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Stella McCartney to Fashion Industry: Account for Nature’s ‘Hidden’ Capital

Stella McCartney believes that it’s crucial for fashion companies to not only reduce their impact on the environment but also measure, disclose and take urgent action.

But don’t mistake this for a case of “do as I say, not as I do.” The British luxury house says that it is “already committed to making every action count.”

Last week, Stella McCartney published its 2018/19 eco-impact report, employing a system of natural capital accounting, originally developed by former parent Kering, to place a monetary value on the company’s footprint across the value chain, from the extraction of raw materials to the running of its stores, offices and distribution centers.

Since splitting from Kering in 2018 (and tag-teaming with LVMH Moët Hennessy Louis Vuitton the following year), Stella McCartney says it has been working on customizing the tool to integrate more data from its suppliers to “better reflect the realities of their practices and impacts on the ground.”

Results have largely been positive. Its most recent Environmental Profit & Loss (EP&L) showed a slight decline from 8.22 million euros ($9.65 million) in 2018 to 8.21 million euros ($9.64 million) in 2019.

Cotton is Stella McCartney’s No. 1 material by volume, making up 26 percent of its total material use in 2018 and 28 percent in 2019. (Seventy-three percent of it was organic.) Polyester and polyurethane, driven by the firm’s use of vegan leather in its shoes and bags, is a close second, followed by wool, which features in its knitwear.

Stella McCartney’s most significant environmental impacts remain in the raw-materials extraction phase “furthest back in the supply chain,” such as from farms, forests and mines. Seventy-eight percent of its footprint in 2019, it said, stemmed from Tier 4 suppliers.

The brand’s biggest challenge, it added, is land use, which generated 37 percent of its impact in 2018/19, up from 29 percent in 2017. The changes, Stella McCartney noted, were likely propelled by fresh information regarding two of its most-frequently used fibers—cotton and wool—both of which occupy large tracts of land that may have been converted from other land-use types for agriculture and livestock. But the brand says it has also mitigated further impacts through previous decisions such as jettisoning virgin cashmere and ensuring that all of the forestry products it consumes hail from sustainably managed rather than ancient or endangered forests.

A close second is greenhouse-gas emissions, which dipped across Scopes 1 to 3 from their 2017 high of 36 percent of the brand’s overall impact to 27 percent in 2018/19. The majority of its emissions have been “consistently” in Scope 3, which is to say indirect emissions linked to the value chain as a whole.

“This means the biggest opportunity for reduction lies outside of our direct operations, which makes it all the more important to identify where the emission hotspots are in our supply chain as well as the suppliers and materials that have potential for reductions or energy efficiencies,” it wrote, adding that this is why collaborative relationships with supply-chain partners are so vital.

In 2019, Stella McCartney emitted roughly 27,210 metric tons of carbon, which equated to a cost to society of 2.2 million euros ($2.58 million). Of its total greenhouse-gas impact, 44 percent derived from its use of wool, making the fiber its highest-impact raw material in this category. The next highest-impact material was cotton, which generated 11 percent of its entire greenhouse-gas impact.

Another hot spot of impact? Water pollution in Tier 4. Its use of brass, most significantly for its bag chains, accounts for 77 percent of Stella McCartney’s water pollution impact. “The issues with mining of copper (copper makes up around 12 percent of brass’ composition) are well known to us,” it wrote. “We have been working to phase out this material and develop alternatives that have lower impacts and are more recyclable.”

Stella McCartney says it doesn’t have any easy answers, but it will be leaning on “nature-based solutions” such as regenerative farming to improve soil health, draw down carbon, enhance biodiversity and support local communities while “giving back to nature instead of taking from it.”

“We will also continue avoiding high-risk locations and high-impact materials, restoring and regenerating ecosystems, and working to transform the fashion industry,” it added.

What’s equally important is for brands and retailers to use information about their supply chains to guide actions. Much of the fashion system, whether by tradition or design, remains deeply obfuscated, making it difficult to pin down what changes must be made to bring about a more sustainable industry in the age of climate change.

If no further action is taken over the next decade, “beyond measures already in place,” said Global Fashion Agenda and McKinsey & Company in August, the industry’s carbon emissions will balloon to roughly 2.7 billion metric tons a year by 2030, expanding beyond the emissions limit required to align with the 1.5-degree Celsius pathway that would mitigate the worst effects of climate catastrophe, including oppressive temperatures, severe storms, persistent droughts, frequent flooding and even more devastating wildfires.

“The value of these goods and services tend to be hidden and not accounted for, which has led to companies operating without regard or recognition of their impacts on ecosystems—so much so that we have been depleting our natural environment faster than it can restore itself,” Stella McCartney said. “Not only is climate change a growing threat to species and ecosystems, but also to people and communities worldwide, especially those that depend most directly on Mother Earth and the services she provides.”

The decisions made today, it added, are “critical for our better tomorrow—building our socioeconomic resilience and regenerating our social and natural systems so that we avoid or reduce the likelihood of these future shocks.”

Information is power, the brand said, and the industry must brace itself for hard truths: 75 percent of terrestrial land has been altered by human activities, wildlife populations have collapsed by 60 percent and the world’s scientists have declared we are in a climate emergency. Tackling those problems begins with obtaining accurate data.

“Our hope is that in publishing this report, we will inspire others to consider their natural capital and account for the value of the ‘hidden’ services that nature provides us all,” Stella McCartney said. “Coming together has never been more necessary than it is in this moment. It is imperative that we all accelerate the change needed to protect Mother Earth. In order to do this, we believe we must first acknowledge all that nature provides.”

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