Fashion companies lack awareness and transparency on water pollution

The fashion industry is well known as a major water polluter

Less than half the companies in the global fashion and textile industry are disclosing data on water impact on their business, while only one in ten of these show awareness of water pollution across the value chain.

According to a report by global environmental non-profit CDP, entitled Interwoven Risks, Untapped Opportunities, just 62 of the 136 fashion and textile companies requested by investors and customers to disclose water impact are doing so.

Just seven of these are aware that water pollution is a risk across every stage of the apparel value chain, while only 23% of analysed companies are setting targets or goals to reduce water pollution and just 6% monitor this and report on progress.

Only one single company from this list – H&M – mentions microplastics or microfibers, even though the production, use and disposal of textiles is a major source of microplastics.

The CDP notes that the fashion industry is well known as a major water polluter, with the textile industry having used 79 billion cubic metres of water in 2015 alone. As a result, these firms are facing material risks from this, including regulatory penalties, losing the social license to operate and damaged brand image.

Cate Lamb, director of water security at CDP, said: “The pressure is mounting for fast fashion to clean up its act when it comes to water pollution. Investors, regulators, customers, and consumers alike are all calling for change.

“The industry was hit hard by the Covid-19 crisis this year, and the temptation will be there to prioritise short-term gains.

“But the road to a resilient recovery lies in embracing sustainability and circular economy practices. This is the direction of travel and the companies leading the way will be best prepared for the future.”

The report follows an open letter released during World Water Week and signed by global brands such as Burberry, H&M and Primark as well as non-profits such as the CDP and WWF. The letter called on the fashion industry to embrace sustainability as it ‘builds back better’ after the Covid-19 crisis.

Burberry is one of the seven companies showing awareness of water pollution across their value chain, along with Gap, H&M and Kering Group (owner of Gucci and Saint Laurent). The others are Inditex (owner of Zara and biggest fashion group in the world), American multi-national clothing firm Hanesbrands, and South Africa-based multinational retailer Woolworths Holdings.

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According to CDP, those fashion brands that are not taking water pollution into account are missing out on $180m worth of business opportunities per year related to addressing this issue, for example investing in sustainable materials that contribute to improved brand image.

Such opportunities are underestimated and under-reported, the organisation says. According to a survey by McKinsey some 66% of US customers now consider sustainability when making a luxury purchase, with younger consumers particularly willing to pay more for products which have a proven minimised environmental impact.

The World Bank has also called water pollution the “invisible crisis”, while the UN estimates that 80%-90% of wastewater is returned to the environment untreated across the globe.

Agata Smeets, director of supply chain sustainability at Gap, said: “Water is a business-critical issue for the apparel industry, and we recognize its importance across our value chain. We must focus not only on reducing water consumption in our manufacturing operations, which we started tackling with our water reduction goal, but also in raw material cultivation and customer product water use.

“We are also committed to improving water access and quality, in the regions we operate. Water is a context based, localized issue and the industry will need to continue to work with stakeholders in key water basins across our value chain, including the communities that are impacted by our water usage.”


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...