IMPACT LABS INSIGHTS

Fashion’s Carbon Story: Promises vs. Progress

by Amy Qian, Mariana Pinto

January 14, 2026

As sustainability claims proliferate across fashion labels, the industry’s sourcing strategies and value-chain actions reveal a more uneven reality. This article examines where environmental commitments reflect genuine progress and where they fall short of the systems required to support them.

The New Era

The fashion industry is entering a more constrained, regulated, and efficiency-driven era, where scale, data, durability, and compliance matter more than rapid trend cycles or sustainability storytelling.

In recent years, the fashion industry has become fluent in the language of environmental responsibility. Labels promise lower impact, brands publish climate targets, and sourcing narratives increasingly emphasize recycled materials, preferred fibers, and circular ambitions. To consumers and investors alike, these commitments suggest an industry in the midst of meaningful transformation. Yet beneath the surface, a more complicated picture is emerging, one in which environmental claims often outpace the structural changes required to support them.

As growth slows and costs rise across labor, energy, and logistics, fashion is undergoing a fundamental recalibration. The industry’s focus is shifting from rapid expansion to operational efficiency and risk management. This economic pressure is reshaping sourcing strategies, driving diversification away from single-country dependence and increasing the value placed on speed, resilience, and supply-chain control. While these changes are frequently framed as progress toward sustainability, they are just as often responses to cost volatility and disruption risk, raising questions on how environmental intent and commercial necessity intersect. [1, 2, 3, 4, 5, 6]

At the same time, sustainability itself is no longer confined to branding or selective “green” collections. Stronger regulations around greenwashing, waste, and producer responsibility particularly in the European Union are pushing environmental commitments into the realm of legal and financial accountability. Brands are investing in traceability systems, impact reporting, and value-chain data, but the scope and depth of these efforts vary widely. Ambitious targets are increasingly announced beyond a company’s direct operations, extending into raw material sourcing, manufacturing, and end-of-life management, areas where brands often exert limited control. [7, 8, 9]

Circularity has become a prominent feature of this narrative, promoted as evidence of systemic change. Yet in practice, circular models remain constrained by logistical, economic, and technological barriers. Recycling at scale has proven difficult and costly, prompting a growing emphasis on resale, repair, and durability instead. While these initiatives reflect incremental progress, they also highlight the gap between aspirational frameworks and the realities of implementation. [10, 11, 12]

This article examines that gap. By looking closely at environmental claims, sourcing strategies, and beyond–value chain mitigation commitments, it asks whether the fashion industry’s current actions align with the promises attached to its labels. Rather than measuring intent, the focus here is on evidence: What has actually changed? What remains largely theoretical? And where sustainability commitments risk becoming symbolic rather than transformative?

The Progress Report

To assess whether fashion’s environmental claims hold up, this article examines three interconnected layers: how waste and pollution actually occur, how production and sourcing strategies are changing in response, and how industry commitments measure, and sometimes obscure, real progress.

Circularity & Waste: Where Environmental Impact Physically Materializes

Circularity has become fashion’s go-to response to environmental criticism. Recycled fibres, take-back schemes, and resale platforms now dominate sustainability messaging. Yet recent research suggests that the industry’s waste problem is driven less by a lack of circular initiatives than by the scale and structure of production itself.

Evidence shows that plastic pollution from fashion is dominated by mismanaged synthetic textile waste, not consumer washing alone. A global assessment of synthetic clothing leakage estimates that tens of millions of tonnes of synthetic garments enter waste streams each year, with the largest share of environmental leakage occurring at end of life. These pathways sit largely outside the reach of brand-led recycling or take-back programs. Microfibre pollution, often framed as a laundering issue, reinforces this systemic view. Reviews of fibre shedding show that microplastics are released throughout a garment’s lifecycle and are strongly influenced by fibre choice and textile construction. With synthetic fibers accounting for roughly two-thirds of global fiber production, continued growth in polyester volumes means microplastic emissions remain structurally embedded, regardless of downstream mitigation efforts. [13, 14, 15]

Life Cycle Assessment (LCA) research further challenges the industry’s emphasis on recycling. Across multiple studies, reuse and extended garment lifetimes consistently deliver greater environmental benefits than fibre-to-fibre recycling, particularly when recycling involves energy-intensive processing or results in downcycled materials. In many cases, the environmental gains of recycling depend on whether recycled products actually displace new production, an assumption that is rarely verified. [16, 17, 18]

Policy tools such as Extended Producer Responsibility (EPR) are increasingly cited as evidence of progress. Research shows EPR schemes can improve funding for collection and sorting, but without mechanisms to curb production volumes or incentivize durability, they risk formalizing waste management rather than reducing waste generation. [19]

Taken together, research suggests that fashion’s waste problem is not primarily a failure of circular ideas, but a mismatch between circular ambitions and linear realities. This raises a critical question for evaluating environmental claims: whether circularity in fashion is being pursued as a transformative strategy, or as a compensatory framework that manages the consequences of overproduction without fundamentally challenging it.

Production & Sourcing: Where Brands Say Change Is Happening

If circularity addresses what happens after clothing is sold, sourcing and production are where brands most often claim they are reducing impact at the source. Preferred materials, cleaner processes, and supplier engagement now anchor many sustainability strategies. Yet industry data suggests that improvements in efficiency are being outpaced by continued growth in overall production.

According to industry reporting from Textile Exchange, global fiber production reached approximately 124 million tonnes in 2023, continuing a decades-long upward trend. Synthetic fibers remain dominant, accounting for roughly two-thirds of total fiber output. While brands increasingly emphasize recycled or “preferred” fibers, these materials still represent a relatively small share of total volumes. The result is a sourcing landscape in which incremental material substitutions coexist with expanding absolute demand for raw inputs. [20]

This growth has direct implications for environmental impact. Research linking fiber sourcing to land use and ecological pressure shows that fashion’s material footprint extends well beyond factories and mills. The UNCCD’s Fashion & LAND report connects cotton cultivation, grazing for animal fibers, and wood-based cellulosics to land degradation and biodiversity loss across multiple regions. These impacts are often diffuse, geographically distant, and difficult to trace. Yet they sit upstream of many sustainability claims made at the product level. [21]

Chemical use in textile production presents a similar challenge. Detailed technical assessments from the OECD show that fabric finishing and coating processes involve complex chemical inputs with multiple release pathways into air and water. While regulatory controls and substitution efforts can reduce risks locally, the cumulative environmental burden remains closely tied to production scale. Cleaner chemistry does not eliminate pollution if overall output continues to rise. [22]

Brands frequently frame sourcing diversification and nearshoring as sustainability wins, citing reduced transport emissions, improved oversight, and faster lead times. In practice, these shifts are often driven by cost volatility, supply-chain risk, and geopolitical uncertainty as much as environmental intent. Shorter lead times may reduce overproduction at the margins, but there is limited evidence that sourcing reconfiguration alone delivers absolute reductions in emissions or resource use.

While material efficiency, cleaner processes, and improved oversight can reduce impacts per unit, they do little to counteract the effects of continued growth in fiber production and garment output. As long as sustainability progress is measured primarily in relative terms, percent improvements, preferred material shares, or supplier participation, it risks obscuring the more consequential question: whether the industry’s sourcing model is compatible with meaningful reductions in environmental pressure.

Claims, Commitments & Accountability: Where Narrative Meets Evidence

As environmental scrutiny intensifies, fashion brands have responded with an expanding array of commitments. Net-zero targets, preferred materials pledges, and value-chain mitigation plans now feature prominently in corporate reports and public-facing communications. On paper, the industry appears aligned around climate action. In practice, however, the credibility of these commitments depends less on ambition than on how progress is defined, and what remains outside the frame.

Independent assessments suggest that many fashion decarbonization strategies rely heavily on future material shifts and efficiency gains, rather than on reductions in overall production. Analysis from Carbon Market Watch finds that climate plans across the sector often assume significant emissions savings from recycled or “preferred” fibers, despite uncertainty around scalability, displacement effects, and data quality. In many cases, emissions reductions are projected rather than demonstrated, and near-term progress remains limited. [23]

Industry-led progress reports present a similarly mixed picture. Publications from groups such as Global Fashion Agenda and The Fashion Pact document improvements in renewable energy sourcing, supplier engagement, and reporting coverage. Yet these reports also reveal the limits of voluntary action. Participation varies widely, metrics are not always comparable, and progress is often measured in relative terms, percentages of suppliers engaged or materials classified as preferred, rather than absolute reductions in emissions, resource use, or pollution. [24, 25]

Methodological challenges further complicate the landscape. Guidance from Textile Exchange cautions against the selective use of LCA data in product claims, noting that results can vary significantly depending on assumptions, system boundaries, and data sources. When LCAs are used to support marketing claims without transparent context, they risk overstating environmental benefits while obscuring trade-offs elsewhere in the value chain. [26]

Evidence suggests that fashion’s environmental claims are not empty, but they are often incomplete. The challenge, moving forward, is not a lack of pledges, but whether commitments can be reconciled with the scale, speed, and volume at which the industry continues to operate.

Going Beyond the Value Chain

Beyond direct operations, many brands now include “beyond value chain mitigation” in their climate strategies, investing in external projects to compensate for residual emissions. While such measures may play a role in broader climate finance, they do not substitute for reductions within core sourcing and production systems.

What is Beyond Value Chain Mitigation?

Beyond Value Chain Mitigation (BVCM) is a relatively new concept within the Science Based Targets initiative’s (SBTi) framework that expands how companies contribute to global climate goals. Under the SBTi’s Corporate Net-Zero Standard, BVCM refers to mitigation actions or investments that fall outside a company’s own value chain, including initiatives that avoid, reduce, or remove greenhouse gas (GHG) emissions beyond what the company directly controls or influences. [27, 28]

Traditionally, corporate climate strategies have focused on reducing Scope 1, 2, and 3 emissions—those generated within operations, purchased energy, and across value chains. BVCM sits alongside these efforts as a complementary step. Rather than substituting for internal decarbonization, it is intended to accelerate the broader global net-zero transformation by financing or enabling emission reductions that a company cannot achieve through its own activity or supply-chain changes alone.

At its core, the BVCM concept reflects an evolving understanding of corporate climate responsibility. Many emissions, such as those from energy infrastructure, land-use change, or broader economic activity, cannot be eliminated through individual corporate supply-chain interventions alone. BVCM invites companies to finance or participate in climate solutions beyond their immediate operational footprint, whether through supporting renewable energy deployment, nature-based solutions like forest restoration, or emerging technologies such as direct air capture. When integrated alongside robust internal reduction efforts, these actions can help fill gaps in global mitigation pathways that traditional value-chain interventions struggle to address.

However, BVCM also sits at the intersection of ongoing debate about corporate climate claims. Because these activities occur outside a firm’s direct value chain, they are not counted as Scope 1–3 reductions and cannot be used to make traditional “net-zero” attribution claims on their own. Instead, the SBTi and wider climate community emphasize that such efforts should complement, not replace, direct emissions reductions aligned with science-based targets. How BVCM investments are measured, reported, and communicated will be critical to ensuring they drive meaningful global progress rather than serving as a veneer for unmet internal decarbonization goals.

Reduction Pathway in Practice: Where Ambition Meets Reality

In 2025, Impact Labs had the opportunity to have a discussion with a major fashion player in helping them reshape and refine their reduction pathway as well as their BVCM strategy aligning with the SBTi’s 1.5°C trajectory. Throughout our discussions, the truth behind the struggles of fashion brands on their sustainability commitments became more evident.

Scope 3 remains the main problem
For fashion companies, the contrast between Scope 1 and 2 emissions and Scope 3 emissions is stark. Reducing emissions from owned operations and purchased electricity is relatively direct: companies control their buildings, energy contracts, and logistics assets, and the technical solutions are well established.

The more consequential challenge lies in Scope 3, where the vast majority of fashion’s emissions are concentrated. For most fashion brands, Scope 3 emissions are dominated by sourcing: raw material production, textile processing, garment manufacturing, and upstream energy use. These activities span thousands of suppliers across multiple tiers and jurisdictions, limiting direct control and entangling emissions reduction with purchasing practices, production volumes, and lead-time expectations.

Material substitution sits at the center of the company’s sourcing narrative. Increased use of recycled polyester, lower-impact cotton, and alternative cellulosic fibers is presented as a pathway to decarbonizing upstream emissions. Yet, preferred fibers account for a growing share of inputs, but still represent a minority of total fiber volumes, and their benefits depend on displacement: whether they replace virgin production rather than supplement it.

Supplier engagement and energy efficiency form the second pillar of the company’s approach. Programs to encourage renewable energy adoption and process improvements in mills and factories are necessary and increasingly common across the industry. However, these efforts operate within commercial structures that prioritise cost, speed, and flexibility. Without parallel changes to purchasing practices, suppliers face limited capacity to deliver deep emissions cuts at scale.

Transport and logistics optimisation highlight a further tension. The company’s fast-response model depends on frequent replenishment and, at times, emissions-intensive transport modes. Efficiency gains can temper emissions growth, but they struggle to offset the climate impact of high throughput and compressed timelines. Here, operational agility and climate ambition pull in opposite directions.

The discussion illustrates a broader industry constraint rather than a company specific one. Scope 3 emissions are not difficult because solutions are unknown, but because they collide with the structural logic of fashion’s business model. This is precisely why BVCM is entering the conversation: not as a replacement for Scope 3 reductions, but as an implicit acknowledgment that value-chain decarbonization alone may not be fast enough under existing business models.

Beyond Value Chain Mitigation: Promise, Purpose, and Pitfalls

For large fashion groups with complex, globally dispersed supply chains, the appeal of BVCM is clear. Scope 3 emissions are slow to abate and difficult to control directly. Even with aggressive supplier engagement and material shifts, companies face a timing gap between their decarbonisation ambitions and what sourcing systems can realistically deliver. BVCM offers a way to contribute to climate mitigation beyond those constraints, particularly in sectors such as energy and land use where emissions reductions may be faster or cheaper to achieve.

However, SBTi guidance is explicit about the boundaries of BVCM. Beyond-value-chain actions cannot be counted toward Scope 1–3 reduction targets and cannot be used to claim net-zero achievement. Instead, they are positioned as an “above and beyond” contribution that sits alongside science-based reductions. [29, 30, 31]

Several critical points emerge from SBTi’s guidance that are particularly relevant for fashion companies.

Internal decarbonisation must remain the priority. BVCM is only considered credible when companies are demonstrably on track to meet their near-term Scope 1–3 targets.
Quality and transparency matter. SBTi emphasizes that BVCM actions should deliver real, additional, and durable climate benefits.
Strategic alignment. The most credible BVCM strategies are those that complement core risks such as investments in renewable energy systems relevant to manufacturing regions, or nature-based solutions aligned with fibre sourcing impacts.

Ultimately, BVCM reflects both progress and limitation. Its growing prominence signals recognition that value-chain decarbonisation alone may not deliver emissions reductions at the pace required. At the same time, its credibility depends on restraint: clear separation from Scope 1–3 claims, robust governance, and transparency about what BVCM can and cannot achieve. For fashion’s largest players, the challenge is not whether to engage with BVCM, but how to do so without allowing it to become a substitute for confronting the structural drivers of their own emissions.

References

1. Global fashion industry heading for slowdown in 2023. Just Style, 30/11/2023.

2. All the Major Fashion Brands and Retailers Severely Impacted by the COVID-19 Pandemic. Women’s Wear Daily, 24/12/2024.

3. Luxury fashion: independent brands in a consolidating industry. Bocconi Students M&A Circle, 23/01/2023.

4. Is apparel manufacturing coming home? McKinsey & Company, 11/10/2018.

5. How To Find Clothing Manufacturers In Vietnam 2025 // Top Clothing Suppliers And Factories In Vietnam List. Cosmo Sourcing, 22/11/2025.

6. Supply Chain Resilience In The Fashion Industry: Navigating Disruptions And Emerging Strategies. Rural Handmade, 05/05/2024.

7. Fast fashion: EU laws for sustainable textile consumption. European Parliament, 19/09/2025.

8. The Role of Extended Producer Responsibility (EPR) in Reducing Textile Waste. Textile Focus, 26/03/2024.

9. Fashion’s Next Trend. Human Rights Watch, 18/12/2019.

10. Fashion resale market grows as cost-conscious consumer emerges. Just Style, 11/11/2022.

11. Take-Back Programs: What They Are and How to Get Started. EcoEnclose, 28/08/2025.