Burberry’s Stricter Climate-Change Target Puts Suppliers in the Spotlight

17 June 2021 by Grace Coleman
blog author

​Liam Goldsworthy, Senior Consultant- Sustainability at Acre, sat down with the Wall Street Journal to discuss supply chain climate emissions in luxury vs fast fashion. You can find the full article below, or at the original source on the Wall Street Journal Website.

Luxury brand aims to nearly halve carbon-dioxide emissions across its supply chain in the next decade, tightening previous goal of a 30% drop

Written By Maitane Sardon

Burberry Group PLC’s tougher target for cutting its carbon-dioxide emissions hinges on getting its suppliers to change their behavior, too.

On Thursday, the U.K. fashion house known for its trademark tartan print said that by 2030, it plans to cut emissions of greenhouse gas across its supply chain by 46%, steeper than its previous goal of 30%.

Part of that would involve changing things directly under the company’s control, such as how its offices and stores are powered. Pam Batty, Burberry’s vice president of corporate responsibility, said the brand is on track to be carbon-neutral in its own operations by 2022, thanks to measures such as improving energy efficiency and switching to renewable electricity.

But emission-cut programs that encompass companies’ suppliers are harder to track. In the fashion industry, supply chains span various countries and sectors from textile mills to cattle ranches.

“Most apparel supply chains are genuinely very complicated,” says Victoria Kalb, ESG and sustainability analyst at Swiss bank UBS Group AG. “When you add in multiple countries, when you add in more layers, when you add in more complicated processes, it adds complexity…and it’s going to be more difficult to measure your emissions”.

Burberry says its progress toward its target will be verified by Science Based Targets, an organisation that vets companies’ emissions-reduction plans.

“Addressing emissions across our extended supply chain relies on everyone across the fashion value chain going on a journey together at the same pace,” Ms. Batty said.

Burberry said it would work with suppliers to help them transition to renewable energy and reduce the amount of power they use. In September, it listed a £300 million, or roughly $424 million, bond to finance sustainable projects.

Ms. Batty said a major challenge will be finding high-quality projects that contribute to Burberry’s environmental goals in a way that aligns with scientists’ recommendations for effective emission cuts. Among the company’s initiatives is a project aimed at helping wool producers in Australia implement agricultural practices that don’t harm the land, she said.

She declined to give more details about what Burberry will ask suppliers to do.

Fashion brands are under pressure to meet the expectations of consumers and investors who are increasingly environmentally conscious. Burberry’s reputation took a knock in 2018, when it was pilloried for burning about $37 million worth of unsold goods, a move fashion houses make to maintain the exclusivity of their brands. After the scandal, Burberry pledged to abandon the practice.

The company lists climate change as a principal risk in its 2020 annual report, saying “the success of our business over the long term will depend on the social and environmental sustainability of our operations.”

Guillaume Leglise, a credit analyst at Moody’s Investors Service, said in a note in April that large international brands might find it easier to make the investments required to decarbonise, while small brands hit by the coronavirus pandemic could struggle to adapt.

Other fashion companies have committed to cutting their emissions. Several, including Adidas AG and Gucci owner Kering SA, have targets that encompass their supply chains.

Liam Goldsworthy, a sustainability consultant at London-based recruiter Acre, said achieving deep, supply-chain-wide emission cuts could be easier for high-end fashion houses than fast-fashion companies, which operate in places with less stringent regulations where collecting emissions data is challenging.

Burberry doesn’t spell out in detail which places it relies on most to source its materials. A corporate-responsibility disclosure on its website says its products are sourced from the company’s manufacturing sites in Italy and the U.K., and “via a network of global suppliers, a large proportion of which are in Europe.”