Advertisement
Business of climate change
BusinessCompanies

COP26: Fashion brands face pressure to walk the talk on sustainability, new report says

  • Consumers and regulators are pushing apparel makers around the world to reduce carbon emissions, says KPMG report
  • Businesses say they plan to increase transparency along their supply chains in the next few years

Reading Time:3 minutes
Why you can trust SCMP
A garment factory in Vietnam’s Hung Yen province. While the fashion and footwear sector has been behind the curve when it comes to sustainability, consumers are becoming more discerning about what companies are doing to meet environmental goals. Photo: Reuters
Martin Choi

The adoption of sustainable practices remains a work in progress for the apparel industry, but fashion brands large and small are facing mounting pressure from shoppers and governments to do more than just talk the talk, according to a new report published on Thursday by consulting firm KPMG China and digital business-to-business platform Serai.

Advertisement

To ensure sustainable practices along their supply chains, businesses need to fully understand what is happening at every point in the process, according to the report, but less than 20 per cent of companies that responded to a survey said they currently had full visibility across their supply chains, and only 15 per cent said their supply chains were fully traceable.

While the fashion and footwear sector has been behind the curve when it comes to sustainability, shoppers are becoming more discerning about what companies are doing to meet environmental goals, Anson Bailey, head of retail and consumer at KPMG China, said in an interview.

“Consumers are now looking at [whether] companies are walking the talk, or if it is marketing speak. There’s no escape. Consumers are now watching you and are now calling you out,” said Bailey.

Against the backdrop of the COP26 climate conference in Glasgow, where the US and China just pledged to step up collaboration on climate action, companies also “now realise that they have to ensure net zero [carbon emissions] a lot sooner”, said Bailey.
Advertisement
At COP26, the UN Fashion Charter, an industry-wide initiative to collectively address climate change, updated its commitments on Monday, which called for companies to set science-based targets or cut their emissions by half by 2030, and achieve net zero emissions no later than 2050. This is more aggressive than the previous target of reducing greenhouse gas emissions by 30 per cent by 2030, according to a statement by the United Nations Framework Convention on Climate Change (UNFCCC).

The industry is “a long way” from managing scope 3 emissions, which refer to all indirect emissions generated by partners along the supply chain of an organisation, said Vivek Ramachandran, chief executive of Serai. “If you don’t have visibility into who is in your supply chain, and you can’t trace the materials going into it, then managing their carbon emissions, incentivising them with either cheaper financing, better contracts, bigger orders, all of that becomes impossible.”

Advertisement