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After a quiet two years, the Fashion Pact is making moves. The cross-industry CEO-led coalition launched by French president Emmanuel Macron in 2019 and helmed by Kering chairman and CEO François-Henri Pinault has doubled its membership and is rolling out a pipeline of new initiatives to accelerate the industry’s work on the environment.
The first of those initiatives, announced today, is a Collective Virtual Power Purchase Agreement (CVPPA) aimed at expanding renewable energy use in Europe. The initiative is meant to add new renewable energy capacity to the grid in the immediate future, as well as kickstart a larger energy transition throughout the fashion industry.
“It’s a proof of concept. It’s important by itself, but it's just the beginning,” Pinault tells Vogue Business. “We needed to have results to show that collective action is possible. We will enlarge it — already we have a few players from outside the Fashion Pact that are interested to join — and also we will move it to other geographies. We need to use it to accelerate, and to expand and scale, but it’s important to show that it’s working.”
The Fashion Pact was launched at the G7 Summit in France in 2019, and is a voluntary agreement by signatory brands to implement Science Based Targets for both climate and nature (biodiversity), achieve net zero emissions by 2050 and to reduce their impacts on the world’s oceans. The CVPPA builds on that, as a long-term agreement between fashion brands and energy and technical consultancy firms Guidehouse and 2050 aimed at accelerating the expansion of renewable energy generation. Under the agreement, the CEOs of 12 fashion companies — Capri Holdings, Farfetch, Ferragamo, Kering, Prada, PVH Corp, Ralph Lauren, Bally, Tapestry, Under Armour, Zegna and Zimmermann — have committed to procuring renewable electricity, and Guidehouse will advise on the best-suited developer to build the capacity to supply that demand. The goal is to add more than 100,000 MWh per year of wind or solar power generation to the grid in Europe.
Ultimately, that will account for barely a dent in the industry’s total energy use — and carbon emissions — because the majority of its footprint is generated by raw material production and manufacturing, most of which takes place outside of Europe, but the idea is to showcase a model that can be replicated elsewhere.
“We’ve been silent, but there has been a lot going on in the background. We’ve identified key areas where we want to have the industry aligned — biodiversity, climate and oceans — and on those, we defined an approach on how we can actually work together to make a difference on the ground,” says Eva von Alvensleben, executive director sustainability and secretary general at the Fashion Pact. “The CVPPA is one of those projects.”
“Renewable energy sourcing is one of the basic tenets of any company strategy around climate change mitigation and is something we are committed to at Farfetch,” says Farfetch founder, chairman and CEO José Neves. In the future, he hopes to be able to work with the Fashion Pact to pilot carbon reduction strategies that can be adopted and scaled by the whole industry.
Organisers and participating executives say the fact that the Fashion Pact is led by top executives gives it the greatest chance of overcoming the financial, logistical and legal or regulatory hurdles that may be involved. “We know that joint efforts and funding are critical to driving scalable solutions. The CVPPA is the first time the fashion sector has come together in a collective effort to add capacity to the renewable energy grid and secure a renewable electricity volume load to drive progress against our renewable electricity target,” says Stefan Larsson, CEO of Calvin Klein and Tommy Hilfiger parent PVH.
“It looks simple, but it has involved legal constraints, financial constraints. At the company level, you have people from the sustainability teams, legal teams, financial teams. If the Fashion Pact was not led by CEOs, we would not be able to announce it today,” says Pinault. “It has to be CEOs, to make sure that we can push on our own organisations to make things happen.”
What the Fashion Pact is able to accomplish, then, will depend on what the executives are willing to take on. It has no legal weight behind it — and critics are increasingly vocal that voluntary initiatives are ineffective in cleaning up the industry, saying that policy is what’s needed. The initiative has also been accused of being too Euro-centric, a claim that in 2020, co-chair Paul Polman did not dispute, according to Forbes, which suggested that’s a reflection “of their starting point, not their final goal”. (The fact that the CVPPA is being piloted in Europe might not do much to change that perception, but von Alvensleben and Pinault say it was the most practical choice to be able to show results relatively quickly and successfully, and that the plan is to expand elsewhere as soon as possible.)
Expanding to other geographies, however — particularly in less-developed countries, where most of fashion’s sourcing and manufacturing take place — will be a complicated task. Given the different states of infrastructure readiness, technical and financial capacity and regulatory environments across different regions, it’s not clear that a CVPPA model that succeeds in Europe will be applicable in Bangladesh, China or Ethiopia.
Also on Pinault’s mind is the need to reduce his company’s — and the industry’s — total emissions, not just the emissions intensity associated with each product it makes (which Kering did make breakthrough progress on last year, he notes, reducing emissions intensity by 11 per cent). Although he doesn’t shy away from the question; he also doesn’t have a clear answer for how Kering will address it.
“It’s a big challenge, but it’s the only real and important challenge in front of us,” he says. “We have an executive committee meeting in December fully dedicated to that — how do we change our targets from intensity to absolute terms? What do we need to focus on, where are the priorities in the supply chain to make sure that despite the growth, we are not increasing our footprint in absolute terms.”
Unpacking the Fashion Pact’s ambitions
The Fashion Pact is making plans beyond launching the CVPPA. It has another project under the climate pillar, says von Alvensleben, dedicated to expanding the supply of regeneratively-grown raw materials. “The challenge in our supply chain currently is that we just don't have the supply for those raw materials, even if we would like to increase them beyond capsule collections. I think the current supply of organic cotton is 3 per cent of the total supply, which is absolutely not enough,” she says.
The coalition has brought more than 20 brands together so far to establish a system both to help farmers to transition to regenerative, organic practices and to develop a methodology to account for the carbon credits resulting from those efforts. “It's one of the key topics we want to tackle in the climate pillar, next to renewable energy — the uptake and increase of supply of regenerative and more sustainable raw materials.”
Under the oceans pillar, key efforts include one focused on replacing the plastic polybag, and another on wet processing, which a Fashion Pact-commissioned scientific analysis identified to be the greatest source of the fashion industry’s impacts on oceans. According to von Alvensleben, the project is working with suppliers to adopt more sustainable techniques or alternatives to conventional methods.
The third pillar, biodiversity, is a topic that has been largely ignored by fashion despite its widespread and long-term impacts on the world’s ecosystems. “It’s the first time that a coalition like ours has put biodiversity so high on the agenda. It’s a topic where the industry’s not very advanced yet,” says von Alvensleben.
A report by the World Benchmarking Alliance published on Monday concludes the same thing: only five per cent of 400 companies analysed (in fashion and other sectors) have carried out a science-based assessment to understand how their operations impact biodiversity — and while half of those companies are working to reduce their emissions, only 14 per cent of them indicate whether those efforts are in or near areas of high ecological value. Fewer than 13 per cent have a clear commitment to adhere to Indigenous peoples’ rights, the report also finds, which is widely recognised as the most important and effective means of preserving global biodiversity.
The Fashion Pact has a $2 million grant from the Global Environment Facility — co-executed with Conservation International — “to help us help the fashion industry to move forward on the topic of biodiversity”, says von Alvensleben. “We develop science-based tools to empower fashion businesses to rethink their relationship with nature.” The Fashion Pact is also piloting Textile Exchange’s Biodiversity Benchmark and has developed the Biodiversity Strategy Tool Navigator — “an interactive website created to guide fashion brands through the various stages of developing a biodiversity strategy aligned with the Science-Based Target Network”.
Pinault, who will be replaced as Fashion Pact president next year — the bylaws dictate the position is a three-year term — says that Kering will remain “very, very strongly” involved in the coalition. The industry doesn’t have all the answers yet, but he says that’s in part because it hasn’t been looking — and now that it is, he’s confident the sector can transform for the better.
“Sustainability is a question that was not asked before, so of course we didn’t have the answers,” he says. “As soon as you ask yourself the right questions, you will find solutions.”
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Correction: The Fashion Pact aims to achieve net zero emissions by 2050, not 2030 as previously reported. (8 December 2022)
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