Background
Associated British Foods (ABF) engages in the business of manufacturing and trading of consumer goods. One of its businesses, Primark, is among Europe’s largest clothing retail companies and accounts for almost half of ABF’s turnover. Historically, Primark clothing had a reputation for low cost and bulk provision of clothing with a limited lifetime and was not renowned for a focus on sustainability.
We asked the company to make clear commitments to demonstrate its ambition to be more sustainable.
Details of engagement
In 2019, we shifted our engagement with the company to focus particularly on three aspects of sustainability: making its new cotton more sustainable (eg using less water, using fewer chemical fertilisers and pesticides which helps improve soil health), using more recycled materials in its products, and improving recycling of unwanted clothing.
We asked the company to make clear commitments to demonstrate its ambition to be seen as more sustainable. In response, the company stressed that it had a long-term aspiration to increase the proportion of sustainable cotton in all of its products.
By 2021, around 20% of cotton currently came from its dedicated sustainable cotton programme working with smallholder farmers, doubling from the previous year. We continued to urge the company to set clear, time-bound targets to increase the proportion of sustainable cotton used in its products. In addition, the company set a target to introduce regenerative agricultural practices in its sustainable cotton programme by 2030.
We continued to urge the company to set clear, time-bound targets to increase the proportion of sustainable cotton used in its products.
We maintained engagement momentum across 2022 to 2024 where the company made promising progress. One notable moment was a live engagement at the EOS March 2023 Client Advisory Council with the group corporate responsibility director, EOS and investors on the progress of its cotton programme and targets.
In correspondence with ABF in 2024, we asked for a meeting to review progress against its sustainable cotton commitment and its recycling programme. We asked for clarity around the target for sustainable cotton and sustainable clothing, as we were concerned that stakeholders needed to understand how the company was defining its targets as sustainable and were concerned about potential green-washing. The company confirmed it had published a glossary on its website which defined what the company meant by sustainable for each element.
Changes at the company
After continued encouragement to scale its sustainable cotton programme, the company set targets for the proportion of sustainable cotton in its clothing. We were pleased to hear from the company that the vast majority of the cotton it considers sustainable will be from its sustainable cotton programme, where the company sees positive social impacts on the 300,000 farmers who have taken part.
We also discussed technology and opportunity for recycled cotton, where the company was running a pilot in Bangladesh.
In addition, the company confirmed its target that all its clothes would be made from recycled or sustainably sourced materials by 2030 and published clear descriptions indicating the percentage of recycled, sustainable or organic material needed in each product to meets its definition of being sustainable (generally at least 50%).
We also discussed technology and opportunity for recycled cotton, where the company was running a pilot in Bangladesh.
At a review of progress against targets in April 2024, the company confirmed that in 2023 it had made good progress towards its 2027 goal, with 46% of clothing sold meeting the company’s definition of sustainable, up from 40% in 2022 and 27% since the launch of the programme 10 years ago.
We will continue to monitor the company’s progress in meeting its sustainable cotton targets and its overall commitment to have all its clothes made from recycled, or sustainably sourced materials by 2030.
