• Grace Kirkpatrick

Removing carbon from our closets

Part #1: What can the fashion industry do to decarbonize?


As mentioned in an earlier blog post by my colleague Alex, we believe that decarbonization will require a bottom-up effort. By bottom-up, we mean that it will necessitate consumers and businesses alike to make lasting changes (e.g., EVs, reusable bags, electric heating/ cooling, etc.).


The biggest challenge in fashion, relative to other industries seeking to decarbonize, is the level of multinational coordination and consumer cooperation required to achieve any level of carbon reduction.

The fashion industry (both apparel and footwear) currently accounts for ~8% of global carbon emissions (Source 1). To put that into perspective, the fashion industry is responsible for more emissions than the global shipping and aviation industries combined (Source 2). And those emissions from garment production and consumption are not just concentrated in a handful of countries. In fact, there are 19 countries which each export more than $10B worth of textile and apparel products annually (Source 3). While the fashion industry is undertaking decarbonization efforts, these initiatives will effectively only offset the industry’s growth and cap emissions at their present level by 2030 (Source 4).


Clearly, there is work to be done, so where to start? This first post of a two-part series will focus specifically on what the fashion industry can do to decarbonize, while the second will identify what actions consumers can take. With that, let’s dive in:


1. What are you wearing - improving the sustainability of materials used


Introduced in the 20th century, synthetic fibers have quickly become the dominant fibers in the fashion industry, hailed for their versatility and ease of care. These fibers are made from heavily processed petrochemicals (e.g., polymer chips, PET) and are energy-intensive to produce. Polyester, by far the most common fiber produced for apparel, was responsible for 700 million tons of CO2 equivalent emissions in 2015 alone - equal to the emissions of Mexico (Source 5).



The first step in decarbonizing the fashion industry? Scaling up production of alternative fibers (including synthetic, natural, and recycled fibers).


Several companies are pursuing the development and production of alternative materials - e.g., Lenzing, Kintra Fibers, Bolt Threads, MycoWorks, Infinited Fiber, REPREVE, just to name a few. Which companies end up becoming major suppliers really is a question that the brands will decide, but it’s clear that there are many more climate-friendly options today than sustainable cotton or wool.

2. Yes, your freshly laundered clothes are dirty - reducing production process emissions


Approximately three-quarters of the fashion industry’s climate impact comes from the garment manufacturing process. Not only are the processes energy-intensive (e.g., heating large amounts of water in wet processes for Dyeing and Finishing), but also the power being supplied is “dirty”. For instance, during Dyeing and Finishing, 60-70% of the climate impacts are from using an energy supply dependent on hard coal and natural gas (Source 7).



The most impactful area to target to accelerate the current rate of emissions abatement for the fashion industry? You guessed it, energy usage, especially in the production process.


McKinsey & Co. estimate that ~1,050 million tons of annual CO2 equivalent emissions could be abated by 2030 through energy efficiency improvements and energy mix transition to renewables (Source 9). So, which stakeholders will take the lead on reducing energy-related emissions?


Brands will play a key role in supporting the energy transition across their supply chains (and across the countries in which their supply chains are located). Potential methods for promoting renewable energy by brands include: securing power purchase agreements (PPAs), incentivizing the purchase of Energy Attribute Certificates by supply chain companies, and setting concrete corporate decarbonization goals (Source 10). Additionally, there are investors, like the Good Fashion Fund, that are helping to finance energy efficiency and other sustainability-oriented projects. Lastly, governments will be involved in the energy transition by setting emission reduction goals, implementing targeted policies to reach those goals, and encouraging other governments to follow suit.


3. We’re paying a high price (in CO2 emissions) for items on sale - adjusting fashion line production amounts


You don’t have to look far to see shocking headlines about luxury retailers burning merchandise worth millions of dollars on a yearly basis. But this problem of overproduction is not isolated to high-end brands, it has permeated all levels of the fashion industry.


And it has existed long before COVID-19 left retailers with abnormally high levels of inventory. Pre-COVID, the fashion industry was already trapped in a cycle of overproducing, discounting, and discarding, where only 60% of clothes were actually sold for full price (Source 11).


Yet in the aftermath of the pandemic, fashion industry executives are showing a willingness to break this cycle. A recent survey conducted by Business of Fashion and McKinsey & Co. reveals that 60% of executives are planning to implement better analytics for consumer demand insights and 43% plan to reduce product development lead times to avoid overstocking (Source 12).


That’s a great start, here’s what else we would suggest:

  • Reduce scrap material waste by improving product designs. Approximately 15 to 20% of fabric produced is wasted during garment creation, ending up on the cutting room floor (Source 13). And while reducing overproduction will inherently help with this problem, smarter clothing design (paired with recycling remaining scrap materials) could bring the production waste closer to zero.

  • Simplify inventory by reducing the number of SKUs and departing from the seasonal collection schedule. Brands including Victoria Beckham, Nike, and Coach have each made announcements about streamlining the number of SKUs that they offer. Additionally, designer brands including Off-White, Tory Burch, and Mugler are moving away from the seasonal delivery calendar (Source 14). Momentum is building, and we expect to see similar announcements from other major brands as they look to reposition post-pandemic.

  • Lean into made-to-order, push forward local production capability. The only true way to get to zero inventory waste is to have each product sold be made-to-order for that specific consumer. While this has historically been much more expensive than mass-produced clothing items, technology can be leveraged to reduce the cost (e.g., online ordering vs. brick-and-mortar store, apps that can take body scans/ measurements, etc.). Moreover, bottom-up decarbonization in the industry can be furthered through reducing the distance between point of production and the end user. As with made-to-order, technology will also have a crucial role to play here to make this cost-competitive in many areas. There are several companies that are currently pursuing the automation of sewing lines - SoftWear Automation, Automatex, ACG Kinna Automatic, among others.


Have thoughts on decarbonization in the fashion industry and what it will take? I’d love to connect, reach me at gk@keyframecapital.com. Be sure to check back for the next blog post on what role consumers will play in decarbonizing the fashion industry!



Sources:


1, 7, 8) Quantis, “Measuring Fashion: Environmental Impacts of the Global Apparel and Footwear Industries Study”: https://quantis-intl.com/wp-content/uploads/2018/03/measuringfashion_globalimpactstudy_full-report_quantis_cwf_2018a.pdf


2) BBC, “Can Fashion Ever be Sustainable?”: https://www.bbc.com/future/article/20200310-sustainable-fashion-how-to-buy-clothes-good-for-the-climate


3) globalEDGE, “Apparel and Textiles: Trade Statistics”: https://globaledge.msu.edu/industries/apparel-and-textiles/tradestats


4, 9, 10) McKinsey & Company, “Fashion on Climate: How the Fashion Industry Can Urgently Act to Reduce Its Greenhouse Gas Emissions”: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/fashion%20on%20climate/fashion-on-climate-full-report.pdf


5) Changing Markets Foundation, “Fossil Fashion: The Hidden Reliance of Fast Fashion on Fossil Fuels”: http://changingmarkets.org/wp-content/uploads/2021/01/FOSSIL-FASHION_Web-compressed.pdf


6) Textile Exchange, “Preferred Fiber & Materials Market Report 2020”: https://textileexchange.org/wp-content/uploads/2020/06/Textile-Exchange_Preferred-Fiber-Material-Market-Report_2020.pdf


11, 12, 14) McKinsey & Company, “The State of Fashion 2021”: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/State%20of%20fashion/2021/The-State-of-Fashion-2021-vF.pdf


13) Grist, “A Scrappy Solution to the Fashion Industry’s Giant Waste Problem”: https://grist.org/article/a-scrappy-solution-to-the-fashion-industrys-waste-problem/



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