Big Fashion Falling Short of Much-Needed Climate Investments

A new report from Fashion Revolution, the world’s largest fashion activism movement, titled What Fuels Fashion, has revealed a number of stark findings about the fashion industry, which remains one of the most polluting industries.

The report is a special edition of Fashion Revolution’s annual Fashion Transparency Index.

It reviews and ranks 250 global leading fashion brands and retailers (turnover of US$400m and more) based on the public disclosure of climate and energy-related actions.

The report covers accountability, decarbonisation, energy procurement, financing decarbonisation, just transition and advocacy covering over 70 data points.

Fossil fuels being burned at every stage

Fashion’s impact on the environment remains high because fossil fuels are being burned at every stage of production. The report also found that despite the escalating climate crisis, big brands’ reduction targets are not ambitious enough to meet the global goal of limiting temperature rise to 1.5°C above pre-industrial levels.

Where companies could be investing in a fair transition away from fossil fuels to renewable energy like wind and solar to power the fashion supply chain in a clean way, fashion brands are shifting the costs onto factories they work with, burdening workers and communities with fixing a problem they did not create.

The report also showed that a majority of big fashion brands are not protecting their supply chain workers – with only 3% (just seven brands) disclosing efforts to provide financial support to workers affected by the climate crisis.

This is vital given the weak social protection in garment-producing countries and the poverty wages and high debt levels of these workers. Frequent climate events like monsoons, heatwaves and droughts are devastating to workers’ livelihoods. Fashion Revolution says that big fashion must urgently provide compensation mechanisms for these workers, not as charity but as a matter of justice.

Maeve Galvin, Global Policy and Campaigns Director at Fashion Revolution, says: “By investing at least 2% of their revenue into clean, renewable energy and upskilling and supporting workers, fashion could simultaneously curb the impacts of the climate crisis and reduce poverty and inequality within their supply chains.

“Climate breakdown is avoidable because we have the solution – and big fashion can certainly afford it.”

Decarbonising fashion’s supply chain

Less than half (43%) of brands are transparent about their energy procurement at the operational level and even fewer (10%) at the supply chain level.

There is a clear need for suppliers to receive funding to assist in cutting the reduction of greenhouse gas emissions. 94% of big fashion brands fail to disclose how much they are investing in supply chain decarbonisation.

Only 6% disclose contributions, often to joint climate funds like the Fashion Climate Fund and Future Supplier Initiative. These funds offer supplier loans for infrastructure like solar panels.

However, burdening suppliers with loans to meet brand climate targets is unfair and perpetuates existing power imbalances between fashion brands, their suppliers and the people who make our clothes.

There is clearly a need for long-term investment to decarbonise fashion’s supply chains. This clean, fair and just energy transition must be driven by fashion embracing long-term supplier relationships and financial investments through fair purchasing practices.

Integrated brands and specialised segments like sportswear outperform others due to greater leverage and commitment to long-term improvements. The renewable energy transition in fashion hinges on systemic changes that prioritise collective brand action, responsible purchasing and investment in a stable supply base.

Other vital findings

• Nearly a quarter of the globe’s biggest fashion brands disclose nothing on their decarbonisation efforts – with only four out of the 250 having ambitious emissions reduction targets to meet the level of ambition called for by the United Nations.
• 117 out of 250 brands with decarbonisation targets, 105 brands disclose updates on their progress – but 42 brands report increased scope 3 emissions against their baseline year. With the 2030 deadline to limit global warming to 1.5°C approaching in tandem with record-breaking heatwaves, the industry faces a critical challenge.
• 86% of companies lack a public coal phase-out target, 94% lack a public renewable energy target and 92% lack a public renewable electricity target for their supply chains.
• No major fashion brand discloses hourly matched supply chain electricity use. As a result, big fashion’s zero-emissions claims may be disconnected from grid realities, creating a false sense of progress against climate targets.
• Most big fashion brands (89%) do not disclose how many clothes they make annually.
• Nearly half (45%) fail to disclose how much they make or the raw material emissions footprint of what is produced.
• The fashion industry’s climate impact has largely been scrutinised through the lens of the materials used in our clothes rather than the manufacturing processes behind them. While 58% of brands disclose sustainable material targets, only 11% reveal their supply chain’s energy sources, meaning ‘sustainable’ clothes might still be made in factories powered by fossil fuels.

The overall average brand score is 18%, with the highest-scoring brands in 2024 including: Puma – 75%, Gucci – 74%, H&M – 61%, Champion – 58%, Hanes – 58%, Calzedonia – 52%, Intimissimi – 52%, Tezenis – 52%, Decathlon – 51%, ASICS – 50%, lululemon – 50%, Hermès – 49% and Adidas – 49%.

"A wake-up call"

PUMA’s 75% makes it the company with the highest score.

Anne-Laure Descours, Chief Sourcing Officer at PUMA, adds: “While we feel honoured that Fashion Revolution has ranked us as the best performer among the companies it examined, we know there is still a lot of work to do in our decarbonisation journey.

“We believe that the report should also be seen as a wake-up call. Much more needs to be done to get all stakeholders to work together to decarbonise our industry and our supply chains. We need to come together to find the solutions needed to achieve our climate goals.”

In 2023, PUMA set itself new greenhouse gas reduction targets, which were approved by the Science Based Targets Initiative (SBTi), after the company had reached its previous goals seven years ahead of schedule. By 2030, PUMA seeks to cut its absolute Scope 1 and 2 greenhouse gas emissions by 90% from a 2017 baseline year and has also committed to reducing absolute Scope 3 greenhouse gas emissions from its supply chain and logistics by 33% compared to 2017.

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