In these uncertain times, as supply chains are challenged by the twin risks of decreasing consumer demand and safety and the upstream challenges of production and transport, capital markets’ conversations are pivoting towards efficient use of natural resources as one of the ways forward.
Take the textiles industry: even before taking into consideration the industry’s outsized pollution costs, $500 billion is lost each year because of the lack of recycling and through clothing underutilisation – equal to losing 0.6% of 2018 global GDP. Average clothing use decreased by 36% over the past 15 years.
The textiles industry’s greenhouse gas (GhG) emissions, at 1.2 billion tonnes carbon dioxide equivalent annually, are greater than the combined emissions of the airline flights[i] and maritime transport[ii] sectors, yet both the airline and maritime transport sectors are developing and implementing sector-wide emissions reductions strategies. Furthermore, the textile sector is forecast to contribute 22 million tonnes of microplastics – called microfibres – to the world’s oceans by 2050.
Oil-based polyesters are used in 60% of our textiles globally, an increase of 100% since 2000 and their production now consumes 350 million barrels of oil each year.
The textiles sector uses 43 million tonnes of chemicals every year – from fibre production to dyeing and manufacturing.[iii] These hazardous chemicals impact both those working on the shop floor producing textiles and you and me when we wear textiles.
In production and when worn and washed, research suggests that washing of synthetic textiles contributes 35% of the primary microplastics in the oceans.[iv] Scientists now estimate that up to 4,000 microfibres are released per gram of fabric per wash.[v] This is why the U.S. State of Connecticut now requires clothes that are plastic-based, such as polyester, to include labelling of the health risks if worn.[vi]
In fact, eliminating the health impacts from these negative environmental externalities would result in an $8 billion economic benefit annually, including impacts from decreases in occupational illnesses.[vii] $460 billion each year is lost by the textile industry’s throwaway culture from underutilization of clothing.[viii]
Even now the textiles industry is facing environmental headwinds from excessive negative pollution, water, land-use and emissions impacts that are decreasing the industry’s forecast growth rate and profitability margins. According to the Boston Consulting Group and the Sustainable Apparel Coalition these negative and unmanaged externalities decreased industry growth from 2018 to 2019 by an estimated $300 billion:
“Without growth in environmental and social practices through scaling up existing sustainable practices, adopting more efficient business models and implementing transformative changes, the gap between the growth of the industry and (its negative impacts) will widen further. This could have a dire effect on the long-term environmental, social and financial prosperity of the industry and planet.”[ix]
This all adds up to the industry’s profitability becoming increasingly at risk because of its impacts on natural capital. Continuing business as usual is forecast to decrease the industry’s EBIT by 3% by 2030, equal to $52 billion.[x]
On the political front, EU leaders are now making sustainability a top security risk. European Commission President Ursula von der Leyen said this week:
“(The) circular economy will make us less dependent and boost our resilience… This is not only good for our environment, but it reduces dependency by shortening and diversifying supply chains… Investing in large scale renovation, renewables, clean transport, sustainable food and nature restoration will be even more important than before. This is the lesson we need to learn from this crisis.”[xi]
Solutions are often hidden in front of our eyes.
Easy-to-implement manageable solutions exist. Institutions can apply circular economy principles.[xii] This is not hard.
- Decrease use of chemicals and release of micro-fibres into the environment.
- Increase clothing utilisation.
- Reduce and reuse.
- Increase efficient use of natural capital resources.
In fact, textile innovation is occurring more and more quickly. McKinsey states that the top ten trends in 2020 for fashion include sustainability, local production and revolution in materials and processes.[xiii] For example, textile innovation, which includes processes for supporting greater sustainability, is increasing rapidly as shown with global textile patents increasing 8x – from 95 to 838 – between 2013 and 2019 (forecast).[xiv]
Sustainable textile solutions involve the twin and opposite pillars of high-fashion and local farmers sourcing materials. So, let’s chat about Merino wool because it is the ultimate ingredient in luxury fashion and performance apparel and it can easily replace plastics resulting in reducing the release micro-fibres into the environment.[xv]
Yet a key industry constraint is “wool scouring”, which occurs when wool sheared from a sheep is cleaned. This wool, called “greasy wool” or “wool in the grease”, requires the removal of lanolin, pesticides, vegetable matter, dead skin, sweat residue and other impurities. Commercial scouring includes using detergents and alkalis with specialized industrial equipment. Normally, contaminants before scouring accounts for about 35% to 40% of total raw wool weight.
Currently, only one large wool scouring facility exists in the U.S. in South Carolina.[xvi],[xvii] By adding a new wool scouring facility in Connecticut, for example, U.S. wool production risk and capacity risks could decrease. Decreasing this production risk and capacity risk would empower the U.S. to develop “smart textiles” that would enable the U.S. textiles industry to decrease its negative environmental externalities. Also, a strengthened New England wool economy would meet all four circular economy principles focused on nature-based solutions: it would reduce costs and emissions from production and transport, decrease plastics use, improve clothing utilization rates and increase efficient use of natural resources. Furthermore, New England’s abundant rain and water-retaining clay soils keep their grasses nutritious, allowing sheep to pasture more intensively per hectare compared to other geographies.
Locating supply chain sources closer to end-users – as in this New England example, sourcing wool production near the U.S. fashion capital and centre of its garment industry – would encourage more farmers to expand and diversify existing operations, start new ventures and support innovative natural fibre textiles production to replace toxic chemicals.[xviii]
Boston Consulting Group sums up the textile and fashion sectors’ opportunities for immediate transformation when they state:
“It is indisputable that the fashion industry must accelerate its transformation to sustainable, circular practices. Success depends heavily on the development of new, disruptive solutions that will future-proof the industry’s business models.”[xix]
20 to 26 April 2020 is Fashion Revolution Week when brands and producers are encouraged to be transparent about their supply chains and their risks.[xx] 24 April 2020 is the seventh anniversary of the Rana Plaza factory collapse in Bangladesh, which killed 1134 people[xxi] and 2,500 more who were trying to escape the burning and collapsing building.[xxii] The future of fashion is local regenerative sourcing that is quality and not quantity based. Fashion’s future is a co-operative system generating sustainable value, on a planet with finite resources, that redefines scale to fit within these limits. Similarly, the future of fashion is not just a textile that forms what we wear and use each day; it is the full end-to-end value chain that delivers garments from soil back to soil.
[i] The airlines industry is developing the Carbon Offsetting Scheme for International Aviation (CORSIA). According to the International Air Transport Association, starting 1 January 2019, all carriers are required to report their carbon dioxide emissions annually with offsetting mandatory, with exceptions, for carbon dioxide emissions increases above 2020 levels.
[ii] The International Maritime Organization Marine Environment Protection Committee (MEPC) and member states have agreed on a 50% carbon dioxide reduction by 2050, with a target to eliminate carbon emissions entirely. The agreement is in the final stages of assessment and ratification.
[iii] Bluesign (2011). Environmental Health & Safety (EHS) guidelines for brands and retailers. 1 kg of cotton textile production uses 0.35 to 1.5 kg chemicals. 1 kg of fabric production uses about 0.58 kg of chemicals.
[iv] Boucher and Friot, IUCN (2017). Primary Microplastics in the Oceans: a Global Evaluation of Sources.
[v] Cocca et al., Environmental Science and Technology (26 February 2020). Microfiber Release to Water, Via Laundering, and to Air, via Everyday Use: A Comparison between Polyester Clothing with Differing Textile Parameters.
[vi] Chakrabarti and Rao, Crowell and Moring (15 October 2018). New Labeling Requirements: How States and Industry are Tackling Microfibers.
[vii] Boston Consulting Group and the Sustainable Apparel Coalition (2017). Pulse of the Fashion Industry.
[viii] Ellen MacArthur Foundation (2017). A New Textiles Economy: Redesigning Fashion’s Future. Calculation based on Circular Fibres Initiative materials flow analysis and Euromonitor International Apparel & Footwear 2016 Edition. In 2015, 46% (in mass) of collected garments were reused. If 100% of discarded clothing were collected, 22.2 million tonnes would be reused instead of 5.6 million tonnes as at present, meaning 16.6 million tonnes of new garment sales would be avoided, with a value of $460 billion.
[ix] Boston Consulting Group and the Sustainable Apparel Coalition (2019). Pulse of the Fashion Industry: 2019 Update.
[x] Boston Consulting Group and the Sustainable Apparel Coalition (2017). Pulse of the Fashion Industry.
[xi] Krukowska and Chrysoloras, Bloomberg (16 April 2020). Europe Signals Pandemic Made Green Agenda a Security Priority.
[xii] Circular Fibres Initiative and the Ellen MacArthur Foundation.
[xiii] McKinsey and Company (2020). The State of Fashion 2020.
[xiv] McKinsey and Company (2020). The State of Fashion 2020. Based on bio-textile and smart-textile filings with 2018 estimate and 2019 forecast given lag in patent filing data.
[xv] Women’s Wear Daily (22 April 2020). Farm to Closet: Innovation and partnerships elevate the original eco fibre.
[xvii] The Chargeurs Wool processing facility in Jamestown, South Carolina has by far the largest maximum fibre volume in the U.S. and is the only large industrial “wool scouring” facility in the U.S. Chargeurs process is after opening and blending of the raw wool, processing starts with a hybrid scouring line especially assembled for optimum cleaning with very gentle wool treatment to best preserve fibre length. Twelve 2.5-meter Octir cards are operated at low speeds for improved quality and to further preserve fibre length. Three passes through Schlumberger pin drafters properly prepare the wool for the Schlumberger combs that are operated below standard speeds for a better quality combing. Two more subsequent passes through Schlumberger pin drafters provide an even sliver that is packaged into one of two sizes of ‘bumps’ or traditional bobbins, whichever provides the best efficiency in the customer’s operation. In addition to a strong preventive & predictive maintenance program, processing equipment is continually audited for maintenance levels and scheduling of overhauls.
[xviii] Women’s Wear Daily (8 April 2020). TILL bioFASHIONtech Launches Wool Ecosystem to Help Sheep Farmers.
[xix] Boston Consulting Group (2020). Financing the Transformation of the Fashion Industry: Unlocking Investment to Scale Innovation. P. 36.
[xxi] Tansy, The Guardian (23 April 2015). Reliving the Rana Plaza factory collapse: a history of cities in 50 buildings, day 22.
[xxii] lam and Hossain, Yahoo News (13 May 2013). Bangladesh collapse search over; death toll 1,127.