FFashion accounts for 10% of global carbon emissions and is the second most polluting industry in the world. But in an increasingly climate-conscious society, it is increasingly trying to present itself as sustainable to appeal to customers.
A key goal is to reduce greenhouse gas emissions, and over the past two decades many brands have signed up to a program called the Carbon Disclosure Project (CDP), an independent organization that assigns ratings to environmental performance.
However, the Guardian can exclusively reveal how the fashion industry’s impact on the planet is hidden. Thanks to the way the scores are calculated, household names such as H&M and Nike can claim an overall decrease in annual carbon dioxide emissions – and receive high CDP scores – despite their actual emissions increasing.
It’s all in the fine print. These fashion brands report their gross global emissions, but these are calculated relative to total revenue. This means that as long as their emissions increase less than their revenues increase each year, total emissions are counted as decreasing. In Nike’s 2020 Climate Change Report, it describes how “emissions grew 1% year-over-year, which was offset by revenue growth of 7% year-over-year. other, leading to a decrease of more than 5% in emissions per turnover in [financial year 2019]”.
Despite the rise in emissions, the CDP scored Nike A-. H&M also reported increases in “Gross Global Emissions” in 2017 and 2018, but because these emissions increased less than revenue, it reported an overall decrease and also received an A- each year.
Linking emissions and revenue is just one of the tools provided by the Greenhouse Gas Protocol, which defines the emissions reporting system. The distribution of emissions, in Scope 1, 2 and 3, is also essential to understand how brands can appear to reduce their total emissions.
Scope 1 emissions are those that come directly from the company that burns fossil fuels. Scope 2 emissions are those that come from energy purchased from utility providers. Scope 3 emissions are all other indirect emissions that occur throughout the value chain. For the CDP report, companies provide “gross combined scope 1 and 2 global emissions” and self-report whether they have increased or decreased relative to increased revenue.
Nike’s Scope 1 emissions – the metric tons of CO2 produced by the company’s combustion of fossil fuels – have increased every year since 2016. This includes, among others, retail, distribution and offices. The sportswear maker said it emitted 17,975 metric tons of CO2 in 2015, rising to 47,398 in 2021, a 163% increase. H&Ms fell from 10,723 in 2015 to 11,973 in 2021, from a high of 13,380 in 2020.
Importantly, many companies exclude Scope 3 emissions, which are categorized as upstream or downstream, meaning they do not consider pollution produced by their supply chain. Although Nike monitors these emissions, it does not provide a raw total. Business travel is calculated as upstream Scope 3 emissions, ie the impact of employee flights is not included in its “gross global emissions”. Nike did not respond to a request for comment, but previously said Scope 3 emissions such as business travel are not included in its future sustainability goals.
H&M accounts for and targets its Scope 3 emissions. In a statement to the Guardian, the company said: “Scope 1 and 2 emissions represent less than 1% of our reported emissions and although significant they are not our work target to achieve our 56% reduction target. That won’t be enough. Our primary focus is Scope 3. We see significant growth opportunities in a way that respects planetary boundaries. The company made a profit of €1.36bn (£1.14bn) in 2021.
Experts are appalled by the industry’s self-proclaimed progress, warning that focusing on increasing efficiency rather than cutting absolute emissions – known as relative decoupling – puts the planet at risk.
“Celebrating the success of this kind of relative decoupling is a recipe for disaster,” said James Dyke, associate professor of Earth system science at the University of Exeter. “Global warming will stop when we stop pumping greenhouse gases into the atmosphere. Nike having a few million more in the bank doesn’t change that.