As one of the largest and most influential fast fashion retailers in the world, Inditex’s lack of reported progress in the Clean Energy Close was extremely disappointing. However, the company’s recently increased supply chain emissions target of 50% reduction by 2030, and its new commitment to 50% renewable electricity in the supply chain by 2030 are both important and essential steps forward. The company still reported significant emissions growth in 2022 which leave it dangerously off track from 1.5. Stand.earth encourages Inditex to sharply increase transparently into its supply chains and progress to provide accountability to its new targets. The company demonstrated some engagement on the energy transition through its Green to Wear and Environmental Improvement Plan pilot. However, to rapidly and equitably cut emissions it needs to provide extensive and debt-free financing, and address the inherent inequalities in its supplier relationships with supportive purchasing policies.
Total Score
Emissions
About the Clean Energy Analysis
The 2024 Clean Energy Close-Up builds on the foundation of the 2023 Scorecards. It provides an in-depth analysis of the tangible progress of 11 of the most influential global fashion brands. Their performance is measured against the runway to an equitable fossil fuel phase-out by 2030 on criteria related to energy efficiency and renewable energy, drawing in data shared publicly by manufacturers in their supply chains.
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Score Breakdown
| Target | Brand Commitment | Meets Benchmark |
| Stores and offices GHG Emission reduction target (Scope 1 & 2) | Absolute reduction of 90% from 2018 levels by 2030 | ✔ |
| Stores and offices Renewable Electricity target (Scope 2) | 100% by 2030 | ✔ |
| Manufacturing emissions target (Scope 3) | Absolute reduction of 50% from 2018 levels by 2030 | ❌ |
| Manufacturing Renewable Energy target (Scope 3) | 50% by 2030, 100% by 2040 [60] | – |
| Public commitment to phase out thermal coal and transition to electrification/avoid harmful biomass | Coal phase out by 2030 | – |
Inditex provides a 3-year history breakdown and base year of GHG emissions from Scopes 1, 2 and 3 including full Scope 3 breakdown in its reports and CDP disclosure. [50]
Despite calls to do so for years, the company continues to keep its supplier lists private.
There is no public information about the percentage of renewable energy, including sources, for its supply chain. Similarly, no data is available about thermal energy demand in the supply chain by source.
The company reported a significant increase in Scope 3 Category 1 emissions from 2021 to 2022 of 17.37%,[51] and a comparison of its manufacturing emissions against its annual revenue suggests that the company has not been effective at decoupling emissions from production.
Although Inditex has achieved its target of 100% renewable energy within its own operations in 2022 and has maintained this ever since Inditex must commit to expanding high-impact renewable energy sources and not solely relying on REC/EAC purchases to reach the target. [52] Inditex has disclosed they have more plans to engage in VPPAs in 2025.[53]
For such an influential fashion retailer, it is disappointing that Inditex has no target to increase the percentage of supply chain electricity from renewable sources. Given there is no disclosure of its current performance, the company gained no points in this category.
On thermal transition progress in support of decarbonization by 2030, Inditex has publicly committed to a coal phase-out by 2030. But unlike a handful of other brands, it does not share progress to date on how many Tier 1 or Tier 2 suppliers have transitioned away from coal. In replacement, Inditex encourages its suppliers to use responsibly sourced, certified biomass suppliers in Asia that have been linked to biomass boilers. [54] In correspondence with Stand.earth, the company acknowledges that biomass is a transition solution.
Step 1: There are various examples of how Inditex is embarking on training, feasibility studies and collaborative projects to promote the transition. This includes a knowledge transfer platform,the Collaboration Programme for Environmental Improvement (involving 208 key facilities)[55] and its Green to Wear Standards.[56] However, it is unclear how many facilities are using the knowledge transfer platform. The Environmental Improvement Plan has been launched as a pilot with a selected group of key suppliers to increase the purchase and/or generation of electricity coming from 100% renewable sources and reduce thermal energy consumption in relation to stationary thermal sources.[57]
Step 2: There was no clear public evidence of Inditex providing financial support for suppliers on energy efficiency or renewable energy programs or how much it is investing to accelerate renewable electricity through different programs.
Step 3: Inditex’s suppliers are not required to make energy savings as a condition of the contract. It has its code of conduct, Green to Wear standards and Higg FEM data collection rules but not codified into contracts. This feels like a missed opportunity given that the Inditex Green to Wear standard has requirements that for an A or B classification suppliers must have: at least 80% of consumed thermal energy must come and be used from renewable energy and at least 40% of consumed electric energy must come and be used from renewable energy. [58]However, the percentage of suppliers by procurement spend that have to comply with this climate-related requirement of the Green to Wear standards only accounts for 19.68%.
In comparison to competitors like H&M Group, Inditex demonstrates little evidence of clean energy advocacy beyond membership in industry initiatives or trade associations. Inditex has engaged on policy issues such as the Product Environmental Footprint for Apparel and Footwear of the European Commission.[59]
Supply Chain Movement
Of the 34 suppliers linked to Inditex, from the data available, 10 share some level of detail on their climate and decarbonization plans. Lenzing, who supply some of Inditex’s ‘environmentally preferred materials’ like TENCEL®Lyocell, has plans to reduce absolute Scope 1 and 2 GHG emissions 50% by 2030 and achieve net-zero for Scope 1, 2, and 3 CO2 emissions by 2050.
Amongst this group, there appeared to be a low level of ambition when it came to transitioning to renewables. However, Delta Galil Ltd aims to have a 25% renewable energy supply by 2025.
The renewable energy ratios across suppliers varied from 58.18% (Lenzing) to 0.31% (Makalot).