Exposed: The network of polluters funding international climate policy

It's fashion, darling

Greenwashing experts in the fashion industry who chose to invest in a network of organisations to self-govern the industry’s sustainability goals rather than cut emissions met with the European Commission last year. Fashion, which accounts for 10% of the world’s greenhouse gas emissions, funds the organisations which advise the industry’s sustainable practices, resulting in superficial goals that appease consumers without affecting the bottom line. The majority of the companies that sit on the boards of these self-funded organisations even saw an increase in their gross emissions in 2020—but that hasn’t stopped industry representatives forming a think tank to influence European policy.

Fashion is the second-most polluting industry in the world, but rather than invest in reducing emissions, its leaders spent the past decade creating this network of organisations which now advises the industry on sustainability. This ensures the founding funders can hide behind a flurry of “green activity”—some of which are even external for profit ventures—rather than demand radical change. The boards of these organisations are cross-pollinated with representatives of brands whose emissions increase annually. The board members of every organisation which dictates sustainable practices to the industry each have a stake in the continued growth—and profits—of the industry.

These practices have become industry benchmarks. By setting goals that are, in essence, internally devised by the biggest culprits of industry, fashion has ensured it remains accountable only to its shareholders. In an audacious move even for an industry built on appearance, its latest collaborative venture is a think tank which proposes to advise European policy. Launched in May 2019, Policy Hub aims to push standardised measurements sold by other organisations in the network; it wants to write fashion’s self governance into policy. This may not be as difficult as it should be for a lobbying company of the world’s second-most polluting industry: its parent company, The Sustainable Apparel Coalition, has secured two meetings with the European Commission since Policy Hub was created.

The network

Fashion’s bid to rescue its image began in 2009 when Patagonia and Walmart wrote a joint letter “inviting CEOs of leading global companies to come together to develop an index that would measure the environmental impact of their products.” The Sustainable Apparel Coalition was formed in 2010 and together they produced their measurement tool, The Higg Index.

The Sustainable Apparel Coalition is based in California but was only registered in 2012 as a foreign company under the jurisdiction of Delaware, a state notorious for legal opacity that enable companies and individuals to hide finances and intent. The nonprofit was the brainchild of Patagonia’s Rick Ridgeway and Walmart’s Ken Lanshe, but it was CEO, Jason Kibbey, who signed the company documents in 2012. Kibbey also created The Sustainable Apparel Foundation in California’s jurisdiction that same year, which was renamed the Apparel Impact Institute in 2017 as a collaboration between “the Sustainable Apparel Coalition, The Sustainable Trade Initiative, and Target Corporation to strategically drive sustainability improvements”. (The chair of The Sustainable Trade Initiative is Magdi Batato, Executive VP and Head of Operations for Nestlé, a company notorious for its unsustainable and unethical practices.) In 2019, Kibbey founded Higg Co Ltd with a Californian address but under the jurisdiction of Delaware.

The relationship between the SAC, Aii and Higg Co is obvious, but fashion’s network spreads much further afield, specifically to The Netherlands. The SAC collaborates with the Zero Discharge of Hazardous Chemicals, another initiative started in 2011 which peddles a roadmap to zero and certification programs. The ZDHC in turn endorses the Higg Index and corroborates the SAC’s sustainability claims. This is unsurprising when two board members of the SAC also appear on the board of the ZDHC: H&M’s Pascal Brun and Arvind Ltd’s Abhishek Bansal. The SAC, ZDHC and The Laudes Foundation (of retail giant C&A) all share the same roof on Rokin Street in Amsterdam.

Another board member of the ZDHC is Nike who in turn are one of the core funders of the Science Based Targets initiative which “drives ambitious climate action in the private sector by enabling companies to set science-based emissions reduction targets.” The SBTi is the final piece of fashion’s sustainability puzzle, setting another benchmark for companies to greenwash their initiatives, and is recommended by Policy Hub, alongside the Higg Index.

The reality

The hypocrisy of fashion’s worst offenders sitting on the boards of organisations who supposedly lead sustainability initiatives is shocking. Take H&M, who, despite having a representative on the board of the SAC and ZHDC, self-reported to the Carbon Disclosure Project an increase in gross global emissions in 2020. The majority of H&M’s emissions come from sales which suggests that the best thing the company could do for the environment would be to create financial targets that fall far below the $22.3 billion made in 2020.

Despite the increase in gross emissions, H&M scored an A with the Carbon Disclosure Project (CDP). The CDP has close ties to this “sustainable” fashion with its CEO, Paul Simpson, also sitting on the board of SBTi.

H&M also consumes more water year on year, reporting “much higher consumption” at hundreds of facilities located in water-stressed areas. H&M also reports to take hundreds of thousands of litres from freshwater sources. The company received a B score for water from the CDP.

To get an A from the CDP it looks like a company has to reduce its gross emissions. Founding partner of the SAC, Walmart, received an A from the CDP for reducing gross emissions by 0.29% in 2020.

Nike, the $34.8 billion company that funds the Science Based Targets initiative and sits on the board of the ZDHC, increased their gross global emissions in 2020 by 1.38%. Despite this, Nike scored an A- with the CDP.

Over 3000 metric tons of Nike’s CO2 results from the use of corporate jets (during a pandemic). This equates to the annual energy consumption of 365 American households.

Even the SAC board member who represents the World Resources Institute has a personal stake in the fashion industry. Liz Cook, Vice President For Institutional Strategy And Development, launched her own underwear brand in September 2020.

Climate Disaster

The World Economic Forum’s 2021 Global Risk Assessment states that extreme weather, climate action failure and human environmental damage are the top three likely risks to threaten humanity over the coming decade. Climate action failure is also the second most impactful risk, after infectious diseases.

Greenwashing devised on an international scale by the likes of the fashion industry is the type of failure—not inaction, failure—of which the WEF warns. Fashion would have us believe that achieving circularity will solve the climate crisis, which does nothing to tackle emissions produced by the company. (One could argue direct company emissions would increase with circularity programs put in place.) Ultimately, these companies want to sell the deadly lie that they can sustainably sell 24 seasons of clothes per year.

These companies want us to believe they are truly invested in climate change and mitigation when not only do their emissions increase annually, but, like Nike, executive management require financial incentives to correctly manage climate-related issues.

We cannot mitigate the risk of climate action failure whilst allowing stakeholders to band together, call themselves experts, and insert themselves in politics. These are the same stakeholders who have ignored the warnings of climate change for years, the same stakeholders who invest millions in image to avoid substantial change. These are the stakeholders who pose an existential risk to humanity if we continue to let them self-govern, let alone influence policy.

These people aren’t leaders. They are consumers. Their hunger is a threat to us all.

Share


Platform Enterprise investigates what keeps the world in crisis, and solutions. Subscribe to get the investigations delivered to your inbox.

You can follow @PlatformEnterprise on various social media. You can also find me on Twitter: @DeBeaudoir