Textiles are all around us all the time, from the moment we wake up to the moment we go to sleep. Consider the linens on your bed, the clothes you wear, and the seat of the chair you sit in at work. In all, our company found that textiles account for almost 1/10th of man-made emissions annually.
Per our November 2021 estimates, apparel and textile production and sale generate 2.4 billion tons of greenhouse gas emissions annually. This represents 7.25% of total man-made emissions, which is a bit over 30 billion tons.
Those are large numbers. To put it in context, 2.4 billion tons of greenhouse gases is equivalent to the weight of about half of all the oil consumed across the globe every year. But that’s not all: The sector’s emissions are increasing in absolute terms as well. We expect the textile sector to reach 9.5% of global manmade emissions (from 7.25%) by 2030.
But before jumping to any conclusions about the sector, it’s important to remember that it generates vast employment, and these emissions are from across the globe. By my count, the sector employs more than 400 million people worldwide and has a long value chain that impacts many vocations, from cut-sew-make (textile and apparel), which employs an estimated 75 million people, to the millions of cotton farmers, industrial workers, and store workers worldwide.
EMISSIONS COME FROM A VAST WEB ACROSS THE EARTH
Emissions are generated in the manufacturing process that covers:
1. Making (or growing) the fiber.
2. Converting the fiber into yarn.
3. Converting the yarn into fabric.
4. Shaping the fabric into the final product.
5. Delivering the product to consumers.
Emissions come from hundreds of thousands of enterprises and their manufacturing facilities across the globe. The sector also tends to be a large component of the GDP in several emerging markets. In many cases, it is the dominant manufacturing sector, providing higher income opportunities than those otherwise available. This is the case in countries including Cambodia, Bangladesh, Sri Lanka, Pakistan, Honduras, Vietman and Guatemala.
Still, it’s important to remember that 165 companies contribute nearly 24% of the emissions. The Pareto principle seems to apply everywhere. Our recent study identified 165 companies across the globe, and across the production value chain (from fiber all the way to product) that generate and influence 608 million tons of carbon emissions.
This means that rather than looking at the sector as too large to figure out, there is a starting point. Start with the leaders and then go through the rest of the sector. Further, contrary to popular perception, we found that brands and retailers are only a (small) part of the emissions. There are large organizations deep in the production process that have a significant influence too.
And equally important, nearly 60 of them have already committed to significant emission reductions or net-zero by the middle of the century. Here is a breakdown of the 165 key firms that dominate the sector’s emissions:
Fiber production and trading: 38
Yarn conversion: 32
Fabric production: 66
Textile/apparel brand and retailers—logistics and selling: 29
CHARTING A SUSTAINABLE FUTURE FOR THE SECTOR
The large players’ commitment to emission reduction goals is a starting point. Hopefully that motivates others in the sector to build and implement their own plans.
There are several tailwinds that will enable the sector as a whole. Businesses operating in the sector, or those that are connected to the sector, should keep an eye on these. There will be opportunities to drive and accelerate investment plans to adopt clean technologies. Emerging national mandates will play an enabling role. Several countries are framing pathways for emissions reductions into law. Seventeen countries have incorporated net-zero goals into law, while dozens more have made pledges or have policy development underway.
As electricity gets decarbonized, so will yarn conversion and parts of fabric production (about 30% of the sector’s emissions).
Reducing the impact of fibers will become core to the sector. Businesses enabling preferred fibers, from recycled polyester to better cotton, are already gaining traction. Fiber choices will be crucial in determining the pathway for the sector.
Leaders will also have to navigate the new consumer consciousness. Historically, consumers have been slow to engage. However, more surveys are showing that Gen Z, especially those in North America and Europe, are growing up believing climate change to be an existential threat. These consumers will soon come into their earning years.
Climate finance and carbon markets are other areas for opportunity. They are likely to support the sector’s move to alternate fuels (cleaner bio-based fuels, renewable natural gas, etc. that are required for heating), investing in regenerative farming that promotes livelihoods, and accelrating the adoption of renewables.
As climate becomes increasingly central to consumers’ and investors’ interests, the transformation of this sector is inevitable.