Only 6% of large fashion brands are investing in research and development for circularity with the majority quietly rolling back their commitments and delaying their ESG target deadlines.

The fashion industry is far behind where it needs to be to protect the environment and our future, according to Good on You’s co-founder Sandra Capponi.

The Fashion Planet Benchmark Report, which is based on data analysis conducted by Good on You’s sustainable fashion and beauty ratings team, suggests there are “alarming gaps” between the fashion industry’s environmental commitments and its actions.

Capponi adds: “Without stronger action and systemic changes, the industry risks losing the trust of consumers, investors, and regulators — all while undermining the resilience of its own supply chains. Fashion simply can’t continue down this path.”

The report highlights that over the past year the industry has struggled to keep up with supply chain disruptions, rising costs, geopolitical tensions, and looming regulations. This has resulted in so-called “greenhushing” where fashion brands have rolled back on ESG commitments and delayed target deadlines.

The report presents data from over 5,400 large and small fashion brands and exposes the shortfalls in emissions tracking, supply chain transparency, and circular design initiatives.

The report’s key findings

• Large fashion brands scored less than a third (30%) on average for environmental impact measures, while small brands performed better at 46%
• Most (88%) of brands with emissions targets don’t disclose any progress toward meeting them
• ·Despite extensive talk about circularity, only 3% of large brands offer rental schemes and just 13% have resale programmes
• Only 6% of large brands are investing in research and development for circular innovations
• Top performing brands show that doing better is possible — the highest score among the sample of large brands was 86% whereas several small brands scored 100%.

The report identifies three key areas where the industry is falling behind:

• Overall planet impacts
• Supply chain accountability
• Circular economy initiatives.

How fashion is falling behind on overall planet impacts

The report’s authors explain the production of materials and clothing has a wide variety of impacts on the environment. Fashion is failing to make a meaningful impact on water, chemical use, waste, biodiversity, soil health, air pollution or greenhouse gas emissions. 

“Fashion companies generally want quantifiable sustainability metrics that offer a clear return-on-investment for shareholders,” says Ruth MacGilp, fashion campaign manager at Action Speaks Louder. “This can mean scrambling for ways to present year-on-year emissions reductions—often through very misleading target setting, carbon accounting, and reporting tactics—instead of making meaningful long-term investments in collaboration with the suppliers actually tasked with implementing change.”

It notes that even brands that have set emissions goals (which is 44% of large brands in this report) aren’t having much impact. The vast majority (88%) of brands that do have targets don’t disclose whether they’re on track to meet them.

Narrowing this down even further, the report explains that only 17% of those targets are science-based and aligned with the Paris Agreement.

All of this shows the industry isn’t serious about emissions reductions and is even less concerned with the nature-based impacts of their operations. 

Fashion campaign manager at Action Speaks Louder Ruth MacGilp says: “Fashion companies generally want quantifiable sustainability metrics that offer a clear return-on-investment for shareholders.

“This can mean scrambling for ways to present year-on-year emissions reductions —often through very misleading target setting, carbon accounting, and reporting tactics — instead of making meaningful long-term investments in collaboration with the suppliers actually tasked with implementing change.”

How fashion is falling behind on supply chain accountability

Supply chains are complex and deliberately opaque. To take a raw material and produce a finished product, one piece of clothing can travel across the world and through the hands of dozens of actors. From farmers to raw material processors, dyers, traders, manufacturers and distribution centres. This makes it a huge challenge for brands to trace back exactly where their clothes have come from. 

The report notes that because brands don’t own or know all the suppliers in their value chains, environmental impact reduction efforts often start as close to home as possible with scope 1 or scope 2 emissions, which are from the organisation’s own operations or the generation of purchased electricity, steam, heat, or cooling, respectively.

But Good On You’s data, suggests only 7% know the emissions from scope 3, which includes raw materials and production. However, this is where most of a fashion brand’s emissions take place. 

By only measuring and addressing the tip of the iceberg while ignoring the mass underneath, brands aren’t getting the full picture of their footprint on the planet. It also puts huge pressure and responsibility for decarbonisation on the suppliers who often don’t have the financial capacity to implement this in their facilities. Brands must take more responsibility to collaborate and support their manufacturers and suppliers through this process.

How fashion is falling behind on circularity

The data shows that circularity is still a long way from a reality for the fashion industry despite growing consumer familiarity with fashion rental, secondhand clothing, repairing and altering, and even in-store take back schemes.

The report claims that at best 65% of large brands now use recycled polyester, and at worst, fewer than 40% of all brands are adopting any circularity initiatives with rental options only being taken up by 3% of brands. 

Only 6% of large brands report that they’re investing in research and development for circularity, which will not come close to reducing the funding gap of more than $1tn dollars that has to be filled to meet fashion’s 2030 targets. 

How can the fashion industry make sustainability a priority?

The report highlights that data can lead to increased accountability and action. It provides clear pathways for improvement, emphasising that major players must step up to demonstrate true leadership in fashion sustainability.

MacGilp says: “A more holistic approach starts with integrating siloed sustainability teams and standalone environmental goals in the wider business strategy, with incentives for executives to prioritise investment in solutions proven to work in the biggest emissions hotspots and that have social and environmental benefits.”

Capponi adds: “The real responsibility lies with the industry’s biggest players.

“We need the major players to step up and demonstrate what true leadership in fashion looks like. Surface-level emissions reporting and target setting is not enough, and pushing accountability onto suppliers is not the solution either.”

The UKFT has identified seven key priority areas for textile and apparel manufacturers to achieve circularity.

By Just Style