Fashion Industry Trade Policy Request| COP26

Trade & Policy

Fashion Industry Trade Policy Request| COP26

The global apparel and textile industry, which generates over US$ 1.5 trillion in annual revenue and used 109 million tons of fibres in 2020, is actively working to be part of the solution to the climate crisis. Over 50 companies and organisations have joined forces to ask for policy change to incentivise the use of environmentally preferred materials such as organic cotton and recycled fibres. The request, presented at COP26 by global non-profit Textile Exchange, is a practical solution to help the industry achieve its climate goals with an important but often overlooked policy lever: trade policy. Cost is one of the key barriers faced by companies looking to shift their supply chain towards environmentally preferred materials. But by mitigating or narrowing price premiums, trade mechanisms can be used to incentivise the increased production and adoption of these fibres, making them more favorable than, or at least equal to, their conventional counterparts. Using trade policy to incentivise better practice in materials sourcing is a ground-breaking use of legislation for the industry, working alongside regulations and penalties to promote positive action instead. It has the potential to level the playing field financially for companies committed to better materials sourcing, without the reduction in cost being felt by their supply chain or the farmers who grow the fibres. Environmentally preferred materials should be defined as those from certified, verified sources that can be traced from raw material to finished product, and that are connected to data-driven environmental impact reductions. Organic cotton typically has a lower carbon footprint than conventional cotton, for example, as is the case with recycled polyester when compared to virgin polyester. The policy request builds on Textile Exchange’s Preferential Tariff Project, initiated in 2018, which explored incentives such as tax credits and/or suspension or duty reductions of an imported component or finished, certified product. It provides governments with a tangible action to remove a key barrier to scaling environmentally preferred materials: increased cost. Since nearly all major fashion producing and consuming countries have signed the Paris Agreement, it is addressed to every government present at COP26 It is expected that this would enable achievement of Textile Exchange’s industry goal of a 45% reduction in greenhouse gas (GHG) emissions in the pre-spinning phase of textile fibre and material production by 2030. Said Judy Adler, VP Environment, Social, and Governance (ESG), Gap Inc., “Sourcing more preferred fibres such as recycled polyester and organic cotton is an essential part of Gap Inc.’s efforts to reduce the impact of our products, enabling us to progress towards our climate and product sustainability targets. Supporting this transition via lower tariffs on these products helps the apparel industry move swiftly towards a more sustainable future.” According to Patrik Lundström, CEO, Renewcell, “The fashion industry is poised for massive change, but the transition to low impact materials and value chains needs a supportive policy environment. I support the call for policy measures that reduce the barriers to scale and rapid adoption for preferred materials and technologies in fashion.”