Fashion Industry Experts Outline Sustainability Goals for 2025
An examination of fashion's progress on environmental and social sustainability in 2024 reveals a complicated scenario.
Upcoming guidelines within the EU on supply chain accountability, transparency, and forced labor serve as persuasive signals for brands and retailers.
However, the majority of significant players worldwide are failing to keep pace, whether it's in terms of assessing and minimizing environmental impacts, decreasing total scope 3 greenhouse gas emissions, or eradicating petroleum-based textiles.
According to the 2025 State of Fashion report by the Business of Fasion and McKinsey, only 18% of fashion executives consider sustainability a top-three risk for growth in 2025, a decline from 29% in 2024. This aligns with the broader trend across various industries, as mentioned in Bain & Co's Sustainability Visionary CEO Guide, which found that sustainability concerns have been set aside to prioritize business growth, inflation, geopolitical instability, and the adoption of AI.
Despite expectations from significant events like the UN CBD COP16, UNFCCC COP29, and the INC-5 for the Global Plastics Treaty, the fashion industry's stakeholders have yet to take substantial action. This reluctance is surprising considering the world's rapid approach to reaching 3.1 degrees, a significant deviation from the global goal of 1.5 degrees as human activities continue to threaten planetary boundaries. The fashion industry's actions are also limited by recent World Economic Forum reports warning of escalating temperatures and extreme weather events disrupting supply chains and productivity, potentially impacting up to a quarter of companies' 2050 EBIDA.
The lack of action on climate change presents a serious financial risk to the fashion industry and the broader textile and apparel sector. Four experts were consulted to understand fashion's sustainability priorities for 2025.
Fashion's Blueprint for Innovative Development
Despite not having reached 'peak stuff' as of 2024, apparel consumption is projected to surge by 63% to 102 million tons within the next five years. If the industry maintains its current trajectory, by 2050, it would consume over a quarter of the world's carbon budget.
Textile Exchange, in its recent Materials Market report, documented an 7% increase in global fiber production from 2022 to 2023, bringing the total to 124 million tons. The organization anticipates this figure rising to 160 million tons in 2030, assuming business as usual.
During Cyber Monday, a popular shopping day in the Black Friday calendar, I had a conversation with sustainability advocate and writer Rachel Arthur. Sales this year reportedly increased by 9.5% compared to Cyber Monday in 2023, according to Barclaycard.
Arthur commented on fashion's performance in 2024, stating, "Even when positive developments occur, consumption continues to increase as a result of the industry's current business model. Growth in revenue terms remains the number one metric for success, despite its correlation with resource extraction."
The Textile Exchange 'Reimagining Growth – A Landscape Analysis' report, authored by Arthur and her team, aimed to challenge this understanding of growth and address critical production volume issues.
Arthur discussed the report's significance, "The report engages with the topic of growth, including discussions about production volumes. It discusses what bold leadership looks like and the enabling environment that can support such leadership. For instance, what does it look like in practical terms to cap virgin resource use?" she added, acknowledging that addressing these issues can be challenging for publicly traded companies due to their obligations to shareholders.
To promote transparency in production volumes, Fashion Revolution recently recorded that 89% of the industry's largest players did not disclose their annual production figures. According to Arthur, the report emphasizes the need for mandatory disclosure on these volumes, extending beyond unsold stock statistics.
"Policy has a lag time of three to five years before coming into force," Arthur stated. "This cannot be used as an excuse for inaction in the interim."
Encouraging a shift in perspectives and narratives is another key focus of the report, with a reevaluation of terminology. Notably, a 2024 study by Textile Exchange revealed that 65% of industry participants believed they could not use the term 'degrowth' within their organizations. Eliminating the stigma attached to alternative growth and abundance concepts is a vital step for the industry in 2025.
Supply Chain Strategies - Building Stronger Connections, Fostering Collaboration
As the industry works towards establishing and reaching decarbonization and clean energy procurement targets, ensuring a fair transition while protecting workers' rights and livelihoods across supply chains has gained importance.
Dr. Hakan Karaosman, an associate professor at Cardiff University, describing his interactions with suppliers, noted an increasing sense of pressure, particularly from incoming regulations. Suppliers reported experiencing worse pressures than before, even during the COVID-19 pandemic.
Examinations into the working conditions of luxury brand titans like Christian Dior, under LVMH's management, and Loro Piana have caught the public's attention this year. Karaosman welcomed these scrutinizations, stating, "Luxury industries often slip under the radar during these situations, but they have shorter supply chains and the financial power to act responsibly."
I asked Karaosman for his perspective on the role of CEOs and executive teams, who have the power to incorporate sustainability into a company's decision-making process. He responded, "It's time to wake up. Sustainability shouldn't be reduced to a mere accounting tool. Genuine actions lead to social welfare, ecological consciousness, and monetary gain."
He emphasized the importance of open communication within a business for individuals in top-tier positions, such as those in sustainability and operations, who often collaborate closely with suppliers on the ground.
Karaosman noted, "The transition towards a fair, equitable, and socially inclusive business environment cannot be co-opted as buzzwords like 'circular economy' and 'sustainability.' Stakeholders must consider the fairness and inclusivity of their business climate initiatives and actions."
He highlighted the significant role that purchasing teams play in this area, stating, "They have the capacity to distribute financial capitol and influence with suppliers."
However, it's not just about monetary capitol, according to Karaosman. "Emotional capitol is equally important. Suppliers crave respect and care from brands. I encourage brands to shift from a transactional approach to a more relational one in 2025."
Investors' Expectations for Fashion
Investors are acutely aware of the social, environmental, and nature-related risks associated with the intense growth-driven business model described by Karaosman in his interview. Therefore, what are the expectations of the investor community? San Lie, CEO of ASN Impact Investors, offered some insights during our conversation.
ASN Impact Investors made headlines in August by divesting €70 million worth of shares from 12 companies, including H&M Group, Inditex, and VF Corp.
Lie explained that the decision was due to "a multitude of issues going awry. Progress in human rights was present, albeit slow. However, the impact of COVID-19 on factory workers was another concern. This led us to question our comfort level with the situation."
ASN Impact Investors established four criteria to evaluate fashion companies within its portfolio, with one criteria leading to exclusion if met. Companies were assessed based on their presence in low-wage countries and their high production rate with multiple seasonal collections.
However, ASN Impact Investors is open to reconsidering the inclusion of fashion companies in the future if they make significant strides towards becoming circular in their practices, provided they meet rigorous screening criteria.
Authenticity in circularity initiatives can be challenging to establish, with schemes like in-store take-back programs being lauded as solutions, only for clothes to end up in the Global South as highlighted by the Changing Markets Foundation.
Lie pointed out the effect of fast-fashion giants like Temu and SHEIN on global brands and retailers, stating, "The pressure has intensified in recent years, as these newcomers force old fast-fashion brands to compete on price, speed of delivery, and volume of newness."
A recent report published by Oxford Economics suggests that SHEIN contributes €1.1 billion to the EU economy and supports 6,130 jobs across various sectors. However, the report failed to acknowledge or calculate the negative externalities created through SHEIN's extractive business model, which offers approximately 600,000 styles online at any given time.
Despite this, the likelihood of a SHEIN IPO on the London Stock Exchange remains high, with recent news indicating that the company is considering waiving listing rules that require a minimum of 10% of its shares to be publicly sold in the planned London flotation.
Lie expressed concern over this trend, stating, "This is emblematic of other systemic problems and demonstrates how the industry is trapped within its own structure."
This year has been marked by disappointing news regarding the scaling of solutions in textile recycling and material innovation. For example, Renewcell's bankruptcy filing in February and Natural Fiber Welding's failure to secure funding.
Whilst Renewcell eventually secured private equity funding from Altor, the challenges faced in 2022 are indicative of the broader financial constraints in the industry.
"It's disheartening when this occurs," Lie observed. "Investors and VCs should be more willing to invest in these companies to reduce friction and achieve price parity with sustainable alternatives in the long run."
Navigating 2025 as a Fashion Sustainability Officer
Navigating the complexities of a changing regulatory landscape, supply chain uncertainties, and macro-economic issues is no small feat for chief sustainability officers, who are often at the forefront of advocating for climate-led decision-making.
Kathleen Talbot, chief sustainability officer for U.S.-based women's fashion brand Reformation, has been with the company for over a decade. She shared her experiences, stating, "Throughout this time, the company has remained mission-focused, despite global and political upheaval."
Despite some organizations seemingly decreasing their focus on sustainability, I inquired about Reformation's progress towards its 2030 climate-related objectives.
"The brand has an advantage as it was established with sustainability in mind," Talbot explained. "As a chief sustainability officer, it's gratifying to work in a company where we have backing from the CEO and the board."
She went on to say, "We've proved that pursuing sustainability and circularity adds value, so it's not among the first things to be cut during tough times. We aim to serve as proof that this business model doesn't clash with financial success."
Reformation's openness about its climate-related performance is another example of transparency. "2025 is a significant year for us as we're on track to meet our goal of becoming climate positive by 2025," Talbot shared.
However, she conceded that the brand failed to meet its Scope 1 and 2 targets for this year and is planning to disclose this information to maintain accountability with its audience.
For 2025, Talbot mentioned textile recycling and material innovation as key focus areas, paired with lobbying for the right policies and infrastructure to facilitate these changes.
Reformation was named one of two pioneers out of 50 brands in Changing Market Foundation's latest report 'Fashion's Synthetic Stagnation', which investigated policies in place to reduce microplastic release from textiles, particularly synthetics like polyester and nylon. Reformation aims to reduce all synthetics (both virgin and recycled) to less than 1% of total sourcing by 2025. Synthetics currently account for 2.56% of its total fiber mix in 2023, compared to SHEIN's 81.7% and Lululemon's 67%.
I asked Talbot why shifting away from fossil fuel-based fibers was crucial to the brand. "Preferred fibers can't be the sole solution; we need more than just material substitutions," she answered.
Talbot further explained, "We have a strict policy on synthetics, moving away from non-renewable petrochemicals by substituting and also investing in research and development to eliminate synthetic waste completely."
Various of Reformation's 2024 initiatives illustrate this action. Talbot referred to the recent collection in collaboration with Ambercycle, using cycora® material, a durable material made from discarded synthetic textiles that might otherwise end up in landfills.
Furthermore, Reformation has partnered with Poshmark to encourage customers to buy and sell secondhand garments as part of its 'happy endings' initiative.
"Prolonging the life of garments for as long as possible and making it easy for the customer is essential," Talbot said. "It's not the customer's responsibility to address these problems; it's ours as a brand and retailer, but we do need their participation."
Active advocacy and lobbying are indicators of genuine intentions to transform the industry's challenges. In the U.S., the brand supported the California SB707 Responsible Textile Waste Management Act through its affiliation with American Circular Textiles (ACT). The SB707 requires apparel and textile producers to establish and join a Producer Responsibility Organization (PRO) to manage the entire lifecycle of textile products, including collection, transportation, repair, sorting, recycling, and safe disposal.
"Though not perfect, it symbolizes a commitment to constructing a more circular textile ecosystem in the U.S.," Talbot said. "Our aim is to be circular by 2030, and achieving that will depend on broader reforms in infrastructure investments." She added.
As Reformation approaches 2025, the fashion industry no longer debates the problems; they're now in the 'let's test the solutions' stage, and Reformation will continue to align their rhetoric with action.
- In response to the EU's upcoming guidelines on supply chain accountability, transparency, and forced labor, fashion brands and retailers should consider integrating sustainable fashion strategies into their supply chain management.
- The fashion industry's reluctance to prioritize sustainability, despite events like the UN CBD COP16 and UNFCCC COP29, could lead to significant financial risks due to increased energy costs and disruptions in supply chains caused by climate change.
- To promote a more sustainable fashion industry, it's crucial for CEOs and executive teams to view sustainability as more than just an accounting tool and incorporate it into their decision-making processes.
- Investors like ASN Impact Investors are increasingly scrutinizing fashion companies based on their social, environmental, and nature-related risks, and they are likely to divest from companies that fail to meet rigorous sustainability criteria.
