According to
McKinsey, apparel companies need to wade deeper into supplier operations and
local policy in the countries where manufacturers are based to make the
required progress in halting global temperature rise to 1.5 degrees Celsius by
2030. Based on existing initiatives in reducing emissions from the clothing and
footwear sectors, as well as pre-pandemic output levels, industry emissions
would be twice the target number.
More than 70
percent of emissions from apparel and footwear comes from the supply chain
before most brands take possession of finished products, McKinsey reported.
According to
McKinsey, promoting energy transitions upstream is critical in the effort to
decarbonize the fashion industry, which places the energy share of the carbon
reduction requirements of the sector at 63%. Transitions to renewable energy
sources and energy efficiency improvements will also help to make progress on this
ranking.
Some luxury
companies have aggressive carbon-reduction plans. From 2020 and 2017 baselines,
Ralph Lauren and PVH vowed to reduce gross emissions by 30 percent by 2030,
respectively. From a 2015 baseline, Nike committed to reducing emissions from
its energy procurement and owned operations by 65 percent by 2030. But these and the dozens of other
textiles, apparel, and luxury retail firms that have joined the Science-based
Target's initiative represents a minority of global fashion brands.
McKinsey's
point is that purchaser-supplier partnerships need to develop depth and
complexity to reach global emissions mitigation commitments in line with the
Paris Accords.
Supplier
emissions are a growing issue for corporate sustainability, as businesses achieve
their initial targets of reducing the emissions of their own products and the
resources they buy for their own operations (Scopes 1 and 2). According to
McKinsey, these internal measures to minimize pollution meet only 18 percent
of the emission reduction needs of the apparel and footwear industry.
Doing the
same for suppliers, or encouraging suppliers to do it on their own, is the bulk
of the emission reduction work needed. The study points to longer-term
arrangements that contain provisions for buying electricity, which will place
manufacturers on a better footing to pursue energy conversion financing.
In addition
to the product balance of manufacturers, the move to environmentally renewable
products will have a positive effect on carbon pollution in the sector. But
this transition isn't as easy as asking partners in the lower supply chain to
import these products. Near-term
measures could raise additional costs, but McKinsey said that 55 percent of
the measures that businesses should take to mitigate pollution will lead to
cost savings.
The study
presents a solid fact when it comes to targets expanding past 2030, which is
where the most reported targets of reduction finish. "In order to remain
on the 1.5-degree path, the industry has to move beyond this view of rapid
deterioration to radically redefine market strategies and existing economic
development and growing consumerism imperatives" read McKinsey's
Report.
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