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Water is used throughout fashion’s supply chain, from raw material production to dyeing fabrics to washing garments. But the industry is lagging when it comes to disclosing — or mitigating — its water impact.
An overwhelming majority (90 per cent) of fashion brands do not disclose any water-related risks in their documentations, according to a new report from Planet Tracker, “Exposing Water Risk”, which features data from the top 29 major apparel brands (selected by adjusted revenue). Of those 29 brands, 15 report on water usage to non-profit disclosure system CDP, but not water risks, and the findings note this is merely a starting point. It argues that the real problem is that most companies lack a robust approach to water-risk disclosure and do not focus on enough metrics.
Although, the report only looks at disclosure, making room for limitations. “It could be that a brand is doing a lot, but not talking about it,” Richard Wielechowski, head of the textiles programme at Planet Tracker, says. “We would miss this in our analysis. However, in general, we feel that the level of disclosure is probably a good proxy for how important water focus is to a brand’s sustainability and risk-management efforts.”
Kering, VF Corp, Gap and Hanesbrands are cited as having the highest levels of water disclosure; yet the authors clarify that the number of disclosures doesn’t necessarily equate to “quality”.
It all points to the same conclusion: “Fashion is failing to address its water impact appropriately,” Wielechowski says. “More and more brands are reporting their greenhouse gas emissions for their owned activities and also Scope Three. We need to see a similar attitude to water impact.”
Across the board, Planet Tracker reports a low level of strong (referenced as high quality) disclosures. While disclosure is still very low, progress is inching forwards. The mention of water-related risks increased from around 2,000 in 2018 to 9,000 in 2022, implying that it’s being discussed more frequently.
Fashion’s failure to address its water impact — which has been documented for years now, and persists despite an escalating global water crisis that’s impacting fashion’s supply chain — creates a risk to brands and investors, says Wielechowski. “Too many brands appear to barely mention water as a risk and we are a long way from the sort of disclosure and transition plans we would like to see the industry making if it is to take ownership of its impacts,” he says.
The data for the report was gathered using natural language processing, analysing 3,900 documents, transcripts, sustainability reports and filings from each company. Where there was disclosure, it was in sustainability reports and annual reports rather than at corporate events, which Planet Tracker says suggests a lack of focus from investors. Europe and North America had similar levels of disclosure, while Asia lagged.
Water is becoming an increasingly scarce resource as climate change and industrial pollution renders many sources unuseable. Fashion manufacturing countries consistently report that the harmful dyes and chemicals used by fashion companies are leaking into their water sources, causing illnesses and birth deformities. Water is also essential to grow natural fibres, cotton being particularly resource-dependent.
The highest level of water-related risk disclosures was found in non-luxury brands, but the sample for luxury brands is around half the size of the sample for non-luxury brands, Wielechowski flags. What’s more, there is huge variation between all brands, whether they’re in the luxury category or not. “We would draw more focus to the fact that too many brands continue to barely mention water, be they luxury on non-luxury players,” he says.
The reasons for this lack of disclosure are similar to the barriers for emissions reporting and supply chain disclosure — but Wielechowski argues that if the market (or investor) signals were being sent to disclose water-related impacts, brands would be responding. “It takes time and effort to gather data [across all three topics], so brands have only stepped up as pressure has built to provide full details of their emissions and how they will reduce them. There is a relative lack of focus on water impacts and reporting compared to greenhouse gases, so it has slipped down their focus list,” says Wielechowski.
Planet Tracker hopes brands will start to follow similar reporting habits for water as they do for greenhouse gases, using standardised frameworks such as the CDP and reporting up to Scope 3. The organisation also urges investors to put a greater focus on water use and pollution in their investment strategies.
Water consumption is the most common category for disclosure, while toxins and contaminants received minimal attention. Water consumption is important for fashion brands to take stock of, Wielechowski says, but an adequate water plan would look at a comprehensive set of metrics and account for fashion’s full impacts on water, which range from nutrient pollution and aquatic dead zones near agriculture sites to the chemical pollution of waterways near dyehouses and leather tanneries. “Consumption is a good starting point, but not the whole story,” says Wielechowski. “Using less water is good, but if what you use is heavily polluted and just pumped out into the environment, it is a long way from sustainable practice.”
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