Methodology

The Clean Energy Close Up investigation selected 11 global fashion companies to put their energy commitments and practice under the microscope. These brands were Adidas, Fast Retailing, Gap Inc., H&M Group, Inditex, Levi Strauss & Co, Lululemon, Nike, PUMA, SHEIN and VF Corp. Stand.earth chose these brands because they are well positioned to play an influential role in catalyzing broad change across the industry, and represent both more established and fast-growing actors.

The performance of companies was evaluated based on publicly available data sources including corporate sustainability and annual reports, submissions to CDP, company websites and press releases. Information disclosed publicly has been cross referenced with company statements to verify accuracy. 

Stand.earth shared individual scorecards and assessment details with each company prior to the publication of this report, inviting them to provide feedback and disclose any additional public information that was not captured in our data collection. Stand.earth assigned scores to each of the four categories, which contributed to the overall score of the company out of a possible total of 100. 

In some areas, research was limited by a lack of public disclosure on supply chains from companies. This review is a small sample of global companies, offering a snapshot into what progress is being made towards the energy transition. Additionally, many of the renewable energy policies and transition plans from brands and retailers remain in their infancy, which makes assessing the social impact of efforts harder to measure at this time.

Data compiled in the supply chain map which identified supplier-customer relationships was gathered based on a combination of Bloomberg Terminal and Panjiva, Open Supply Hub data, and supplier lists disclosed by brands. 

Qualitative and quantitative supplier environmental data was then gathered from manufacturing companies’ sustainability, CSR and/or ESG reports, along with official websites. SBTi goals and commitments were collected through the SBTi’s Target Dashboard. In instances where there is a discrepancy between the data presented in a supplier’s CDP report and its sustainability (or CSR/ESG) report, the information disclosed through the CDP was given priority. Supplier data was used to make qualitative assessments with regards brand progress, but was not scored or used as part of brand scoring.

Please note that several of the suppliers featured on this website are headquartered or have operations beyond Asia. However, the information presented here is exclusively focused on their activities within Asia. 

Impact methodology: 

Four main impact areas and weighted consideration: 

1. 1.5 ℃ Aligned Climate and Renewable Energy Commitments (10%)
2. Transparency (10%)
3. Progress Towards Benchmarks (40%)
4. Renewable Energy & Efficient Manufacturing: Actions, Engagement and Advocacy (40%)

1.5 ℃ Aligned Climate Commitments and Renewable Energy – 10%

Stand.earth evaluated companies on the strength of their publicly stated commitments to reduce GHG emissions across their entire value chain in line with a 1.5℃ pathway. Company performance was evaluated according to the following criteria:

• Absolute greenhouse gas emissions target of 55% or greater by 2030 in own operations.
• Commitment to 100% renewable energy in own operations. Renewable energy to be new and additional to the grid.
• Absolute greenhouse gas emissions target of 55% or greater by 2030 in the supply chain.
• Commitment to 100% renewable electricity in the supply chain by 2030. Renewable electricity to be new and additional to the grid.
• Public commitment to phase out coal-fired boilers from manufacturing by 2030 or earlier and transition to electric or dry processing alternatives. (In public materials outside of UN Fashion Charter)

Transparency – 10%

Stand.earth evaluated companies on levels of disclosure surrounding energy consumption and GHG emissions, as well as transparency on supply chains. The Scorecard assessed if companies had disclosed full information on:

• At least 3 years and a base year of GHG emissions performance from Scopes 1, 2 and 3 as well as a full breakdown by category of Scope 3 emissions.
• Public supplier lists, available to Tier 4
• Transparency on electricity and energy consumption in own operations, including sourcing
• Transparency on energy and electricity consumption in supply chain, with regional/geographic, tier level, or facility level breakdown, including sourcing

Progress Towards Benchmarks – 40%

For the first time for this Clean Energy progress update, Stand.earth used specific and measurable progress towards fossil fuel phase out and emissions reduction benchmarks as a key scoring criteria. Company performance was evaluated based on:

• Supply chain emissions reductions achieved to date, compared with the benchmark of reducing emissions by 55% by 2030 compared with 2019 levels
• Progress towards 100% renewable electricity sourcing in stores, offices and warehouses (Scope 2), predominantly from high impact sources
• Progress towards 100% renewable electricity in the supply chain by 2030, prioritizing high impact sourcing
• Proportion of the brand’s supply chain by spend, or number of suppliers, transitioned off coal and onto electrification or low impact alternatives.

Renewable Energy & Efficient Manufacturing: Actions, Engagement and Advocacy – 40%

Leadership in this category involved active engagement and investment by brands to reduce fossil fuel energy demand and increase efficiency and renewables in their supply chains. Criteria included:

• Training, engagement, feasibility studies and other non-financial programs designed to reduce reliance on fossil fuels by energy efficiency measures, promote renewable electricity and promote a thermal energy transition, with detailed information about support offered and percentage of suppliers included.
• Fair financing of the energy transition: brands offering financial support for manufacturers to make capital investments and upgrades, in the form of grants, low-interest loans, collective action with other brands, and more, including detailed information on the scale of financing available and delivered, terms, and proportion of suppliers included.
• Supportive procurement policies: suppliers required and supported to transition to renewable energy and report energy data. Incentivization or requirement of suppliers to set appropriate targets, alongside ethical purchasing policies which provide stability for suppliers while undertaking decarbonization programs, e.g. long term contracting and green premium pricing.
• Advocacy for national or subnational policies to increase access to renewable energy or electricity in supply chain regions, end investments in coal power plants or fossil fuel infrastructure attached to the supply chain; support policies to expand access to renewable electricity procurement options in key supply chain markets.
• Investment in increase additional renewable energy access and procurement, particularly in supply chain regions (i.e. (Direct) Power Purchase Agreements, direct investment)

Primary authors: Rachel Kitchin and Amy Nguyen
Contributors: Gary Cook, Seema Joshi
Design: Studio Lake

This document has been prepared using best practices and due diligence using information available at the date of publication. All information is subject to change. This report is published ONLY for the purposes of reference, information sharing, and the wider public interest in environmental protection. Any liability shall not be borne by Stand.earth due to the use of this report during the course of any investments or other decision-making processes. The content of this report is based on information from publicly available sources or officially disclosed by companies. If you represent a company that appears in this material that you believe is not accurately represented, supplemental information can be sent to fashion@stand.earth.