LONDON (Reuters Breakingviews) - Rag traders are talking a good game on climate change. Last week, H&M promoted its former head of sustainability to the top job. Helena Helmersson wants the $31 billion Swedish fashion giant to only use 100% recycled material and “sustainable” cotton – meaning fibre that is either organic, recycled or grown in a way that minimises pesticides and water. Such solutions seem ambitious – but could actually exacerbate other types of pollution.
Flogging cheap jeans and T-shirts is a dirty business. The so-called fast fashion industry is spewing out 1.2 billion tonnes of carbon into the earth’s atmosphere each year – more than international flights and maritime shipping combined, according to the International Energy Agency. A 29.99 pound dress in a high street chain may be made of cotton, an innocuous-sounding natural material, but uses fertilisers which seep into groundwater and create dead zones in lakes and rivers where marine life cannot survive. A 5 pound pair of leggings uses polyester, a fabric which is partly to blame for the 98 million tonnes of non-renewable resources like oil the sector uses every year. Clothes production including dyes and cotton farming uses 93 billion cubic metres of water annually, according to the Circular Fibres Initiative. This equates to around 37 million Olympic-size swimming pools.
H&M’s pledges should help, but the sector’s real problem is waste. More than half of fast fashion produced is disposed of within a year, according to McKinsey & Company. Despite chains like John Lewis and Inditex-owned Zara launching recycling programmes for unwanted clothes, some 73% of garments still end up burned in incinerators, or in landfill. The latter produces methane, a greenhouse gas that therefore contributes to global warming.
Retailers reckon all this pollution will disappear once the so-called “circular economy” gets up and running. The market, they say, will turn into a productive utopia where discarded clothes are efficiently recycled and sold back to customers. As such, rather than scaling back, fashion chains are expanding. Mega-chains like Zara have been ramping up the number of collections and new styles they release each year. This has led to a near doubling of clothes production in the past 15 years.
While Western consumers have begun to criticise brands for their carbon emissions, the growing middle class in China and India is driving up demand for disposable fashion. The Circular Fibres Initiative reckons that if the fashion industry’s circular economy fails to get going soon enough, fashion production will require 300 million tonnes of oil by 2050. That’s more than three times today’s requirements.
Partly because they can point to a fuzzy circular economy future, few retailers are doing much to help. Spanish clothing giant Inditex, the UK’s Topshop and bargain clothing store Primark – owned by Associated British Foods – have failed to commit to so-called science-based targets, where objectives like meaningful emissions reduction are signed off following credible tyre-kicking. H&M has done so, but its sustainably sourced materials and 2030 recycling pledge raise further questions.
H&M is making steady progress on its recycling programme, but the wider industry doesn’t have the technology or the infrastructure to create new garments from discarded material. In Sweden, where clothes textiles are collected for recycling, non-reusable textiles are routinely incinerated, according to the Swedish fashion research programme Mistra Future Fashion. And there is not currently a solution to deal with the methane produced by natural cotton and wool products placed in landfill.
That leaves fast fashion in a similar place to big oil – the only certain way to help the planet is to scale back production. If Inditex were to cut down the 26 billion euros’ worth of clothes and homewares it produces each year, there would be less need for fossil fuels, water and landfills. As with oil, this cuts across an unsurprising goal to grow its profit and dividend, as the company has the last five years.
Encouraging customers to hold on to clothing for longer would also curb waste. But 300 million people are employed in the $1.3 trillion global fashion industry. Bangladesh, the world’s second-largest garment producer after China, relies on apparel for more than 80% of its exports, according to the World Bank.
The easiest way out would be for ranks of increasingly sustainability-obsessed investors to demand change. Yet nearly three-quarters of H&M’s voting stock is controlled by the Stefan Persson family, and Amancio Ortega holds 59% of Inditex. Unless they commit to more robust action, fashion’s Frankenstein will continue to rampage.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.