Decarbonizing Fashion: A Strategic Analysis
Translating fashion’s decarbonization targets into action has proved difficult, as outlined in our March 2024 article. We discussed the importance of working with Tier 2 suppliers to reduce emissions, as this stage accounts for a significant portion of a brand’s emissions. In this article, we delve deeper into the strategies and actions fashion brands can take to decarbonize their supply chain effectively.
The Significance of Tier 2 Production
Tier 2 production is the key emission hotspot in the fashion industry, representing a substantial portion of Scope 3 emissions. To address this issue, brands need to focus on reducing emissions at this stage, which can lead to cost efficiencies and significant environmental impact.
Two Routes to Decarbonization
Our analysis, in collaboration with Made2Flow, identified two primary routes to decarbonize Tier 2 production. Suppliers can pursue technical decarbonization levers or brands can offer incentives to lower-carbon emission suppliers. Both approaches are essential and can be pursued simultaneously for maximum impact.
Pursuing Supplier Decarbonization
Implementing decarbonization levers at the supplier level can lead to significant emissions reductions and cost savings. Brands can support suppliers in their decarbonization efforts through collaboration programs and investment initiatives.
Providing Supplier Incentives
Brands should prioritize working with suppliers with lower emission profiles and provide incentives for them to improve their sustainability practices. Access to primary data and a focus on energy efficiency can drive significant reductions in emissions.
Six Actions for Success
For fashion brands to achieve their sustainability targets, they need to take strategic actions related to supplier relationships, data access, supplier education, financing, renewable energy projects, and collaboration with peers. These actions can pave the way for a more sustainable and environmentally friendly supply chain.
FAQ
Q: How can fashion brands reduce emissions at the Tier 2 level?
A: By working closely with suppliers, providing incentives for decarbonization, and investing in renewable energy projects.
Q: What are the key challenges in decarbonizing Tier 2 production?
A: Fragmented supplier landscape, limited access to primary data, and the need for significant investments in decarbonization initiatives.
Conclusion
Decarbonizing fashion’s supply chain is a complex but essential task for brands looking to reduce their environmental impact. By focusing on Tier 2 production, implementing strategic actions, and collaborating with suppliers and industry peers, fashion brands can make significant progress towards their sustainability goals.
