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Reduce carbon footprint from the fashion industry is a must

Fashion makes a sizeable contribution to climate change. A report released by Consulting group McKinsey shows that the global fashion industry produced around 2.1 billion tonnes of greenhouse gas (GHG) emissions in 2018, equalling 4 per cent of the global total. This is the equivalent to the combined annual GHG emissions of France, Germany and the United Kingdom.

The report outlines areas in which players can focus their efforts to meet climate targets. It also quantifies the economics of accelerated abatement, comparing necessary investments and resulting savings, based on a holistic fashion industry GHG emission abatement cost curve.

If no further action is taken over the next decade beyond measures already in place, the industry’s GHG emissions will rise to around 2.7 billion tonnes a year by 2030. To not to exceed the 1.5 Celsius degree mentioned by the United Nation’s Intergovernmental Panel on Climate Change (IPCC), fashion would need to cut its GHG emissions to 1.1 billion metric tons of CO2 equivalent by 2030. Unfortunately, only approximately 50 fashion companies have been committed to the science-based targets aligned with the agreement yet.

“Accelerating emission abatement through the actions identified in our analysis calls for bold commitments from stakeholders across the value chain,” reads the report. “These commitments need to be supported by equally bold actions, greater transparency, increased collaboration, and joint investment. After 2030, the challenge becomes still greater. To stay on the 1.5-degree pathway, fashion will need to go beyond the accelerated abatement envisaged in our analysis and deploy all its ingenuity and creativity to decouple value creation from volume growth.”

McKinsey examined the entire value chain from farms and factories to brands and retailers to policymakers, investors and consumers and identified a need for concerted action in three key areas.

Firstly, reducing emissions from upstream operations, which involves decarbonised material production, minimised production and manufacturing wastage and decarbonised garment manufacturing. Together it could deliver 61 per cent of the accelerated abatement. Furthermore, improvements in energy efficiency and a transition from fossil fuels to renewable energy sources could deliver about 1 billion metric tons of emission abatement.

Secondly, reducing emissions from brands’ own operations. Improved material mix, the increase of sustainable transport, improved packaging, decarbonised retail operations and minimised returns could deliver 149 million tonnes of GHG emissions savings. What is also important, reduced overproduction is a key lever that could reduce emissions by around 158 million tonnes. Due to overproduction, 40 per cent of garments are currently sold at a markdown. Together they mean 19-20 per cent of the accelerated abatement.

And last but not least, another 20-21 per cent is from encouraging sustainable consumer behaviour. McKinsey highlights that around 21 per cent of accelerated abatement potential is directly related to consumer actions in the use phase and end-of-use phase, enabled by conscious consumption and new industry business models.

Therefore, it is essential that by 2030, we need to live in a world in which one in five garments are traded through circular business models. Circular business models are key decarbonisation levers because of their ability to extend product life, enable recycling and reduce the need for new and finite resources in production.

The good news for the fashion industry is that 90 per cent of the measures would cost less than 50 dollars per metric ton of GHG emissions abated. What is more, around 55 per cent of the measures would lead to net cost savings for the industry.

Fortunately, the report also mentioned some positive news.

“Two-thirds of consumers say it has become even more important to limit climate change following COVID-19,” reads the report.

Moreover, sustainability issues are also attracting increasing attention at the executive level. Some 50 per cent of fashion executives in a recent opinion poll indicated that sustainability has moved up the agenda in recent months.

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