Search this website. You can use fund codes to locate specific funds

Fixing Fast Fashion

EOS publishes new white paper on the environmental impact of fast fashion

Fast reading

  • The fast fashion business model is inherently unsustainable due to its environmental impact
  • This paper sets out our expectations for companies to manage this impact
  • Identifies key performance metrics such as carbon emissions and water use per unit of production

The detrimental environmental impact of the fast fashion take-make-dispose model means it is inherently unsustainable and companies must adopt more circular approaches. In this paper, we look at how the industry will need to employ technical innovation in resource efficiency and recycling, as part of a shift towards circularity-driven value creation for customers.

It is also in the interest of investors to encourage apparel companies to improve the management of their environmental impacts and move to more circular consumption models. Changing consumer perceptions and the high probability that emerging regulations will impact profitability suggest that apparel companies should invest in more sustainable fibres and production processes, for example.

We have found that the maturity of approaches varies widely in the apparel sector. Some companies display very limited awareness of the need to reduce their environmental impact, while others have incorporated the ambition of circularity into their strategic decision-making. For example, Adidas has set a target that nine out of 10 of its articles will be sustainable by 2025 as part of its new growth strategy, presented in March 20211.

Ultimately, it is the actual performance of companies and their products in terms of their environmental impact that matters. Some of the key performance metrics that we have identified include carbon emissions and water use per unit of production. With improved disclosure, investors will be able to compare companies’ performance on a per unit or per sales basis.

It is also critical to see reporting on circular innovations such as the proportion of recycled materials inputted, the roll out of take-back schemes and consumer education on recycling, and the proportion of investment committed to circular innovation.

  1. 1 Adidas Press Release (10 March 2021) adidas presents growth strategy ‘Own the Game’ until 2025, adidas (adidas-group.com)

Related Insights

Votes for change
This year we saw a number of companies offering shareholders a vote on their climate transition plans, including some in the oil and gas, construction, aviation, and consumer goods sectors.
Salary or sick leave – the impossible choice
In the United States, the lack of national paid family and medical leave policies underpins many difficult, often impossible, choices faced by disproportionately impacted worker populations.
Siemens Energy case study
Siemens Energy is addressing the challenges of the climate transition by setting science-based emissions reduction targets.
A watershed for climate change stewardship?
Mainstream sentiment has shifted, and the momentum is with investors calling for faster action on climate change.
Abate and switch: steel seeks low carbon solutions
Steel is considered a hard-to-abate sector, but national net-zero commitments and pressure from customers mean that solutions must be found to help drive down emissions.
Nature’s larder – why food producers must safeguard biodiversity
As many of the risks associated with the decline of nature are concentrated in the agricultural supply chain, it is imperative that companies develop a comprehensive understanding of how biodiversity underpins their business model.

EOS Client Service and Business Development

Amy D’Eugenio,
Head of Client Service and Business Development, EOS