Fashion brands set to fail their own climate goals as overproduction fuels emissions, analysis shows

“We have failed to move things along.”

This was the surprising admission made by an industry executive speaking at this year’s Global Fashion Summit – a sustainability event held in Copenhagen in May. 

“I am quite disappointed in all of us, myself included,” Eva Kruse, Chief Global Engagement Officer at Pangaia – an environmentally-conscious fashion brand – had told the audience moments earlier. 

Kruse organised the first iteration of the summit 15 years ago, but conceded during her panel that the sector had since made very little progress on sustainability. This year’s conference mainly consisted of sponsored content, hollow phrases (“The era of implementation is here”), and praise for minor green initiatives funded by the industry.

Kruse’s candour comes at a critical time for fashion in the face of the deepening climate crisis. The apparel industry is regularly ranked by researchers as one of the world’s most polluting industries, with different studies estimating that it is responsible for between 2 per cent and 8 per cent of global carbon emissions. 

With the sector’s carbon footprint predicted to grow at a rate that would far outweigh the maximum level needed to stay on course for the Paris climate agreement’s 1.5-degree Celsius warming threshold, fashion heavyweights have increasingly vowed to make their operations greener and cleaner – and lauded their own fledgling efforts.

In recent years, the world’s 10 largest fashion companies in terms of turnover – LVMH, Nike, Inditex, Shein, Adidas, H&M, Kering, Chanel, Fast Retailing and Hermès – say they have managed to reduce carbon emissions per product, according to their sustainability reports. 

Yet leading apparel brands are making these claims as they expand their product ranges and sell more and more clothes – a trend that is fuelling an increase in overall emissions. 

An analysis by Follow the Money of the aforementioned fashion firms’ Scope 3 emissions found that all but one of the brands had recorded a rise over varying timeframes between 2015 and 2023. Scope 3 emissions are all indirect emissions throughout a company's value chain.

“I am quite disappointed in all of us, myself included”

For example, between 2021 and 2022, Chinese fast fashion giant Shein’s production volume rose by 57 per cent, and its emissions grew by 52 per cent. So while Shein’s carbon impact per product was slightly lower, the company’s absolute emissions hit a record high: more than 9 million tonnes of CO2. 

Emissions from established fashion houses such as LVMH – the parent company of Louis Vuitton, among others – have also grown. Between 2019 and 2023, its emissions per product fell by 30 per cent, but absolute emissions rose by 120 per cent. The one outlier among the ten brands analysed is H&M: both its emissions per product and absolute emissions decreased between 2019 and 2023, by 23 and 22 per cent respectively. 

Yet it was also the only one of the 10 brands whose growth suffered: the Swedish retailer’s turnover fell by 6 per cent in the period analysed. 

Can’t change, won’t change?

At last month’s fashion summit, Kruse said overproduction was a fundamental issue.

Sustainability experts and research institutions interviewed by Follow the Money said that consumers should buy less clothing, fashion companies must produce and sell fewer items and make their production processes more efficient to curb emissions, while governments need to force the industry to reduce its ever-growing volumes. 

The concern, according to such academics and thinktanks, is that the industry is either unwilling or unable to enact change to meet 2030 climate targets, and that measures imposed on fashion brands by the European Union, for example, do not go far enough to challenge the status quo. 

Some major fashion brands say they are aware of the problem when it comes to production volume and carbon emissions. Shein, for example, writes on its website that the increase in overall emissions is due to “the strong growth of our business”. And in its 2023 sustainability report, Nike writes: “As a growth company, decoupling our total emissions footprint from unit growth remains a critical challenge as we strive to reach our absolute carbon targets.”

Yet despite this recognition, 88 per cent of fashion brands don’t disclose their annual production volumes – which masks the scale of overproduction in the industry – while 99 per cent have not committed to reducing the number of new items they produce, according to Fashion Revolution’s 2023 Transparency Index.

Follow the Money asked five major brands – H&M, Inditex, Nike, Adidas and LVMH – about whether they planned to reduce production volumes. 

H&M was the only one to answer the question, saying in an email that it chose not to disclose its production volumes or any such projections. However, the company said that it aimed to double its sales and halve its carbon emissions by 2030 at the latest, and that it “sees significant opportunities to grow in a way that respects the limits of the planet”.

Five new items of clothing each year

Amid growing scrutiny of the fashion industry’s various impacts on the planet – from limited textile recycling to deforestation and water consumption, to name a few – the Hot or Cool Institute examined how the sector could get their emissions in line with the Paris climate agreement’s 1.5-degree Celsius target. 

In 2022, researchers at the Berlin-based sustainability thinktank concluded that the 2030 reduction target  can be met if consumers buy no more than five new items of clothing a year. 

In its calculations, the Hot or Cool Institute estimated that the fashion industry’s share of global CO2 emissions stood at 4 per cent (a proportion it called ‘conservative’ in its report) and that the sector would have to bring down its emissions to 1.1 billion tonnes by 2030. This amounts to a reduction of between 50 and 60 per cent compared to levels in 2018. 

88 per cent of fashion brands don’t disclose their annual production volumes 

“Five [items of clothing] may sound radical at first,” Luca Coscieme, lead researcher of the Hot or Cool Institute’s report, told Follow the Money. 

“But for most European countries, this corresponds to returning to per-capita consumption levels comparable to the first decade of the 21st century. What makes them radical now is the rapid increase in fashion consumption, mostly due to the rise of fast fashion.” 

The G20 nations with the largest average carbon footprint from fashion purchases are Australia, where people buy about 20 pieces of clothing a year (resulting in 503 kilos of CO2 emissions), Japan with 16 items (390 kilos of CO2) and the United States on 15 items (387 kilos of CO2), according to Hot or Cool Institute.

Based on an analysis of 12 countries in the G20, the thinktank found that the 20 percent highest income earners are responsible for at least 40 percent – and in some countries even up to 90  percent – of fashion consumption emissions. 

“For a fair and equitable transition, the emissions of the rich, in particular, must be reduced,” said Coscieme. He argued for “fair consumption for all”: in other words, a level that allows people to afford decent clothing without further endangering the environment. 

Getting greener – but is it enough?

To achieve this, Hot or Cool Institute examined the potential of two solution paths: making the production process more efficient, and reducing the quantity of products sold.

Efficiency  measures being implemented by the industry include substituting new polyester with recycled polyester, electrifying factories and using advanced software to better estimate the demand for products − so that brands stop making items that are not selling.

Many fashion brands have hailed their use of such measures. For example, Nike writes in its sustainability report that it is focusing on using more sustainable materials, while Inditex says it wants to use sustainable jet fuel to reduce air cargo emissions. 

These strategies cut emissions to some extent, but experts warn that they don’t go far enough – and won’t be enough without people also buying fewer items. 

Through efficiency measures, Hot or Cool institutes estimates that the industry could reduce emissions by up to 155 kilos of CO2 per person annually. 

But to achieve this reduction, the industry needs to accelerate the rate at which they implement these measures. For example, 100 per cent of garment factories in key manufacturing countries would have to run on renewable energy by 2030, 20 per cent of products would have to be made with recycled materials (up from the current less than 1 per cent), overproduction would have to be reduced to 10 per cent, and 90 per cent of parcel delivery vehicles would have to be electric, among others, the thinktank found based on an analysis of other research into fashion and decarbonisation. 

“This seems very unrealistic,” Coscieme said. “For most of the processes considered we are not seeing fast enough changes in this direction. I think it is fair to say they are over-optimistic assumptions and not supported by research evidence.”

If the fashion industry’s decarbonisation efforts continue at their existing pace, emissions will be capped at around 2.1 billion tonnes a year by 2030. That’s almost double the maximum levels required to keep to the 1.5-degree pathway, according to a 2020 report by McKinsey & Company and Global Fashion Agenda. 

On their current trajectory, the sector’s efficiency measures would be just enough to offset the additional emissions resulting from expected volume growth – meaning that they would not deliver any absolute reduction, the research found.

Tackling overproduction as the priority

That is why researchers are calling for measures to reduce the number of fashion items sold.

The Hot or Cool Institute suggests encouraging markets for second-hand, unused or rented clothing, as well as washing clothes less frequently. The thinktank estimates that these measures will result in a reduction of between 8 and 145 kilos of CO2 per person.

However, the biggest impact can be achieved by people buying less clothing. Anyone who purchases ten fewer pieces of clothing per year would reduce their carbon footprint by 250 kilos of CO2. For people who currently buy 15 items or less per year, that would be more than enough to get their emissions directly below the annual per capita target of 128 kilos of CO2. Yet this solution would require a huge shift in people’s spending habits.

“Consumers are constantly nudged towards unsustainable and excessive consumption levels,” said Coscieme, who believes that the responsibility for reducing production volumes primarily lies with policymakers and brands.

Major fashion companies have disclosed little in the way of initiatives to tackle the ever-growing mountain of products. Some companies such as Inditex and Shein have launched apps to make it easier for consumers to repair clothes or sell them to others, and H&M told Follow the Money in an email that it is testing various circular business models, including an option to rent clothes.

However, it is estimated that as of 2019, circular business models, like reselling or renting clothes, accounted for only 3.5 per cent of the total fashion industry – and that share is mostly credited to independent platforms such as Vinted and ThredUp. 

Based on an analysis of the sustainability plans of 52 major fashion brands, advocacy organisation Remake argues that such revenue models are not intended to replace new clothing sales.

‘Educating’ fashion companies

Sustainability experts say governments can force the change required, but that they do not appear intent on making the industry lower its production volumes. One example is the hefty package of measures the European Union has rolled out over the past five years to “drive fast fashion out of fashion”. 

These include improving product quality and banning the burning of unsold clothes, combating greenwashing, making brands responsible for collecting discarded clothes and ensuring information on sustainability features is more accessible to consumers.

Yet measures directly affecting the quantity of products producers make or consumers buy – such as a ban on fast fashion advertising, a production quota or eco-tax – are nonexistent.

As long as the European Commission does not dare to question infinite growth, it can only ever make incremental tweaks to a system that is fundamentally running in the wrong direction.

Some scientists are concerned about this. In a 2023 opinion article in the academic journal Nature and Circular Economy, nine academics complained that sustainability in the fashion industry to date mainly boils down to “simplistic measures”. 

“Even the most sustainable fabrics that can last for decades without wear and tear will not solve the short-life problem,” they wrote. “Even well-made clothes go out of fashion.”

Kate Fletcher, professor of sustainability, design and fashion at the Royal Danish Academy, was also critical of the status quo: “As long as the European Commission does not dare to question infinite growth, it can only ever make incremental tweaks to a system that is fundamentally running in the wrong direction,” she told Follow the Money.

During her panel at the Global Fashion Summit, Kruse of Pangaia could not come up with an answer when asked for an example of a tangible change towards sustainability in the fashion industry. Instead, she reflected on the behaviour of clothing brands – criticising some for their “business models at the lowest denominator”.

Kruse also questioned whether there needed to be legislation on the sector.

“We can’t apparently solve this on our own,” she told the audience.