July 22, 2024

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Fashion’s Confounding Climate Math, Explained

5 min read

Imagine you are the chief supply chain officer at a multi-billion-dollar fashion brand.

Your company has set ambitious targets to reduce its planet-warming emissions. That’s made your job more complicated. The supply chain, which you oversee, is where most of your company’s climate impact takes place. It’s also where you have the least control because you don’t own the mills that make your fabrics, the facilities that dye your cloth or the factories where your products are sewn.

It’s a prodigious problem, so you’ll tackle it bit by bit. This season, one focus is on reducing the carbon emissions associated with fossil fuel-powered boilers used in the jeans dying process. A supplier presents you with two options (both with the same capital and operating costs), only one of which they can fund:

  • Option 1: In one facility, the supplier can swap out a very old natural gas-powered boiler for a newer version. The old boiler can process one pair of jeans per cubic meter (m³) of gas and the new, more efficient one can process two pairs per m³.
  • Option 2: In another facility that was already using the next generation boiler, the supplier offers to install an even more efficient version that would increase production from two pairs of jeans per m³ to five units per m³.

You will need to process 1,000 pairs of jeans in each facility to meet your production quota and the choice seems like a no brainer. With Option 2 you get three more units per cubic meter of gas burned; with Option 1 you only get one.

But here is where fashion’s climate math stops making intuitive sense; though Option 2 seems like it will deliver more impact, Option 1 will actually deliver larger emissions reductions.

Let me break it down:

Fashion's climate math is counterintuitive.
(The Business of Fashion)

The first upgrade to your supplier’s boiler — the one that gives you just one extra unit per m³ — results in a healthy 500m³ reduction in your suppliers’ natural gas consumption for every 1,000 units produced. The second upgrade only saves 300m³.

This is fashion’s decarbonisation calculus; the more efficient production gets, the harder it is to squeeze out energy and emissions savings. In other words, the relationship between effort and impact is a nonlinear one of diminishing returns.

Fashion's Decarbonisation Calculus
(The Business of Fashion)

Decoding Fashion’s Climate Math

The same math manifests in almost all the industry’s decarbonisation efforts.

When brands and manufacturers first get started, emissions reductions can be quite swift and cost efficient. This is the domain of low-hanging fruit. For instance, factories can switch to more efficient LED lighting, thereby reducing their energy consumption, and often get returns on the investment in less than one year.

But more ambitious projects, like upgrading boilers to make them more efficient or switching them to run on less carbon-intensive fuels, generally cost more and deliver savings more slowly, if at all. Getting factories fully off carbon-intensive fossil fuels requires massive investment and government action to shift national grids to renewable energy.

Two additional factors further complicate fashion’s decarbonisation math.

First, the impact of climate change — the end result of the industry’s current polluting practices — is hitting harder and faster than most expected. Temperatures in many of fashion’s largest manufacturing hubs in Asia pushed 40 degrees Celsius in April and May. In parts of India and Pakistan they breached 50 degrees. Such extreme heat is becoming more common, more severe and lasting longer. The industry will have to adapt to this grim climate reality, which has serious implications for worker health, productivity and general factory operations. That means air conditioning factories, according to one Asia-based sustainability executive. But effective cooling will come with a hefty energy bill, adding to emissions at fossil fuel-dependent factories just when the industry is trying to decarbonise.

Finally, even where companies are successfully curbing emissions, that progress is often offset by continued growth. This is why, one now ex-sustainability executive from a multi-billion-dollar brand told me, no fashion brand with robust science-based climate targets is in a position to deliver on them.

The Consumer Conundrum

A similar non-linear calculus comes into play when looking at the other side of this equation: consumer demand.

For many years, the industry has advertised its pursuit of sustainability goals based on the assumption that this would appeal to shoppers. Indeed, surveys often ask consumers to rate their environmental concern from one to five, and over time, the results of such exercises indicate worry about the climate is increasing. But that hasn’t directly translated into changes in purchase behaviour.

If all this makes your head hurt, you’re not alone. The human brain tends to think in straight lines, so these complex, non-linear relationships are literally mind boggling. (If you want to understand this better read this excellent analysis from The Harvard Business Review, which has helped shape my thinking on the topic). This also helps to explain why delivery of environmental sustainability is such a daunting challenge.

Yet if the consumer intention versus action gap lessens pressure on brands and decarbonisation turns out to be harder and more expensive than anticipated, the prognosis for voluntary progress is dim. This math is immutable, even if it is counterintuitive.

This is precisely why sane policy is needed to mandate and incentivise minimum social and environmental standards — measures that could tip fashion’s climate calculus more in favour of action.

Climate Conscious Consumer Chart
(The Business of Fashion)

That’s not simply down to the fact survey participants are rarely totally honest in their responses. It’s also because the relationship between consumer attitudes and consumer behaviour maps on a curve, not a straight line — just like efforts to reduce emissions.

In fact, academic research shows little or no behavioural difference between consumers who, on a five-point scale, give their environmental concern the lowest rating, one, and consumers who rate it a four. But the difference between fours and fives is huge.

In other words, only those who care the most really act on their values.

Kenneth P. Pucker is a professor of practice at the Tufts Fletcher School. He worked at Timberland for 15 years and served as chief operating officer from 2000 to 2007.

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