Major fashion companies showed mixed progress in climate accountability, according to a comprehensive 2025 analysis, with researchers finding that improved emission targets were often undermined by reliance on false solutions and failure to address fast fashion business models fundamentally.
- The Corporate Climate Responsibility Monitor, published by the NewClimate Institute, assessed five major fashion companies—Adidas, H&M Group, Inditex, Lululemon, and Shein—finding credibility gaps between ambitious targets and implementation plans across the sector.
- Researchers found that companies were replacing coal with fossil gas and biomass rather than pursuing genuine electrification, while maintaining high-volume production models that contradicted circularity claims.
- The analysis revealed significant transparency issues in supply chain energy consumption reporting, with only H&M Group providing comprehensive disclosure of energy balances across supplier tiers.
GHG EMISSION REDUCTION TARGETS: Companies demonstrated significant improvements in greenhouse gas reduction commitments, though overall sectoral credibility remained mixed. Researchers found substantial variations in target ambition and implementation strategies across the five assessed companies.
- Adidas and Inditex notably strengthened their emission commitments in 2024, with Adidas targeting 70% Scope 1&2 reductions and 42% Scope 3 cuts by 2030 below 2022 levels.
- H&M Group had established deep decarbonisation targets in 2022, aiming for 56% reduction across all scopes by 2030 from 2019 levels and 90% reduction by 2040.
- Lululemon's 2030 target was expressed as profit-based emissions intensity, allowing absolute emissions increases despite claimed 31% intensity reductions while actual Scope 3 emissions rose 22% since 2021.
- Shein's 25% reduction commitment by 2030 from 2023 baseline was assessed as severely misaligned with sectoral benchmarks, potentially allowing emissions to more than double compared to 2021.
- The Science Based Targets initiative validated all five companies' targets as 1.5°C-compatible despite substantial differences in ambition, potentially undermining leadership companies with more robust absolute reduction targets.
SUPPLY CHAIN ELECTRIFICATION: Energy consumption in garment manufacturing accounted for approximately 85% of fashion companies' total emissions footprint, primarily driven by fossil fuel use for electricity and heat generation processes.
- Companies increasingly set renewable electricity targets for supply chains, with H&M Group targeting 100% renewable electricity by 2030 across all supplier tiers and Lululemon aiming for 50% by 2030.
- Renewable electricity targets were rarely integrated into broader electrification plans for production processes, with companies focusing narrowly on coal replacement rather than comprehensive fuel combustion elimination.
- Companies turned to fossil gas and biomass as interim energy sources, which researchers identified as false solutions that risked locking in carbon-intensive technologies without substantial emission reductions.
- Transparent disclosure of supply chain energy balances was generally lacking, with H&M Group standing out as a positive exception for publishing detailed disaggregated data covering manufacturing processes and geographic regions.
- Viable electrification technologies were identified including waterless dyeing systems, infrared and radiofrequency dryers, ultrasonic washing, high-efficiency electric boilers, and industrial heat pump installations for thermal processes.
BEYOND FAST FASHION MODELS: Efforts to transition away from fast fashion paradigms were assessed as lacking and fragmented, with companies falling short of clear commitments to reduce overproduction and embrace genuine circularity.
- All assessed companies reported targets for increasing "preferred fibres" usage, though researchers noted that preferred fibres might not always reduce emissions and companies should prioritise circularity and material efficiency.
- Companies showed progress towards textile-to-textile recycling, but many continued using PET bottles for recycled polyester, which researchers identified as inefficient and unsustainable diversion from other recycling streams.
- The fast fashion business model's rapid production cycles, low price points, and vast volumes were identified as fundamentally misaligned with low-carbon economy transition requirements.
- Current circularity efforts including resale platforms and take-back programmes remained marginal within broader business strategies, with H&M Group's resale platforms accounting for only 0.6% of total revenue in 2023.
- Regulatory interventions were identified as crucial for systemic shift to sustainable fashion business models, including Extended Producer Responsibility schemes, mandatory production volume reporting, and prohibition of unsold inventory destruction.
COMPANY-SPECIFIC PERFORMANCE: Individual company assessments revealed varying approaches to climate accountability, with researchers identifying distinct strengths and weaknesses across emission targets, transition strategies, and circularity commitments.
- Adidas improved emission targets aligned with 1.5°C benchmarks but faced criticism for replacing coal boilers with fossil gas and biomass while maintaining surface-level circularity strategies without overproduction reduction measures.
- H&M Group demonstrated high-integrity targets with transparent supply chain energy disclosure but lacked clear electrification strategies while maintaining 10% annual sales growth goals that contradicted circularity commitments.
- Inditex established new emission targets aligned with climate benchmarks but lacked electrification measures while listing bioenergy as a solution that could potentially undermine renewable electricity commitments.
- Lululemon's profit-based intensity targets obscured absolute emission increases despite claimed volume reductions, with emissions more than doubling since 2019 while implementing limited circularity measures without explicit overproduction commitments.
- Shein's emission targets were assessed as completely misaligned with climate requirements, lacking transparency in reduction measures while maintaining ultra-fast fashion business models fundamentally incompatible with necessary sustainability transitions.
