Fashion Brands Are Going “Carbon Neutral”—But What Does That Mean?

Canadian fashion brands like Aritzia and Aldo have recently made statements about going "carbon neutral," following the lead of international brands that have been using carbon offsets for years. But are offsets even effective toward curbing climate change?

If the most sustainable garment is one that’s already in your closet, then that garment for me is a classic oversized black wool and cashmere Wilfred coat from Aritzia. I bought it in 2010 and it was one of those special finds amongst the final dregs of their trademarked Snooze You Lose sale. The coat is trimmed with suede, its fabric is sourced from Italy, and it has a label that proudly declares it was made in Canada. Aside from having to sew up holes in the pockets and repair the felt undercollar once or twice, this coat has persisted over the past decade, enduring near-daily wear, three major moves across time zones, and the barrage of trends that have since come and gone.

Though my coat has more or less stayed the same, the fashion landscape unfortunately has not. Today, the apparel industry produces twice as much as it did in 2010, and meanwhile consumers have decreased the number of times they wear a garment before discarding it. According to the UN Environment Programme, the fashion industry, valued at US$2.5 trillion, is the second-highest user of water worldwide, is responsible for 8–10% of the world’s greenhouse gas (GHG) emissions, and is a significant accelerant of global warming. (For context, fashion’s emissions are four to five times more than the aviation industry.) All the while, we’re inching toward irreversible climate change.

According to a study done by the Global Fashion Agenda and McKinsey & Company, if the fashion industry wants to comply with the recommendations set by the Intergovernmental Panel on Climate Change to keep global warming below a 1.5℃ threshold, it’s going to have to reduce emissions by at least 50%. One strategy brands are using to address this challenge is investing in carbon credits and offsets. Just last month, in fact, Aritzia posted a sustainability update on its social channels declaring that the company is “officially carbon neutral,” explaining that it is “accounting for 100% of the carbon [it] emits through [its] offices, stores and distribution centres,” and is offsetting them by purchasing Renewable Energy Credits (RECs) and investing in Verified Carbon Standard (VCS) certified carbon offsets. 

 

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While perhaps one of the firsts to call itself carbon neutral, Aritzia isn’t the only Canadian brand making public statements about using carbon offsets. Aldo since announced that the shoe brand is now “climate neutral” in part by using RECs. Canada Goose has committed to reaching net-zero emissions by 2025 by offsetting 200% of its carbon footprint as part of a bigger “Sustainable Impact Strategy” that also includes measures like using reclaimed fur and responsible down. And Lululemon is giving itself until 2030 to reach 60% absolute reduction of emissions. It’s all part of a welcome trend that’s been happening worldwide: Global brands like Ganni and Eileen Fisher have been using offsets for a few years now.  

And, yes, it’s heartening to see progress, but in a lot of cases it’s actually not super clear what this progress really is. Reading through some of the comments on Aritzia’s sustainability post, it seems that while some customers are impressed, many are seeking more transparency and accountability in their sustainability effort. Instagram user @kaitmonfils wrote, “So incredible! Glad to see Aritzia making the step. Another reason why I love your brand,” while @e.fulsom asked, “Does this include manufacturing and supply chains? the wording is a bit misleading.” Another user, @rozannestp commented, “This is a great step, however buying carbon credits without truly changing the way you operate isn’t really being sustainable… There’s so much more to this.”

Responding to the feedback, Aritzia’s VP of sustainability, Rebecca Loyo Mayo commented, “[T]he feedback gave us great insights into how keen our followers and others are to hear more about our supply chain and product work.” She added, “[W]e’ll definitely endeavour to share more of the work and initiatives we already have in place with our supply chain to reduce our scope 3 emissions … and there’s more to come.” 

Given how savvy customers have become, it is unsurprising that studies such as this one in the UK by Compare Ethics found that only one in five shoppers trust the sustainability claims made by brands. And consumers are right to be suspicious, because there are many challenges to whether carbon offsets can actually be effective. As more of us are trying to make better environmental choices in regards to our closets, understanding the sustainability terms used by companies can help consumers differentiate between a step towards environmental progress or an exercise in greenwashing. 

What exactly are carbon offsets and how do they work?

The GHG Protocol, an international framework for businesses and governments to understand and quantify greenhouse gas emissions, has categorized emissions into three groups or “scopes.” Aritzia, and many brands like it, is only accounting for what’s called Scope 1 and Scope 2 of its carbon footprint, which is the carbon emitted from its corporate operations. Notably absent from this calculation is Scope 3, the carbon emitted from the supply chain, production and transport of Aritzia’s 12 in-house brands, which make up 95% of its net revenue. (Last year that number was $874 million.) Similarly, Scope 1 and 2 often only make up a fraction of a company’s GHG emission total. For example, for Kering, the French luxury group that houses brands like Gucci, Bottega Veneta and Balenciaga, Scope 1 and 2 account for less than 10% of its portfolio’s footprint. To be truly considered carbon neutral, a brand needs to account for all three scopes.

In addition to how widely across a business they are applied, there are three main factors that can determine the efficacy of carbon offsets: additionality, permanence and verification. “Additionality” refers to the idea that for an offset to count, it must be additional to any environmental scheme that already exists, which means that without the investment from a brand, the project would not have been able to move forward, thus ensuring there is an actual need for their contribution. “Permanence” means that any carbon project sequestered must remain sequestered. An example of where this comes into play is with tree planting projects—a brand can’t pay for a forest to be planted only for it to be cut down years later. Finally, “verification” means that the offset project must be verifiable by an independent third party, to ensure that the project actually happened and was accounted for. Without proper planning and accounting of additionality, permanence and verification, these carbon offset projects can leave the planet worse off, begging the question if offsets are more of a distraction than a meaningful pursuit.

Another common criticism of carbon offsets likens them to the indulgences the wealthy would pay the Catholic Church in the Middle Ages to atone for their sins. It seems inadequate to solve a complex problem like climate change simply by paying for it, even if it is to fund projects that might create some impact. Keith Brooks, Programs Director at Environmental Defence Canada, describes it as a form of “conscience cleansing.” He explains that the alternative and more effective route to addressing climate change would be to do the work of getting at the source. “What we need to do most of all to get to net-zero is not only planting trees but reducing our emissions. That means getting off of fossil fuels. It means engaging with the supply chain,” Brooks recommends. “And [making] sure that the production of the material that goes into your final product is done sustainably and that it is as low-carbon as possible.”

How can fashion brands better use carbon offsets?

When fashion brands use carbon offsets as a sole strategy to mitigating their carbon footprint, it deflects the focus from what they should actually be doing, which is reforming supply chain processes and making manufacturing more sustainable, rather than simply passing on the responsibility of removing carbon from the atmosphere to a third party. That said, carbon offsets can certainly be part of a more comprehensive sustainability strategy—and a precursor to that more impactful change.

James Tansey, the executive director of the Centre for Social Innovation & Impact Investing at the University of British Columbia Sauder School of Business and a co-founder of Offsetters, a sustainability and carbon management solution business that has worked with Lululemon, proposes an approach that considers the total lifecycle of a garment to achieving carbon neutrality. This means that when assessing the total footprint of a cotton tee, for example, we don’t just look at emissions from the production of the cotton, the production of the fabric, the manufacturing of the tee and then the transportation and distribution of that tee. We also take into consideration the consumer’s use of the tee which includes its care, such as the washing of the garment, and then how it is disposed of or recycled. This has an enormous impact: A study by Levi’s found that the consumer’s use phase in a pair of jean’s life cycle can amount to almost 40% of the garment’s total emissions. “When we worked with Lululemon in the past, one of their arguments was that they build higher quality products that are more durable and so you have to replace them less often. Fjallraven does that as well—producing for durability. Getting away from fast fashion, which is basically disposable items, makes a big difference. Finding companies that are innovating in looking at their supply chains and reducing their footprint there and making it a part of their story.”

Knowing that certain garments and products are harder on the environment than others, some brands are being more thoughtful and targeted with how they are using offsets, implementing them to account for the emissions of specific product lines. Everlane, for example, has created a new sneaker called Tread that is carbon neutral through the use of offsets. Kim Smith, Everlane’s chief supply chain officer, says that sneakers in general “have one of the heaviest footprints, requiring tons of energy, are made largely from plastic, and are impossible to dispose [of]—meaning they end up largely in landfills.” She explains that the carbon offsets the company uses support cattle ranchers in improving grazing practices on American grasslands— “which leads to better soil health, cleaner waterways and more carbon sequestration. Healthy grasslands pull an enormous amount of carbon from the air.” 

Footwear and apparel company Allbirds positions using carbon offsets as an essential aspect of a three-part sustainability strategy: measuring product emissions from their raw materials to their end of life, reducing their impact by making more environmentally friendly choices such as using natural or recycled materials, and offsetting the emissions that are left after that. Hana Kajimura, who leads sustainability at Allbirds, says each aspect of the three-part strategy are equally important and, in particular, offsets act as a motivation to reduce their emissions. “The carbon credits portion often gets overlooked or put on the back burner until some distant date of 2030 or 2050 when the actual neutrality commitment begins. But for us, it is incredibly important that on this journey towards reducing our footprint to zero we are accountable to our footprint today.” She adds, “If we pay for it, we’re essentially incentivizing ourselves to reduce even faster.” Already third-party verified by Climate Neutral, a non-profit that works with brands to help them measure their footprint, Allbirds says its greatest goal is to emit no carbon in the first place. 

Reformation is going one step further by getting their customers involved. The L.A.-based company, which markets itself as a sustainable fast fashion brand, has created an option for customers to buy climate credits like any other product on their site—kind of a more accessible version of the premium add-ons from airlines. Kathleen Talbot, Reformation’s chief sustainability officer and VP of operations explains that the option has received a good response but knows it’s not going to be *the* change that’s required to address climate breakdown. Instead, it’s a little “extra” that the brand is doing in hopes to educate its customers. “How it helps again start the conversation, lead to education, and then lead to that incremental action has been really good for us.” She added this option isn’t about customers taking on the onus to reduce the company’s emissions—in fact, the brand announced in December that it will be “climate positive” by 2025 by investing in solutions that have a net positive impact—but rather it’s about encouraging and normalizing a sustainable lifestyle for customers. “For Ref, we already are committed to carbon neutrality, so we’re calculating our product footprint but also our entire brand’s operations footprint and offsetting it already. So we’re not asking the customer for help to do that. We got you, behind the scenes.”

Thinking beyond offsets

Carbon credits and offsets are not the only way that the fashion industry has responded to both the climate crisis and the growing consumer demand for more sustainable practices. Gucci became the first fashion label to earn an ISO 20121 certification for its first carbon neutral fashion show last year, leading the luxury market to make more public and transparent commitments to the environment and sustainability. There’s also been an influx of sustainable fabric innovation such as lab-grown leather and recycled materials, and brands such as Adidas and Stella McCartney have joined forces to back Mylo, a new leather made from mushrooms by Bolt Threads. In addition, the resale market, which will hit $64 billion USD in the next five years, is booming with brands like Levi’s launching SecondHand, a program where customers can buy pre-loved Levi’s and exchange their old pairs, which are then cleaned, repaired and resold, for credit, creating a micro-circular economy focused on sustainable fashion. 

It is clear that the fashion industry is beginning to respond to climate change in innovative ways, but will it be enough to avoid climate catastrophe? While we know we have about a decade before we cross the rubicon of irreversible climate change, Canada is feeling the devastating effects of it already, including food supply depletion and drinkable water shortages within First Nations communities and increased frequency of wildfires in British Columbia and Alberta. Globally, studies have shown that the world’s most disadvantaged are also the most vulnerable to health risks associated with climate change, and this applies especially to women and children. 

When it comes to assessing the moves brands are making towards sustainability, as consumers the very least we can do is acquaint ourselves with the terminology and feel comfortable with asking questions and demanding more transparency, holding brands accountable when they award themselves labels like “carbon neutral” or “climate neutral.” Companies know that they can benefit greatly from marketing themselves as environmentally-friendly to customers who are increasingly embracing sustainable lifestyles, so it’s critical that we learn to distinguish between when brands are authentically green or just performatively green. So when a brand announces a new environmentally conscious move, intervene, ask questions and demand more from businesses who benefit from the “green sheen.”

As the cold weather hits and I’m pulling my trusty old Artizia coat back out for another season, I’m suddenly struck by the poignancy of the name of the sale I bought it in: Snooze You Lose. While I didn’t know it then, it’s impossible to avoid any longer: If brands and consumers keep hitting snooze on real sustainability, we’re all going to lose much more than we can afford.