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Supply chain transparency could help the clothing industry significantly reduce its GHG emissions

Supply chain transparency could help the clothing industry significantly reduce its GHG emissions

Trade clothing industry

As all eyes turn to Glasgow where world leaders have gathered at COP26 for crucial negotiations to cut greenhouse gas (GHG) emissions and limit global warming, UNECE experts highlight how improved transparency and traceability could be part of the solution. The private sector has a vital role to play in reducing GHG emissions to ensure that the world limits global temperature rise to 1.5 degrees Celsius, in line with the Paris Agreement. However, most companies have only part of the picture when it comes to understanding the GHG emissions produced by the complex global supply chains in which they participate. Data from traceability and transparency could change this situation.

According to McKinsey, the apparel and footwear industry alone represents 2.1 billion tons (4 %) of global GHG emissions, equivalent to the emissions of France, Germany and the UK combined. To keep on a 1.5 degrees path, the industry will need to cut in half its emissions by 2030 and realise abatement opportunities, through decarbonisation initiatives and process improvements. This needs to happen particularly in the upstream part of the supply chain, where more than half of the sector’s emissions lie (Quantis, EEA). In fact, in the apparel sector, fiber production, yarn preparation, fabric dying and finishing account for 15%, 28% and 36% respectively, while in the footwear sector raw material extraction, processing and manufacturing account for 20%, 14% and 43% respectively.

The primary source of GHG emissions' in the industry is the energy used for production and transportation, which is generated from fossil sources, as well as the GHGs released when fossil-based synthetic fabrics are disposed of or incinerated. For leather apparel, cattle raising is also a significant source of GHGs (methane).

This situation calls for due diligence, especially on the part of those companies who are brands and retailers, to ensure that the participants in their product supply chains are minimizing their GHG footprint.  To do this, companies need to conduct risk-based analyses and identify and trace the ‘emissions hotspots’, from field to shopfloor and beyond. And when it comes to take action, the key changes that will create impact are the switch from fossil-based fuels to energy from renewable sources, the adoption of energy-saving processes, the optimisation of logistics, the more energy-efficient maintenance of garments by households, and the substitution of fossil-based synthetics with bio-based synthetics and recycled ones. For example, it is estimated that substituting polyester with its recyclable counterpart, rPET, would reduce GHG emissions by up to 40 % (TextileExchange). 

Among the available tools for monitoring and reporting, as detailed in the UNECE Business Process Analysis and Requirements Specifications for Sustainable Textile and Leather Value Chains (2021) are: ISO standards (14025, 14064 and 14067); Life Cycle Analysis (LCA) approaches, Environment Product Declarations (EPDs), and Product or Organization Environmental Footprint (PEF or OEF) reports.

Blockchain is a new and important technology which allows businesses to exchange and verify supporting data and assessments/certificates proving compliance with relevant standards, criteria and science-based KPIs.  It provides the wide range of industry actors with a system to support the reliability of sustainability claims for the clothing we buy.

And here, UNECE is working under The Sustainability Pledge initiative with big-name brands, SMEs, farmers, and key service providers in the clothing sector to test the technology’s potential for tracking and due diligence, including on climate impact. As part of the ongoing UNECE blockchain pilot, claims on use of recycled and organic cotton - reported to emit up to 50% less GHGs as compared to conventional one (Textile Exchange) - for clothing like shirts and jeans on sale in shops, have been tested and verified.

On the policy and regulatory side, emissions traceability and transparency along supply chains need support at different levels: the normative level with policy coherence and the right system of incentives; the standards level with the adoption of clear criteria and science-based KPIs; and the technology level with support to innovation and advanced technologies. Cross-cutting dimensions that also need to be in place are capacity building and technology transfer, particularly for SMEs and farmers, consumer’s education, and multi-stakeholder collaboration - as outlined in the UNECE Recommendation N.46 approved at the 27th Session of the UN/CEFACT Plenary (2021).

As the garment and footwear industry is mainly made of small actors, a flexible approach for sustainability and transparency frameworks to access financing, technology transfer and affordable solutions is a key to reaching the scale needed to achieve the ambitious goal of zero-net-emissions in this industry.