovative solutions whilst being able to endure the initial strain that regulation will cause, making important changes and preparing for a sustainable transition. 

+ Highlight Image: © Unsplash

Words:
Jemima Patterson
Luxiders Magazine