CDP: Fashion Companies Slow to Recognize Water Pollution Risks

(Photo Credit: Priscilla Du Preez, Unsplash)

by | Sep 14, 2020

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CDP: Fashion Companies Slow to Recognize Water Pollution Risks

(Photo Credit: Priscilla Du Preez, Unsplash)

CDP published a new report today analyzing water data from 62 companies involved in the fashion, apparel, footwear, and home textiles industry. Only seven companies demonstrated awareness of water pollution across their entire value chains.

“Interwoven Risks, Untapped Opportunities” pulled data from brands, manufacturers, and retailers in the industry that disclosed through CDP’s 2019 water security questionnaire. Water pollution poses enormous risks to these companies, the report concluded. Better water management is actually better for business as well: CDP found that companies reported more than $180 million in business opportunities related to water pollution reduction.

“The report is a state-of-play piece which aims to inform the market and stimulate behavior change amongst companies within the apparel and textile sector, in addition to the financial institutions that provide capital to these companies,” says Cate Lamb, global director of water security for CDP.

Lamb shared key takeaways from the new report for sustainability leaders in the fashion and textile industry:

What are the main risks that water pollution poses for apparel companies?

Pollution issues arise across the whole apparel value chain, from agri-chemical pollution linked to the growing of cotton, cattle (for leather), extraction of oil (for polyester), and other materials, to the discharge of chemicals during textile manufacturing, to detergents, and plastic microfibers released when clothes are washed.

These impacts manifest themselves as material physical, regulatory, and reputational and litigation risks for companies and the financial institutions fueling them.

Regulatory risks include tightening water discharge regulations and product bans, such as the EU wide ban on single use plastic with companies receiving fines, enforced factory closures or even stranded business lines as policymakers get more serious on the issue.

Reputational risks are an interesting issue — for example, where a brand is linked to water pollution, causing negative reactions in the local community as well as causing environmentally-minded consumers to spend their money elsewhere. The Greenpeace Dirty Laundry campaign is still having an effect today.

What did CDP learn about corporate awareness of these risks?

Our analysis indicated that the apparel sector has a woefully low level of awareness on this issue, with few identifying risks beyond the manufacturing stages of their value chain.

Only five of 62 of disclosing companies reported substantive risks associated with raw material production, and not a single company considers pollution at the product use and disposal phases to be a substantive risk to their business. Looking at the research, we think there are substantial risks that companies are overlooking.

As for the global issue of microplastics, which harm aquatic life and can even accumulate in human body tissue, only one company in the sample actually mentioned microplastics or microfibers in their response to CDP’s 2019 water security questionnaire: H&M reported that they encourage consumers to use guppy bags when washing clothes to reduce the release of microfibers.

That no other apparel companies mention this issue is shocking considering a study in the journal Nature has shown that the washing of synthetic fabrics accounts for over 35% of all microplastics released to the environment globally.

Are you seeing any effective corporate initiatives or efforts to address water pollution?

Some companies are beginning to take action on this issue, but it’s much too few and far between. Based on CDP data, just seven companies in our analysis (11%) acknowledged water pollution as an issue across the value chain — an important step.

In terms of practical action, a good example is H&M. The company reports it is piloting a technology called Colorifix, an industrial-scale biological dyeing alternative, which uses no hazardous chemicals and reduces water use by up to 90%. They also require their suppliers to consistently report water performance through the Higg Index, conducting regular site visits, and incentivizing high performance with more orders. Additionally, H&M allows consumers to return clothes and recycle them, which reduces the lifecycle impacts of the garments.

Another good example is Gap Inc. committing to sourcing 100% sustainable cotton — organic, recycled and Better Cotton Initiative cotton — and starting to source more recycled polyester and nylon fibers.

The Zero Discharge of Hazardous Chemicals initiative is an exciting campaign we are seeing more apparel and textile companies signing up to, including Burberry, Adidas, and Puma.

We know what the problems are. Technologies and other solutions exist to solve it. What appears to be lacking amongst many is the will to act. This must change if we are to deliver resilient communities, habitats, and businesses.

Where do you see apparel brands headed on this issue?

The direction of travel is unmistakably toward a more sustainable and circular future for the sector. Recently I was one of the signatories on an open letter signed by major fashion brands and environmental NGOs, calling on the fashion industry to embrace sustainability and environmental resilience in the recovery from covid-19.

The economy is changing, and apparel companies must be part of that. Consumers, regulators, civil society, and investors are all waking up to the issue so the demand for change will only grow louder.

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