fAshion is responsible for 10% of global carbon emissions and is the second most polluting industry in the world. But in an increasingly climate-conscious society, she is increasingly trying to present herself as sustainable in order to appeal to customers.
A major goal is reducing greenhouse gas emissions, and over the past two decades many brands have joined a program called the Carbon Disclosure Project (CDP), an independent body that assigns marks for environmental performance.
However, the Guardian can exclusively reveal how the fashion industry’s impact on the planet is being hidden. Thanks to the way the scores are calculated, big names like H&M and Nike are seeing an overall decline in annual carbon emissions – and getting high scores from the CDP – even though their actual emissions are rising.
It’s all about the fine print. While these fashion brands report their global gross emissions, these are calculated based on total sales. That is, as long as their emissions increase less than If their income increases each year, the total emissions are counted as a decrease. Nike’s 2020 Climate Action Report describes how “Emissions increased 1% year over year, offset by 7% year over year sales growth, resulting in emissions per sales decline of over 5% [financial year 2019]“.
Despite the increase in emissions, the CDP gave Nike an A- rating. H&M also reported self-reported increases in “gross global emissions” in 2017 and 2018, but because those emissions grew less than sales, the company reported an overall decrease and was also awarded an A- each year.
Linking emissions and revenues is just one of the tools offered by the Greenhouse Gas Protocol, which sets the emissions reporting scheme. Breaking down emissions into Scope 1, 2 and 3 is also crucial to understanding how brands can reduce their overall emissions.
Scope 1 emissions are those that come directly from the company’s burning of fossil fuels. Scope 2 emissions are those that come from energy purchased from utilities. Scope 3 emissions are all other indirect emissions that occur along the value chain. For the CDP report, companies provide “global combined Scope 1 and 2 gross emissions” and self-report whether these have increased or decreased as sales have increased.
Nike’s Scope 1 emissions — the metric tons of CO2 generated by the company’s burning of fossil fuels — have increased every year since 2016. These include retail, distribution and offices, among others. The sportswear manufacturer says it emitted 17,975 tonnes of CO2 in 2015, up to 47,398 in 2021 – a 163% increase. H&Ms have increased from 10,723 in 2015 to 11,973 in 2021, down from a peak of 13,380 in 2020.
Crucially, many companies exclude Scope 3 emissions, which are categorized as upstream or downstream, meaning they don’t account for the pollution generated by their supply chain. Although Nike tracks these emissions, there is no gross total. Business travel is calculated as Scope 3 upstream emissions, meaning the impact of its employees’ flights is not included in “gross global emissions”. Nike did not respond to a request for comment, but previously stated that Scope 3 emissions, such as business travel, are not included in its future sustainability goals.
H&M accounts for and tracks its Scope 3 emissions. In a statement to the Guardian, the company said: “Scope 1 and 2 emissions account for less than 1% of our reported emissions and while important, they are not the focus of our work to meet our 56% reduction target . That won’t do. Our primary focus is Scope 3. We see significant opportunities to grow in ways that respect the planet’s limits.” The company posted profit of €1.36 billion (£1.14 billion) in 2021.
Dismayed by the industry’s self-proclaimed advances, experts warn that focusing on increasing efficiency rather than reducing absolute emissions – known as relative decoupling – is putting 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. The fact that Nike still has a few million more in the bank doesn’t change that.”