The Financial Case for Science-Based Targets
The stakes are high for addressing climate change. Research from the United Nations outlines grim outcomes if we don’t reduce carbon emissions by 45 percent by 2030.
As the fashion industry works towards this goal, a growing number of brands and suppliers are adopting science-based targets. Centered on the benchmark of limiting global warming to 1.5 degrees Celsius, these commitments translate the broader need for climate action to a corporate level.
The “Setting the Bar: Science-Based Targets” panel at Texworld USA on July 21 delved into how these targets work and how companies are using these goals. Moderator John Mowbray, founder and editor of Ecotextile News, was joined by panelists from Lenzing, Nordstrom and the World Resources Institute.
During the discussion, Krishna Manda, senior manager sustainability integration at Lenzing, explained that the company was the first cellulose-based fiber producer to have Science Based Targets approved in November 2019. Lenzing is working towards a long-term vision of being net zero, with full corporate engagement.
“If we don’t work on climate change, our bottom line is going to get affected,” Krishna said. “Whether it’s through water scarcity, whether it’s through the disruption of our own value chain.”
As an example, Krishna pointed out that water scarcity could be a significant financial problem for a company that relies on cotton, since it would drive up costs for the crop.
Another pressure that companies are facing comes from consumers, and notably the up-and-coming Generations Y and Z that will eventually be their investors. Meanwhile, employees also want to work at brands that are having a positive environmental impact.
According to panelists, COVID-19 is strengthening rather than weakening sustainability efforts. Nordstrom has released a sustainability strategy for 2025 in the midst of the crisis, and the Science Based Targets initiative has been adding companies during the pandemic.
Science-based targets require companies to account for all aspects of their activities, including those of their suppliers. For a retailer such as Nordstrom, this means looking at the environmental impact of its private-label brands and operations, as well as those of the brands it carries. For Lenzing, this means looking beyond its own operations to its entire supply chain.
According to Michael Sadowski, research consultant at the World Resources Institute, the greatest energy usage in apparel production typically happens in textile processing due to the resources needed to spin, dye and finish materials. Comparatively, cut and sew and raw materials tend to produce less emissions.
“I wouldn’t say that the suppliers are the culprits, because you have brands that are making design decisions, sourcing decisions that get pushed upstream,” Michael said. “So frankly, as a sector, we have to have collaboration. It’s not enough to have brands set SBTs and then throw the burden on their supply chain.”
Achieving SBTs will also not be possible without investment from brands and retailers. Given the funding needed to make change, other stakeholders also need to get on board.
Chelsey Evans, sustainability lead at Nordstrom, noted that when investors ask questions about sustainability that are in line with employees’ and customers’ positions, that it makes it easier to maintain momentum.
Sustainable investments can also be a way to navigate through challenging times.
“I think we’ve seen that companies that are investing in managing their sustainability efforts or managing their environmental impacts tend to be more stable during a time such as a recession,” said Chelsey. “As we all learned, we have to learn so much more about our supply chains, about our supply base, just all throughout, and my sense is that it means you learn so much more, it makes you make better decisions, and then you do see that stability.”
Watch the full conversation on Texworld USA. And learn more about science-based targets.