Billionaires in the fashion industry aren’t doing much to fight climate change

Can billionaires who make profits from climate change help the fashion industry in the fight against it?

A few months ago, Patagonia—an American brand specialising in outdoor clothing—made headlines that shook the internet. The brand’s founder, Yvon Chouinard, announced he was giving away his $3 billion-valued company by transferring the ownership to a specially designed trust and a non-profit organisation, The Holdfast Collective, to help fight climate change. While the move was lauded, the reality is far from the truth. According to reports, including this article by Bloomberg, the deal is structured to help the billionaire and his family keep control of the company and avoid paying $700 million in taxes. It also helps Chouinard avoid the US estate and gift tax, including a 40 per cent levy on large fortunes when transferred to heirs. 

While at a macro level, the idea behind the philanthropy of “giving away the maximum amount of money to people who are actively working on saving this planet” (as Chouinard stated in an interview with The New York Times) is noble, the world, especially the fashion industry, shouldn’t rely on billionaires and billion-dollar companies to fix the environmental crisis the industry has perpetuated.

Accountability matters

In a video essay, ‘Why There’s No Such Thing as a Good Billionaire,’ which garnered 1,692,708 views, YouTuber Adam Conover explains how The Holdfast Collective (which will receive $100 million a year in profit from Patagonia) will use the money to influence the US political system. “This goes against democracy. Everyone sees the world differently, and everyone has different needs. And that means that no one person has all the answers. So the central insight of democracy is that we need to spread power widely and diversely among many different types of people if we want to solve our biggest problems. But billionaires like [Yvon] Chouinard are doing the opposite—he’s hoarding power, even if he feels he’s using it for good,” said Conover in his video.

Elizabeth Cline, the advocacy and policy director at Remake—a global non-profit organisation that fights for fair pay and climate justice in the fashion industry—agrees with Conover. “One of the most important things people of wealth can do is to give money selflessly to worker organisations and environmental justice and advocacy non-profits,” says Cline. “But the problem with Patagonia’s non-profit is that wealthy people are setting the policy agenda instead of those directly impacted by climate change and other environmental and social issues in fashion. Billionaires should use their power and connections to influence good climate policy that benefits impacted communities and delivers for workers. It includes giving money to groups already working to ensure lobbyists aren’t rallying against smart policy solutions,” she explains.

In their recently released Fashion Accountability Report, Remake assessed 58 of the world’s largest companies across fast fashion, luxury and big-box retail. It tracked the sustainable steps taken by these entities to tackle climate change. Their findings revealed that while 34 companies report their carbon emissions across their entire value chain, only three companies—Burberry, Everlane and the H&M Group—offer transparency by publishing complete carbon emission reports, setting ambitious long-term, net-zero targets, and demonstrating the reduction of their total greenhouse gas emissions compared to their base years.

World Economic Forum statistics in 2020 showed that the fashion industry is responsible for at least 10 per cent of carbon emissions globally and is the second-largest consumer of the world’s water supply. “Carbon emissions are closely linked to overall resource consumption. The more people make, the more they spend and consume, and the higher their carbon footprint. This is one of the main reasons that Remake advocates for living wages to tackle the climate crisis, as living wages would both redistribute wealth and overconsumption away from the top (from shareholders and corporations) down to those in the supply chain who are currently under- consuming,” Cline explains. “In fact, some garment workers are still facing hunger and malnutrition since the COVID-19 pandemic started. So raising wages for the working people across global supply chains is a solution to address the climate emergency while delivering social benefits globally,” she adds.

The environmental cost of over-production 

According to Forbes’s most recent report, Bernard Arnault—CEO of LVMH Moët Hennessy Louis Vuitton—whose aggregate carbon footprint currently amounts to 4.8 million tons of CO2 equivalent, has surpassed Elon Musk to become the world’s richest man with a fortune worth $186.2 billion. Furthermore, according to Remake’s Fashion Accountability Report, Inditex (Zara)—whose net profit between February and October this year reached €3.1 billion in 2022—has annual emissions equivalent to consuming 39 million barrels of oil. 

It’s a universal fact that fashion is stuck in a ‘take-make-waste’ loop with devastating environmental impacts, not to mention huge economic losses, as Priyanka Khanna, head of Asia expansion at Fashion for Good—a global platform for innovation and sustainability in fashion—points out. “On an average, we buy 60 per cent more clothing than we did 15 years ago, but we keep each item only half as long. Also, nearly 60 per cent of all clothing produced ends up burned or dumped in landfills within one year of being made,” she says.

While multi-million dollar brands continue to manufacture more than we need, often at the cost of human rights and the environment, Katrina Caspelich, CMO at Remake, believes the fashion industry can be more mindful by addressing overproduction, overconsumption and maker well-being. “Instead of creating more ‘eco-friendly’ capsule collections and using greenwashing tactics to get consumers to buy more, brands should take accountability for the many ills of their manufacturing practices, putting an end to poverty wages and creating fewer new items,” she says. 

According to Khanna, there needs to be a shift towards a more circular system. “Circularity would allow a more closed loop system, in which materials are reused within the industry and innovation can radically improve fundamental processes within the supply chain, which is still largely based on centuries-old methods and technology. The fashion industry can transform from the linear ‘take-make-waste’ model to a circular ‘good fashion’ approach that is restorative and regenerative by design,” she says. Fashion for Good’s Innovation Platforms offers solutions by focusing on fashion and apparel innovation and supports innovations that have the potential to improve the supply chain when scaled. “The biggest challenge is for all factors to collaborate in a pre-competitive mindset to drive these solutions into the mainstream,” says Khanna.

Change to save the environment

A pertinent question keeps popping up: Can the fashion industry truly ever be sustainable? For Cline, sustainability will always be a work in progress. “Consumer products will always consume resources, whether it’s water, energy or raw materials. Fashion’s carbon footprint is traced to the manufacturing phase, in factories, and on farms. So large apparel conglomerates should be helping their factories and raw material suppliers decarbonise and pay them to make the change. Every large company should chip in money annually, commensurate with how much carbon they spew yearly. For example, Inditex is responsible for almost one per cent of global emissions in the fashion industry. They should then contribute one per cent of their net revenue towards helping their supplier meet their carbon reduction goals and pay living wages,” she says. “We should aspire to make the process cleaner, less wasteful, more regenerative and to produce products that create good jobs, bring people fulfilment and joy and restore ecosystems. Although it can come across as a bit Utopian, it’s important to have aspirational goals to work towards,” she adds.

For Khanna, the answer lies in the power of innovation. “All elements, from design to end-of-use, must be reconsidered for a circular supply chain. We need brands, producers, retailers, suppliers, non-profit organisations, innovators and funders to re-think their approach,” she says, emphasising a collaborative effort to bring about a change in mindset.

“On the one hand, we have start-ups and innovators with breakthrough solutions, but they are often stuck in the labs and struggle to reach scale. On the other hand, we have large corporations looking for innovations and solutions to their supply chain challenges. Connecting innovators with large, mainstream corporate players is a crucial step to driving adoption, enabling tipping points and creating real change in the system,” she explains.

While the billion- and million-dollar companies need to be answerable and accountable at every step, at a consumer level, our job remains to be aware and seek the truth while educating ourselves to work towards off-setting the effects of climate change. “As a consumer, it’s important to understand that your individual actions can play a role in systematic change. The hope is that once we, as consumers, have reassessed our relationship with consumerism, we can move forward and be more conscious in our approach to garments, as well as feel more confident in taking active steps that can lead to real political change—such as advocating for legal reform within the fashion industry,” says Caspelich.

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