A stock take of fashion’s progress on environmental and social sustainability in 2024 reveals a murky picture.
Impending regulations across the EU on supply chain due diligence, traceability and forced labor offer policy nudges in the right direction for brands and retailers.
Yet, the majority of global players lag behind, whether that’s on measuring and mitigating nature-related impacts, reducing absolute scope 3 greenhouse gas emissions or eliminating petroleum derived based fabrics.
According to the Business of Fashion and McKinsey’s 2025 State of Fashion, only 18% of fashion executives consider sustainability as a top-three risk for growth in 2025, a decline from 29% in 2024. This marries with the broader picture across other industries relayed in Bain & Co’s Visionary CEO Guide to Sustainability which found that sustainability had been de-prioritized to manage growth concerns, rising inflation, geopolitical uncertainty and to pursue the use of AI.
With disappointing outcomes from critical events including the UN CBD COP16, UNFCCC COP29 and the INC-5 for the Global Plastics Treaty, action by fashion’s stakeholders that could have been spurred by policy mandates agreed at multi-lateral negotiations have been limited.
They are limited despite the fact that the world is on a sharp trajectory to reach 3.1 degrees, a far cry from the global aim of 1.5 degrees as human activity continues to push the limits of planetary boundaries. The industry’s actions are also limited despite recent reports from the World Economic Forum that rising temperatures and extreme weather events continue to disrupt supply chains and productivity, putting up to a quarter of companies’ 2050 EBIDA at risk.
Inaction on climate presents a significant material risk to the fashion industry and wider textile and apparel ecosystem. I sat down with four experts to understand what fashion’s sustainability priorities should be for 2025.
Fashion’s Roadmap To Reimagine Growth
As of 2024, we still have not reached ‘peak stuff’. Apparel consumption is projected to increase by 63% to 102 million tons in the next five years and if the industry continues its current trajectory, by 2050, it would use more than a quarter of the world’s carbon budget.
This direction of travel was outlined by Textile Exchange, who reported in its latest Materials Market report that global fiber production increased by 7% from 2022 to 2023, to stand at 124 million tons. The organization communicated that this would rise to 160 million tons in 2030, should business as usual continue.
My conversation with sustainability strategist and writer Rachel Arthur, took place on Cyber Monday, another marked day in the Black Friday shopping spree calendar, which has proved to be equally as popular as previous years. Barclaycard reported a 9.5% increase in UK retail transactions this year compared to Black Friday in 2023.
Arthur shared her thoughts on fashion’s performance in 2024. “Even when pockets of positive things have been happening, consumption continues to grow as a result of the industry’s current business model. Growth from a revenue standpoint remains the number one indicator of success, despite its correlation with resource extraction.” she said.
Unpicking this interpretation of growth was the aim of the recent Textile Exchange ‘Reimagining Growth – A Landscape Analysis’, authored by Author and the team, which sets out varying pathways for businesses aligned with a regenerative economy.
“The report aims to address the table topic of growth, including important conversations about production volumes,” Arthur commented.
“Through this lens, it discusses what bold leadership looks like and the enabling environment that can support such leadership. For instance, if that’s capping virgin resource use, what does it look like in practical terms do so?” she added, whilst admitting tackling these issues can often be harder for publicly traded companies due to their accountability to shareholders.
How can we encourage transparency on production volumes? Fashion Revolution earlier this year recorded that 89% of 250 of the market’s largest players did not disclose how many clothes they produce on annual basis.
Arthur notes how the report makes the case for mandatory disclosure on volumes. “It needs to be integrated from a policy standpoint. This goes beyond volumes of unsold stock, but the volume of total items produced.” she said.
“We know that policy is slow, with a lag time of three to five years to come into force. This can’t be an excuse for not acting in the meantime.” Arthur continued.
Shifting mindsets and narratives also comes into sharp focus in the Landscape Analysis, with a review of terminology. Interestingly, a study carried out by Textile Exchange in 2024 shows that 65% of participants from the industry believe they could not use the word ‘degrowth’ internally in their organizations. Removing the stigma surrounding alternative definitions of growth and abundance is clearly a step the industry must take in 2025.
Supply Chain Focus – More Relational, Less Transactional
As the industry works to set and move towards decarbonization and clean power procurement targets, creating the infrastructure to ensure there is a just transition, protecting worker’s rights and livelihoods across the supply chains has come into focus.
From his continued research into the realities of a just transition across the textile and apparel supply chain, Dr Hakan Karaosman, associate professor of Cardiff University recounts his conversation with suppliers. “Across multiple geographies, they feel that they are being squeezed, especially by incoming regulations which has added more complexity. Suppliers shared that they are experiencing worse pressures than before, even than during the COVID pandemic.” he told me.
Supply chain investigations into the labor practices of luxury players including LVMH owned Christian Dior and Loro Piana have made headlines this year. Karaosman welcomed the investigations, “Luxury often remains untouched and protected in these situations, but they have shorter supply chains and the financial capital to be able to act more responsibly.”
I asked Karaosman what he would say to CEO’s and executive teams, who are often at the helm of deciding how integrated sustainability is within a company’s decision making.
“Wake up,” he said. “Don’t reduce sustainability to an accounting tool. Real action will bring social wellbeing, ecological consciousness and money.”
He emphasized the importance of internal communications for those at the C-Suite level with sustainability and operations teams often working closely with suppliers on the ground.
Karaosman commented that “The just transition cannot be hijacked as a term like ‘circular economy’ and ‘sustainability’. Stakeholders must consider how their business climate initiatives and actions must be fair, equitable and socially inclusive.”
He emphasized the important role the purchasing function can have in this area. “They have the ability to distribute power and financial capital with suppliers.”
But it’s not just about financial capital, Karaosman warded, “Emotional capital is important, suppliers want to feel respected and cared for. I invite brands to be less transactional and more relational in 2025.”
What Investors Want From Fashion
Investors are acutely aware of the social, climate and nature related risks that come with the ‘rapacious growth driven business model’ Karaosman described in his interview. So, what does the investor community want to see? San Lie, CEO of ASN Impact Investors, gave me insights into this during our conversation.
ASN Impact Investors made headlines in August this year as one of the first organizations to remove itself from the clothing industry divesting €70 million worth of shares from 12 companies including H&M Group, Inditex and VF Corp.
Reflecting on this decision, Lie told me “There was a landscape of multiple tings going wrong. Progress on human rights was there, albeit slow. But, we also saw the impact of COVID, squeezing workers in factories. This prompted us to ask ourselves if we felt comfortable with what was happening.” Lie pointed to the environmental footprint of mass market players, noting water pollution and increasing greenhouse gas emissions as contributors to this tension too.
As a result of this performance, ASN Impact Investors used four criteria to assess fashion companies within its portfolio, noting that if a company met one they were out. This included reviewing if companies had a strong presence in low-wage countries and if they had a high production turnover rate with multiple seasonal collections.
Whilst the investor group tightened its assessment criteria, it was keen to still include a fashion company if they had made significant steps to become truly circular in their practices. “We checked them, but they had no clear concrete, meaningful targets in place,” Lie said. ASN Impact Investors has not ruled out re-including fashion companies in the future, but they will have to meet rigorous screening criteria.
Authenticity in circularity initiatives, is indeed hard to come. For instance in-store take back schemes are lauded as solutions whilst clothes in the system end up in the Global South as highlighted by the Changing Markets Foundation.
Lie referenced the effect of the rise of ultra-fast fashion players like Temu and SHEIN on global brands and retailers, “Pressure been amplified in recent years, by the newcomers in ultra-fast fashion, as the old fast fashion brands to compete on price, speed of delivery and volume of newness.”
Interestingly, a recent report published by Oxford Economics, puts forward the economic benefits of SHEIN within the EU. The publication, written in collaboration with the brand, states that SHEIN contributed €1.1 billion to the EU economy and supported 6,130 jobs across multiple sectors. The report failed to recognize the significance or calculate the negative externalities created through its extractive business model which has approximately 600,000 styles available online at a given time, according to research.
Despite this, the likelihood of a SHEIN IPO on the London Stock Exchange continues, with recent news that the company is considering asking U.K. regulators to waive listing rules that would require a minimum of 10% of its shares to be publicly sold in the planned London flotation.
Lie’s observations on how the market might reward SHEIN’s IPO is that “This is emblematic of other systematic problems and demonstrates how the industry is caught within its own system.” he said. A sentiment echoed in my conversations with Karaosman and Arthur.
This year has also been punctuated with disappointing news on the investing landscape to scale solutions in textile recycling and material innovation. For instance, Renewcell’s file for bankruptcy in in February and Natural Fiber Welding’s failure to secure funding.
Whilst there was a positive ending to the year for Renewcell with the acquisition by private equity fund Altor, the bumpy ride in 2024 is indicative of wider financial tightening in the industry.
“It is disappointing when this happens.” Lie observed. “Across the board, investors and VCs should be willing to invest more in these companies to reduce friction and create price parity with sustainable alternatives in the long run.” he said.
How Fashion’s Chief Sustainability Officers Can Navigate 2025
Navigating the complexities of a changing regulatory landscape, supply chain uncertainties and macro-economic issues is no small feat for chief sustainability officers, who are often at the helm of this and making the case for climate-led decision making.
Kathleen Talbot, chief sustainability officer for U.S. based womenswear brand Reformation has been at the company for over a decade. “Throughout this time, the company has remained mission focused, despite global and political turbulence.”, Talbot told me in an interview.
Despite the reported decline in sustainability as a priority for a tranche of organizations, I asked Talbot how Reformation keeping on course with its various 2030 climate related goals.
“The brand is in a unique position, as it was founded with sustainability in mind. As a CSO, it’s great to be able to work in a company where we have buy in from the CEO and the board.” Talbot said.
“We have been able to demonstrate that exploring what it means to be sustainable and circular adds value, so it is not the first thing to go during hard times. We want to be a proof point that this type of business model isn’t at odds with financial performance.” she commented.
Reformation’s commitments and communication on climate-related performance acts as another proof point for how to be transparent. “2025 will be a milestone year for the organization as we are on track to achieve our goal to be climate positive by 2025.” Talbot shared.
But, she is also forthright that the brand missed its Scope 1 and 2 targets for this year, and is keen to publish this information to be accountable to its audience.
For 2025, Talbot said that textile recycling and material innovation are two focus areas for her team, paired with advocacy to create the right policies and infrastructure to make this possible.
The brand was recently dubbed one of two frontrunners out of 50 brands in Changing Market Foundation’s latest report ‘Fashion’s Plastic Paralysis’ which explored policies in place to mitigate microplastic release from textiles, in particular synthetics like polyester and nylon. Reformation has the target to reduce all synthetics (virgin and recycled) to less than 1% of total sourcing by 2025. Synthetics currently comprising 2.56% of its total fiber mix as of 2023, versus SHEIN’s 81.7% and Lululemon’s 67%.
I asked Talbot why veering away from fossil fuel-based fibers was important to the brand. “Preferred materials can’t be ours or the industry’s only strategy, we need more than just material substitutions.” she commented.
Talbot continued, “We have a hard line on synthetics, moving away from non-renewable petrochemicals by substituting but also by investing in research and development to eliminate recycled synthetics entirely.”
A number of the brand’s 2024 initiatives highlight how they are acting on this. Talbot referenced the recent collection with Ambercycle using cycora® material, a material made from discarded synthetic textiles that would otherwise be destined for landfills. cycora® has been dubbed by the Center for European Textile Innovation as highly durable, often a concern when using recycled materials.
Elsewhere, Reformation have lent into initiatives to engage customers on the environmental impact of clothing, including a collaboration with Poshmark to buy and sell secondhand garments. It is the latest addition to the brand’s ‘happy endings’ suite.
“Extending the life of garments for as long as possible whilst making it easy as possible for the customer is important. It’s not on the customer to solve these problems, it’s on us as a brands and retailers, but we do need their participation.” she continued.
Active advocacy and campaigning efforts are good indicators of genuine ambitions in shifting the industry’s challenges. In the U.S., the brand was a vocal supporter of the California SB707 Responsible Textile Recovery Act through its membership of the American Circular Textiles (ACT). The SB707 requires apparel and textile producers to form and join a Producer Responsibility Organization (PRO) to manage the entire lifecycle of textile products including collection, transportation, repair, sorting, recycling and safe disposal.
“Whilst not perfect, it represents a commitment to building out infrastructure and mechanisms for a more circular textile ecosystem in the U.S,” Talbot said. “Our goal is to be circular by 2030 and achieving that is going to dependent on broader reforms on infrastructure investments.” She added.
Talbot reflected “As we approach 2025, the fashion industry is not debating the problems anymore, we are in ‘lets the test the solutions territory’ and Reformation will continue to match our rhetoric with action.”
