ACTIONS ON SUSTAINABILITY BY WORLD’S LEADING FASHION COMPANIES FALL SHORT OF COMMITMENTS, NEW STUDY FINDS
The inaugural BoF Sustainability Index found that the world’s largest fashion companies’ public sustainability commitments are outpacing concrete actions.
LONDON, 22 March 2021 — Today, The Business of Fashion (BoF) released the inaugural BoF Sustainability Index, assessing sustainability initiatives at the world’s largest fashion companies. The Index finds companies’ commitments are far outpacing concrete actions.
The goal of The BoF Sustainability Index is to measure the fashion industry’s actions towards urgent sustainability targets by evaluating the progress of the five largest publicly-traded fashion companies in three core sectors: luxury, high street and sportswear. The Index uses 338 different metrics to assess companies’ progress towards 16 ambitious targets within the six categories: Transparency, Emissions, Water & Chemicals, Waste, Materials and Workers’ Rights.
Companies are scored in each category based on public disclosures. Their overall score represents an average of their performance across categories. Of the companies surveyed, Kering was the top performer with the highest overall index score of 49 points, Nike was just behind with an overall index score of 47 points. Richemont and Under Armour achieved the lowest overall index scores of 14 and 9 points respectively.
KEY FINDINGS BY INDUSTRY SECTOR
LUXURY
- Kering emerged as the leader among the companies (49 points) scoring highly in the transparency category as a result of longstanding efforts to measure its impact and map its supply chain
- Richemont was the lowest performer (14 points), scoring particularly low in the water and chemicals area
- Out of the luxury companies surveyed, PVH Corp achieved the highest individual score on emissions (70 points), indicating a strong framework on targets to reduce emissions to levels aligned with global climate goals
HIGH STREET
- H&M Group and Levi Strauss & Co took the top spot among high street companies with a score of 42 points each, both performing strongly on transparency and emissions
- Fast Retailing came in at the bottom of the market segment with an overall score of 23 points due to poor scores in waste and materials
- Levi’s score on emissions (78 points) was the highest of the market segment and also of all 15 companies surveyed
SPORTSWEAR
- Nike took the top spot on the sportswear category (47 points), with above average scores on transparency (71 points) and emissions (61 points)
- Under Armour was the worst performing brand (9 points), achieving some of the lowest scores in the Index on water & chemicals and materials and a score of zero on emissions
- Sportswear companies showed the largest discrepancy between best and worst performers, with a gap of 38 points between Nike and Under Armour’s scores
The targets were designed in close consultation with an external council of global experts, and offer a rubric for fashion companies to establish more environmentally and socially responsible business practices by 2030, a critical milestone to achieve global sustainability goals. Measuring performance is complicated by a shortfall in clear, consistent and quality data, reflecting a wider accountability gap when it comes to tackling environmental and social issues.
To compile the Index, BoF established an independent advisory council of global experts in environmental and social sustainability to create the robust methodology used to score the companies (read the full methodology on pages 38-41 of the report or see the FAQs). Members include:
- Nazma Akter, Bangladesh, Founder and Executive Director, Awaj Foundation
- Ayesha Barenblat, USA, Founder & CEO, Remake
- Anannya Bhattacharjee, India, International Coordinator, Asia Floor Wage Alliance
- Boma Brown-West, USA, Director, Safe and Healthy Products, Environmental Defense Fund
- Dawn McGregor, Singapore, Business Unusual Lead, China Water Risk
- Linda E. Greer, USA, Global Fellow, Institute of Public and Environmental Affairs
- Daniela Ibarra-Howell, USA, CEO and Co-Founder, Savory Institute
- Edwin Keh, China, CEO, The Hong Kong Research Institute of Textiles and Apparel
- Fiona Lang, China, Partner, SynTao Sustainability Consultancy
- Laila Petrie, UK, CEO, 2050
- Michael Sadowski, USA, Independent Sustainability Advisor
- Shamistha Selvaratnam, The Netherlands, Gender Lead, World Benchmarking Alliance
The data reveals significant disparities across different industry sectors and models in both progress and disclosure:
- The companies earned an overall score of 48 points in Emissions. Companies have widely adopted rigorous targets to reduce greenhouse gas emissions, but there is limited evidence that impact is decreasing in line with these ambitions.
- Transparency tied with emissions with a score of 48 for all companies overall. Progress is heavily skewed towards risk assessments and high-level analysis. Data is limited, hard to find and often of dubious quality, while efforts to establish transparent supply chains are lagging.
- Companies’ performance on Water and Chemicals was given a score of 36 points. Companies are becoming more sophisticated in efforts to address their part in the global water crisis, but efforts to tackle pollution need more momentum.
- Companies achieved 31 points overall on Materials. Companies have set bold ambitions to shift to more sustainable materials, but they are almost wholly relying on certifications and raw material supply chains remain a dangerous blind spot.
- Companies achieved an overall score of 27 points for Workers’ Rights, which demonstrates companies are not moving beyond frameworks that have failed garment workers for years.
- Companies scored the lowest on the Waste category, achieving less than a quarter (24 points). Though companies frequently market collections made from recycled polyester and talk about circular business models like resale, this score reflects the fact that action on this front is still in the early stages.
Overall, the companies performed best on emissions and transparency (48 points), reflecting more mature commitment. Transparency fuels the Index and is considered a critical foundational step to identify strategic focus areas, track progress and hold companies to account. The deadline to achieve targets in this category was set for 2022 and with less than one year to go, the companies are on average just halfway there.
The lowest scores were awarded across the board on workers’ rights (27 points) and waste (24 points), reflecting a stricter requirement to demonstrate progress beyond existing labour standards and the substantial work that will be required to develop a more circular economy.
MOVING FORWARD
This report is the first in a series of analyses based on the underlying data from The BoF Sustainability Index in the lead-up to the United Nations Climate Change Summit to be held in Glasgow, UK from 1–12 November, 2021. The Index sets out seven key takeaways and tactics for companies to improve their results and demonstrate progress in a timely and transparent way:
- Discourse Outpaces Action. Simply stating an ambition is not good enough - companies need to move past target setting and demonstrate progress
- Tackling the Trust Deficit. The fashion industry needs to fix its misinformation problem by creating truly transparent supply chains and publishing quality data.
- The Finance Gap. Companies are not matching sustainability targets with details of how they plan to pay for them. Brands and their suppliers need to share the cost of transitioning the industry to a more sustainable model.
- The Growth Conundrum. New technologies and business models are required for companies to continue to grow while limiting their environmental impact.
- Collaboration With Clout. Fashion’s leaders need to push for impactful and inclusive industry-wide efforts to enable clearer accountability and swift common action that moves the industry beyond the current baseline.
- A New Social Contract. Fashion must finally get to grips with systemic inequalities in its supply chain, ensuring purchasing practices support safe and equitable working conditions and living wages.
- Pushing Boundaries. Fashion is embracing the concept of positive impact, with companies increasing their focus on areas like biodiversity and regenerative agriculture. But more work is needed to ensure these efforts result in action rather than simply a new set of buzzwords.
Imran Amed, Founder and CEO of The Business of Fashion, said: “Our inaugural BoF Sustainability Index aims to measure the commitments and actions of the fashion industry’s largest companies as an indicator of overall industry progress in avoiding catastrophic climate change. Over the past few years, brands have become more vocal in their ambitions to become more responsible on environmental and social issues, which is welcome, but tangible action is crucial to ensure the industry is working towards reducing harmful effects on the environment and workers. The Index is designed to measure progress and focus on where more efforts are needed across the industry to create real change.”
Sarah Kent, Senior Correspondent at The Business of Fashion, said: “While the fashion industry is still reeling from the impact of the coronavirus pandemic and its effects on businesses around the world, the impending climate crisis cannot be ignored. With just a decade to avoid catastrophic environmental damage there has never been a greater need for business models to change. The Index highlights where companies have intent but need to demonstrate how they are meeting their goals to reduce harmful effects on the planet."
Download The BoF Sustainability Index here.
ENDS
NOTES TO EDITORS
Citations
Any citations from The BoF Sustainability Index should reference ‘The Business of Fashion Sustainability Index’.
For press enquiries, please contact:
Max Tobias, Camron PR for The Business of Fashion
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