The apparel and textile industry puts high pressure on global environmental resources due to the growing volume of garments produced and associated demands for fiber production. This high impact intensity framework covers companies involved in the production of fibers and other materials such as leather, their transformation into apparel including footwear, other textile products or accessories and the related supply chain and retail activities.
It is important to note that from a lifecycle perspective, the greatest climate change impact for this sector stems from products’ use phase: washing clothes consumes a significant amount of electricity, and generates wastewater pollution. This use phase represents on average more than 50% of a tee-shirt’s lifecycle impact on climate change . Because companies have little or no room to influence use phase, these impacts are not included in this assessment.
However, the sector relies on a wide variety of materials to manufacture final products, including both bio-sourced and synthetic fibers, so environmental impacts vary. Moreover, the scale of the environmental issues is multiplying in volume as “fast fashion” trends lead to shorter clothing use phases and sharp increases in production volumes.
The production of textile fibers, especially cotton, is a source of significant global environmental impacts. While occupying only 2.4% of agricultural land, cotton production accounts for 24% and 11% respectively of global insecticide and pesticide sales. Conventional cotton agriculture consumes massive quantities of water (average of 4000 liters consumed/kilo produced ).
How the NEC measures the impacts for the Apparel & Textile sector
The Sustainable Apparel Coalition’s textile fiber database (Materials Sustainability Index, MSI) reflects the diversity of these environmental impacts, with a single environmental impact score for each fiber type. The score aggregates each fiber’s impact on global warming, eutrophication, water scarcity, fossil fuel resource depletion and chemical usage. This database is used to calculate an aggregated fiber environmental impact score at both the product and company level in order to reflect impacts generated by textile fiber production. Assessments are performed separately for clothing, household textiles and footwear. The following chart shows the resulting fiber NEC component.
Another crucial parameter of the apparel industry’s environmental impacts are products’ life expectancy. This parameter can influence companies’ value chain impacts negatively, by promoting more versatile fashion trends with continually renewed collections (“fast fashion” effect), or positively, by offering services that lessen consumer renewal needs (such as long-lasting warranty or repair services). These elements are evaluated in the business practices NEC component.
Based on fibers’ Higg Index, several environmental performance indicators are considered for apparel & textile impact assessment. The environmental issues included in the Higg Index are: + Climate (expressed in kgCO2e/kg of fiber)
+Water (through water eutrophication and water scarcity) + Ecosystems (through water eutrophication) + Resources (through abiotic resources depletion)
A corrective factor has been applied to standard fibers with a low Higg Index (such as Polyester), to reflect the waste issue (plastic leakage and microfiber pollution for instance). This corrected rating provides the fiber NEC component.
In brief, the NEC is calculated by adding the two components reflecting: + Fiber impact based on a corrected Higg Index score; + Business practices with qualitative assessment of product lifespan management via “fast fashion”, warranty, repair policies, etc.
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WHAT IS THE NEC METRIC?
Designed to inform and empower investment decision makers, it uses physical data from across the whole value chain to provide a snapshot of an activity’s net environmental contribution and it can be applied at a company, portfolio, index or product/source level.
The NEC evaluates the impact of economic activities based on environmental issues including climate change, water and biodiversity impacts.
Discover how the tool can be used by investors and corporates.