June 27, 2022 REPORT: Decouple Growth From Resource Extraction NOW

Textile Exchange’s Material Change Insights Report shows glimpses of progress in sustainable sourcing, but emphasizes that dematerialization is crucial right away.

On June 27, Textile Exchange released its Material Change Insights Report. The new analysis maps out progress towards more sustainable sourcing at the raw material level of the fashion and textile supply chain, using data from Textile Exchange’s Corporate Fibers and Materials Benchmark (CFMB).

As the largest peer-to-peer comparison initiative in the industry, this year saw 292 brands come together to collectively track their efforts. The resulting report provides a holistic overview of the industry’s direction of travel, as well as alignment with global efforts like the Sustainable Development Goals and the Global Biodiversity Framework.

The insights emphasize that it’s no longer enough for brands to simply incorporate more sustainable fiber choices into their materials portfolio. This focus needs to shift to rapidly, looking holistically at risks and returns, and decoupling value creation from new resource extraction. Decisions must be holistic and interconnected if the industry is to turn the corner from exploitative to regenerative and circular models.

“The last few years have taught us that right at the core of everything we do lies the need for humanity and a ‘just transition’ that promotes cultural and intergenerational equity as we transition to a decarbonized, regenerative, and circular economy. Our hope is that the benchmark can capture the learnings and amplify the opportunities to move faster and at scale towards a better world,”  shares Liesl Truscott, Corporate Benchmarking Director at Textile Exchange.

Key report insights

Participating brands are now using 50% more sustainable materials in their portfolio.

For the first time, participating brands are reporting 50% more sustainable materials use in their material portfolios, up from 44% the previous year. Time will tell if this is due to the pandemic, a shift towards preferred, or real progress towards dematerialization.

There are signs of brands decoupling value creation from resource extraction.

The number of companies reporting data on re-commerce grew from six to 13 (out of 114), and there were 0.6 million more items in re-sale in 2020 over 2019. The transition to a circular system has the potential to unlock huge economic opportunities for brands willing to invest in new ways of doing business.

A decrease in greenhouse gas emissions reflects slower growth, as well as an increase in preferred materials.

Greenhouse gas (GHG) emissions fell by 5% last year, reflecting a saving of 1.9 million tonnes of CO₂ equivalent emissions. This decline is influenced by the “low-growth” 1.3% scenario during the pandemic (compared to a “business as usual” scenario of 3%), as well as from the conversion to preferred materials.

Brands are using more recycled materials, but mostly from non-textile sources.

Brands are using more recycled materials, which now represent 33% of all synthetic fiber use and 12% of material use overall. However, recycled synthetics are predominantly made using plastic packaging waste, and textile-to-textile is needed to close the loop.

More land is under improved practices, but metrics must link to country of origin.

The report now shows over five million hectares of cropland and forestry under improved practices, such as sustainability programs and certification. This is over one million more hectares than last year, but still only 17% of the total land area from which land-based materials were sourced by Index participants in 2020.

Transparency of sourcing regions must improve.

Building on the above, line of sight to sourcing origins is an increasing priority for companies, and tools are advancing rapidly that help. Results suggest that knowledge of country-of-origin hovers around 48% of materials sourced, with sourcing locations dominated by India, China, Turkey, the US, and Pakistan.

The 2021 results mark the end of a three-year cycle, which means the methodology has remained consistent year-on-year, allowing for a clear analysis of how companies are doing against the benchmark framework.

Over the next 18 months, the framework will be under revision, with the goal of increasing ambition, future-fitting, and enhancing the program’s value proposition. Textile Exchange will also be aligning progress tracking more closely with the 2030 Global Goals and working to coordinate with other important disclosure programs.

The organization aims to build a stronger emphasis on tracking progress towards impacts aligned with its Climate+ goal of a 45% reduction in the greenhouse gas emissions from the production of fibers and raw materials, in line with our three core impact levers: materials, innovation and degrowth.

Photo: Textile Exchange