the challenge

what are we trying to address?

Analysis from McKinsey and Global Fashion Agenda shows that the global fashion industry produced around 2.1 billion tonnes of GHG emissions in 2018, equalling 4% of the global total. This is equivalent to the combined annual GHG emissions of France, Germany and the United Kingdom. 38% of these emissions come from raw material production, of which cotton makes up 27% by volume. If no further action is taken over the next decade beyond measures already in place, the industry’s GHG emissions will likely rise to around 2.7 billion tonnes a year by 2030, reflecting an annual volume growth rate of 2.7%

Farmer Incentives

One of the most challenging areas of action in reducing textile raw material and cotton impacts is the shift from conventional agriculture fibre production to lower climate impact and regenerative practices. Demand far outstrips supply for more sustainable cotton programmes - with many brands setting targets for 100% more sustainable sources knowing that there is not yet sufficient volume of those sources available on the market. Demand signals are not making their way down the supply chain to farmers - who do not receive sufficient incentives or support to allow them to shift their practices. Many farmers do not have the funds to apply improved practices, or are concerned about reduced yields due to changes. Therefore, if mechanisms are created to fund farmers at the start of their journey, it can support their transition to improved practices and ultimately decarbonise production and increase the volumes of low climate impact cotton being produced.

Funder Incentives

In order to fund a more rapid transition to decarbonised production and farmer incentives, it is important to not only rely on regulation and government subsidies but also to leverage the support of the private sector - in this case the fashion brands using the majority of cotton. However, there are some major barriers to leveraging brand support for action. The first is that existing cotton programmes struggle with accurate GHG emission measurement, which makes it challenging to demonstrate the credibility and effectiveness of climate interventions with farmers. The second is that even where data does exist, there are challenges making claims. The programmes with Life Cycle Assessment data that can be used to make claims are not yet widely available on the market, and also need to wait till farmers reach certification to make claims which can take several years. The programmes designed to support claims (e.g. conventional offset programmes), are widely criticised by NGOs and are not permitted under the leading company target setting and reporting mechanisms such as the Science Based Targets Initiative and CDP. There is also significant new guidance emerging from SBTi and the Greenhouse Gas Protocol on how to credibly claim GHG removals (soil carbon) from agriculture, which is challenging for individual brands or certification schemes to navigate alone.