Fashion brands and suppliers struggle over climate transition at COP27

The textile sector needs to halve its greenhouse gas emissions by 2030

A business opportunity for multinationals’ climate advisors and a headache for manufacturers in developing countries.

“We produce for other brands, in Europe, elsewhere (…). They are pressuring us to achieve certification and also to lower our prices,” said Egyptian businessman Ali Nouira in a debate during the annual UN Climate Conference (COP27) in Sharm el Sheikh (Egypt).

“That way, they can continue to make the benefits they’re achieving,” he added.

The fashion world signed four years ago, at COP24 in Katowice (Poland), a commitment to reduce its greenhouse gas emissions to zero by 2050.

Of the 2.1 gigatons of CO2 equivalent it emits per year, the companies’ plan would be to reach 1.1 gigatons in just over seven years. This challenge, coupled with the Covid-19 pandemic, has brought the sector to a boil.

An act of faith

“Have we succeeded? Of course not. Are we in it? I would say… perhaps,” acknowledged Stefan Seidel, head of Sustainability at the Puma brand, in another debate on fashion and climate change.

From the 30 brands that signed the Katowice Charter, it has gone to almost 110, according to UN figures.

But the main problem is that 90% of emissions come from its suppliers.

Changing all production chains and introducing climate standards in raw material suppliers and garment workshops is a gigantic task.

“We have more than 800 suppliers,” Leyla Ertur, head of sustainability at the H&M brand, recalled in another debate.

Nor do luxury brands, reputed for the care with which they choose their suppliers of raw materials, escape the revolution.

“Even we are not big enough to change all supply chains, collaboration is key,” said Marie-Claire Daveu, head of sustainability at the large Kering group, which groups brands such as Gucci or Yves Saint-Laurent.

Ali Nouira explains some of the difficulties of suppliers.

“When we manufacture, we must have all the necessary certifications and all of that is extremely difficult and expensive. And when I say difficult, I mean that some certification agencies don’t even exist in our regions.”

Delman Lee, vice president of Tal Apparel, says his Hong Kong-based company has been in the decarbonization process for a decade.

But with subsidiaries in Vietnam or Ethiopia, different regulations are challenging.

Getting down the path of “net zero carbon” is “an act of faith,” he told the audience at COP27.

“You commit to something that you don’t know how you’re going to be able to achieve,” he confessed.

Free costs

The change in business culture has already permeated developed countries, acknowledges Nicholas Mazzei, head of Environmental Sustainability at Zalando, one of the biggest online brands.

“Some big banks offer you a lower interest rate if you commit to a net zero target,” he enthuses.

“If you want to do the transformation, maybe you end up paying nothing, because the loans are so low that the costs are basically free,” he says.

But suppliers are not so lucky.

“What we need is much more renewable energy than the big firms. Even if we put solar panels on all our factories, that would only account for 17% of the entire group’s consumption,” said Catherine Chiu, vice president of sustainability at Chinese maquiladora Crystal Group.

Stefan Seidel acknowledges the difficulties: “We need our suppliers to be able to access renewable energy outside their factories.”

“The private sector is doing its part. But regulators move at their own pace,” adds Delman Lee.

Source: Diario Libre