The fashion sector has expanded rapidly over the past two decades. Global clothing production has nearly doubled since 2000, driven by fast fashion and shorter product lifecycles. This growth has brought substantial environmental and social costs, with impacts now too large for regulators, investors, or consumers to ignore.

1/ Fashion’s Carbon Profile

A. Scale of impact:  

The industry is responsible for 8–10% of global CO₂ emissions, more than aviation and shipping combined. Fashion produces 92 million tonnes of textile waste each year, the weight of 2,000 Titanics or 20 pairs of jeans for every person on Earth. Yet less than 1% is recycled into new garments.

The materials used and methods of production are also highly taxing. Polyester, now more than half of the global fibre production, sheds around 500,000 tonnes of microplastics annually, the equivalent of 5,000 blue whales entering the ocean. Textile dyeing accounts for 20% of global wastewater, often containing carcinogenic substances such as azo dyes, with surrounding communities exposed to long-term health risks (WHO). In Bangladesh, 72% of surveyed factory workers reported skin or respiratory problems linked to daily exposure to dyes and finishing chemicals (Greenpeace).

B. Where Emissions Sit:

As such, the journey and impact of a garment extends far beyond the clothing store, with around 90% of a brand’s footprint embedded in its supply chain (Scope 3). Globalised and outsourced production means cotton might be cultivated in India, processed and manufactured in China, and sold in Europe, with each stage adding emissions and resource intensity.
These supply chain emissions are the most challenging to track, for structural reasons:
• Multi-tier supplier networks with limited transparency
• Outsourced production across countries with differing standards
• Inconsistent reporting and missing primary data
• Seasonal cycles and demand variability

For industry leaders, Scope 3 represents both the largest risk and the greatest opportunity: it is where most emissions reside, and where meaningful reductions must begin.

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2/ Why It Matters

Several forces are converging to make Scope 3 disclosure and reduction unavoidable.

• Regulation: New reporting requirements such as the EU’s CSRD, the UK’s draft SRS S1 and S2, and IFRS S2 are embedding supply chain transparency into corporate reporting frameworks. Companies failing to prepare will face penalties and exclusion from regulated markets. See our article on UK Sustainability Reporting Standards S1 and S2 and on the EU’s Carbon Border Adjustment Mechanism.
• Markets: Investors and lenders increasingly expect reliable emissions data as a condition for access to capital. Weak or incomplete data undermines credibility and can disqualify companies from financing or procurement opportunities.
• Consumers and brand reputation: Greenwashing claims face closer scrutiny as low wages, unsafe working conditions, and textile waste exports are increasingly seen as environmental and social injustice. Harvard Business Review notes that many fashion pledges collapse under examination, exposing brands to reputational risk that often precedes regulatory consequences.

In short, Scope 3 emissions are not only a reporting requirement but a central business risk. They affect compliance, investor confidence, competitiveness, and long-term resilience.

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3/ The Way Forward

Addressing Scope 3 requires structure, recognised standards, and targeted interventions that address the most material drivers of emissions in fashion supply chains.

A. Understand and Adopt Recognised Frameworks

The starting point is measurement. The GHG Protocol Corporate Value Chain (Scope 3) Standard, provides the methodology for quantifying emissions across 15 categories. For fashion, the most material are purchased goods and services, upstream logistics, and end-of-life disposal. Aligning with this framework not only produces comparable data but also creates assurance-ready reporting systems that investors and regulators expect.

Purchased goods alone can represent up to 80% of a brand’s Scope 3 emissions (Quantis, 2018). This is because textiles and trims concentrate carbon at the material stage:

• Polyester, over half of global fibre production, emits 9.5 kg CO₂e per kg of virgin fibre.
• Conventional cotton is highly water and pesticide intensive, requiring 2,700 litres of water for a single T-shirt, while fertilisers release nitrous oxide, a potent greenhouse gas.
• Energy-intensive dye houses and spinning mills are often located in regions with coal-based grids, amplifying their footprint.

In practice, once a material is chosen, much of the garment’s footprint is already “locked in.” This is why actions such as substituting recycled polyester, sourcing from renewable-powered mills, or designing for circularity deliver far greater impact than marginal gains in retail operations, like improving store lights.

B. Set Targets and Verify Against Global Standards

Measurement without accountability risks credibility. The Science Based Targets initiative (SBTi) now requires companies to include Scope 3 if it accounts for more than 40% of their footprint, a threshold all major apparel companies exceed. More than 180 apparel and footwear companies have committed to SBTi targets, including Burberry, which aims to cut absolute Scope 3 emissions by 46% by 2030 across raw materials, processing, and logistics. Independent verification ensures that such commitments align with a 1.5°C pathway, protecting companies from reputational and regulatory risk.

C. Invest Where Impact is Highest

Supply chain engagement is the single most effective intervention, but it requires systems that can scale across thousands of suppliers.

• Supplier data pipelines: Companies such as PVH (Calvin Klein, Tommy Hilfiger) have built digital supplier platforms to collect primary energy and water data, moving beyond generic emission factors.
• Material substitution: Polyester accounts for over half of global fibre production. Substituting with lower impact materials such as recycled polyester can reduce emissions by up to 45% per kilogram. Similarly, organic cotton has been shown to cut GHG emissions by up to 46% compared to conventional cotton. (Textile Exchange, 2021). Patagonia, for example, has integrated recycled materials at scale, saving millions of post-consumer plastic PET soda bottles from landfill, and reducing water use through cotton T-shirt recycling. Versace has trialled Ingeo, a plant-based polymer made from corn by-products, in its collection to explore compostable alternatives.
• Energy in factories: The Apparel Impact Institute estimates that switching to renewable energy in textile manufacturing could deliver a 45% reduction in sector emissions by 2030.

D.  Take Practical, Verifiable Steps

A successful Scope 3 strategy builds transparency layer by layer:

• Map suppliers and hotspots: Map the full value chain from raw materials and manufacturing to transport, product use and end-of-life. Prioritise high-impact tiers such as fabric mills and dye houses, which typically account for over 60% of manufacturing emissions.
• Deploy simple data tools: Brands like H&M and Nike use supplier portals with standardised templates, lowering the reporting burden for small and mid-size factories, while ensuring comparability.
• Model reduction scenarios: Lifecycle assessment tools enable brands to compare interventions, such as recycled vs. virgin polyester, and quantify potential savings.
• Track progress transparently: Public dashboards, as piloted by Adidas, increase accountability and meet rising demands for disclosure credibility.

These examples prove that emissions reductions are commercially viable and can enhance brand value when communicated with integrity.

At NeuerEnergy,  our platforms support fashion brands in this journey by enabling full Scope 1–3 reporting, decarbonisation planning, and supplier-level baselining.

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Conclusion

Scope 3 emissions represent fashion’s greatest sustainability challenge: they are the largest source of environmental impact, the most complex to measure, and the most material to regulators, investors, and consumers. But they are also where the most meaningful progress can be made.

The cost of action is much lower than the cost of inaction, and leaders who act now will set the pace for the decade ahead. Those who establish robust data systems, align with recognised standards, and invest in supplier engagement now will be better positioned to comply with new regulation, maintain investor confidence, and strengthen their resilience in an increasingly demanding market.