Fashion Industry at Risk of Missing Green Goals, Fashion Business Report Says | Investment News
PARIS (Reuters) – Despite gradual improvement from some industry leaders, the fashion industry’s 30 largest listed companies are at risk of not meeting the social and environmental targets of the Paris climate accord and the United Nations Sustainable Development Goals, a Business of Fashion report revealed on Tuesday.
“You have a few frontrunners who are making small steps, but fundamentally the bigger picture is that the industry is hugely underperforming,” Sarah Kent, chief sustainability correspondent at The Business of Fashion, told Reuters.
Fashion brands are facing increasing pressure from consumers and governments to show they are doing better on the environmental front, with increased scrutiny from younger generations, in particular.
In its second annual report, the Business of Fashion Sustainable Index 2022, the online publication analyzed publicly available information about companies in three categories: luxury, sportswear and mainstream fashion.
Puma led the report with the highest score, scoring 49 points out of 100, followed by last year’s leader Kering, which continued to lead the ranking of luxury players. Levi Strauss, H&M Group and Burberry – a new addition to the survey this year – were next in line.
The lowest-rated companies were all newcomers to the list, with sportswear and consumer fashion companies at the bottom of the list.
“There are signs of progress, but it’s largely incremental – we’re not seeing the big transformative leaps that we really need to see over the next 8 years to move from where we are today. to an industry that operates at a level that is not going to blow away the ambitions of the Paris climate accord,” or other key industry goals, Kent said.
The risk is that companies will lose cultural relevance and destroy long-term value, as regulators and consumers become increasingly critical of inflated claims, the report said.
Across six topics, which included workers’ rights and materials, companies overall made the most progress in reducing emissions, while the least progress was made in reducing waste.
The industry needs to develop alternative business models, the report suggests.
“It’s a really thorny challenge for the top executives of any fashion company – how to find a way to satisfy your shareholders and demonstrate that you can continue to drive financial growth without driving production growth, without continue to do more and therefore extract more and therefore create more waste? said Kent.
The expanded scope of this year’s report, which doubled the number of companies from last year’s 15, lowered the overall scores.
“More companies meant worse results, almost in every area,” Kent said.
(Reporting by Mimosa Spencer; Editing by Diane Craft)
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