Top Brands Fare Dismally in Latest Climate Ratings; Only H&M and Puma above Average; Shein Scores 2.5/100

THE FINDINGS: Brands are not yet on track to decarbonise.

• H&M Group was the only company to have set a target to reduce Scope 3 GHG emissions by more than the required 55% by 2030 at 56%.”
• Energy transparency at a supply chain level is limited. Only Puma and Nike shared detailed information about their supply chains’ energy and electricity use in Tiers 1 and 2, which is essential for tracking their progress in decarbonising.
• Among manufacturers included in the supply chain map, 38% (25 companies) shared their energy use data, and just five reported their total coal consumption.
• Levi Strauss & Co, Puma and H&M Group are the only brands currently on track to reduce manufacturing emissions by at least 55% by 2030 compared with 2018 levels, as emissions are still not falling fast enough to be aligned with the 1.5°C pathway.
• In the last year of available data, Shein, VF Corp, Inditex (Zara) and Lululemon all reported dangerously elevated double-digit percentage increases, while Gap Inc and Fast Retailing’s negative impact surged.
• Shein’s absolute emissions increased by more than 3 million tonnes from 6.04 to 9.17 million tonnes of CO2e in just one year to 2022, more than the annual emissions of the nation of Paraguay. The e-retailer’s staggering growth alone threatens to undermine decarbonisation progress made by more traditional brands.
• Transparent reporting on supply chain renewable electricity sourcing remains limited. From the 20 manufacturing companies who report on any kind of renewable electricity sourcing, 13 (65%) reported purchasing RECs. RECs have been shown to have a limited impact on real decarbonisation.
• Adidas, H&M Group, Levi Strauss & Co, Nike, and Puma are the only brands to report providing any degree of financing for manufacturers to complete renewable electricity, coal boiler replacement or energy efficiency projects, but the scale and availability was limited and too low.
• H&M Group was the only company to offer financing that was not debt-based, and to have KPIs tied to emissions reductions.
• None of the companies assessed reported transparently on the terms, value invested or availability to suppliers.
• None of the companies showed evidence of long term contracting, absorbing price surges related to decarbonisation, or the development of fair purchasing policies related to sustainability needed for a just transition.

THE RECOMMENDATIONS:  The report suggests:

• Publish a roadmap with a transparent, time-bound and specific energy transition plan for their entire supply chains, and report annually on progress and actions.
• Financial support, including supportive procurement policies to advance an effective transition, is essential for a fossil fuel phase-out that is both rapid and fair.
• Fashion brands must prioritise, promote and advocate for an energy transition that will result in an effective fossil fuel phase-out, rather than mask ongoing emissions growth with carbon accounting.
• Collaborate with others, both inside and outside the supply chain, to avoid false solutions and create transition plans that are effective and locally appropriate.

WHAT THEY SAID:

The good news is that progress is happening. The bad news is that that progress is being undermined by dangerous pollution from ultra-fast fashion, and the growing threat of greenwashing. Simply put, most brands are not yet on track to decarbonise and many are heading in the wrong direction, and no matter the price printed on the tag, people and the planet are left to pay the true costs. These big players in the fashion industry must show leadership by rapidly phasing out fossil fuels and investing in tangible, renewable energy solutions.

—Rachel Kitchin (Lead Author)
Senior Corporate Climate Campaigner 
Stand.earth