Fashion’s climate commitments are faltering. According to advocacy group Stand.earth’s latest report, 40 per cent of brands increased their emissions last year. The sector’s overall emissions jumped 7.5 per cent in the same period, per the Apparel Impact Institute (Aii). If fashion’s momentum to tackle the climate crisis wasn’t already questionable, the political climate is slowing things further, as US tariffs drive up costs and regulators move to weaken sustainability legislation in the EU.
But brands are not the final word in climate action. Fashion supply chains contribute the bulk of the industry’s emissions footprint, and some sustainability-focused manufacturing firms have taken matters into their own hands. Many have made significant progress towards reducing their own emissions and setting Science Based Targets (SBTs) for their own facilities and suppliers in recent years.
The announcement, made today during the UN biodiversity conference in Cali, Colombia, follows a year-long pilot of the targets by 17 global companies.
“Manufacturers have been [decarbonising] without an incentive from the brands anyway for the last decade or so,” says Saqib Sohail, head of engagement at science-led non-profit the Microfibre Consortium (TMC), and the former head of responsible business projects at Artistic Milliners, a major manufacturer in Pakistan.
“We haven’t had any reason to scale down what we’re doing,” says Dr Vidhura Ralapanawe, executive VP of Epic Group, a garment manufacturer with production facilities in Bangladesh, Ethiopia and Jordan. Epic Group secured a $100 million sustainability-linked loan from the International Finance Corporation (IFC) last year, which Ralapanawe says is tied to the company’s sustainability targets. These include emissions reductions achieved in its new state-of-the-art apparel factory in India, which is under construction (phase one opens in December) and which the group says will have net-zero emissions. The factory will run on biomass and solar energy and is one of the “first purposefully designed facilities that focus on [climate] adaptation”, says Ralapanawe. The workers will be shielded from summer temperatures well above 43°C inside an insulated, heat-resistant shell with air conditioning run on renewable energy.
Heat stress lays bare the tension between climate mitigation and adaptation. Workers are caught in the middle.
Manufacturers — many operating outside the Global North’s political crosswinds — are taking the long view. Some say geopolitical tensions and the sustainability pullback will subside, and the climate crisis will refocus policymakers’ attention on emission cuts in time. If or when that happens, suppliers plan to be ready. “These changes are temporary,” says Sohail. “We look at the forecasts and the trends of the past and know that governments will change. Their policies will change.”
This perspective taps into broader shifts. As global brands roll back on climate goals, the sustainability movement’s centre of gravity may be shifting to the supply chain. From Bangladesh and India to Taiwan, some leading suppliers have pushed ahead with energy efficiency and solar adoption, which is where the business case still stands. But deeper cuts (especially for heat) to meet net-zero goals require significant investment. Can new collaborative efforts and funding models drive momentum before it stalls?
Political support isn’t rolling back everywhere
While policymakers in the Global North water down their previous ambitions, or rescind support for sustainability entirely, some garment-producing countries in the Global South are creating a more hospitable environment for change. To that point, while clean energy is on its heels in the US, adoption is accelerating in key production countries such as China, Vietnam and India. Photovoltaic panel costs have fallen by about 90 per cent over the past decade, while some governments have introduced policies that increase access or reduce the costs of clean energy.
In Vietnam, for example, the government changed its energy laws in July 2024, following years of pressure from brands. Now, third-party renewable companies can sell electricity to large offtakers, expanding the local garment industry’s access to clean energy through direct power purchase agreements.
In India, solar has outpaced fossil-fuel generation this year. Shahi Exports, the nation’s largest apparel manufacturer, is looking to expand its offsite solar installations beyond an initial pilot project. A local decision to waive electricity-transmission (“wheeling”) fees has been critical to affordability, says Anant Ahuja, Shahi’s director of ESG and sustainability, alongside better economics. “The price of panels coming down and efficiency going up has supported us to continue investing,” he says.
Yee Chain, a Taiwanese textile manufacturer for the footwear industry, has also increased its adoption of solar energy, enabled by supportive policies, says circularity systems manager and advanced innovation research and development lead Anett Sóti.
Even in Bangladesh, which has been slow to adopt renewables, high natural gas prices have led to more manufacturers seeking out solar as a solution, and the government is reviewing its renewable energy policy. “[Solar] just makes pure financial sense. It’s no longer a sustainability game anymore,” says Ralapanawe.
Who is paying for the transition?
For apparel manufacturers, which operate on tight margins and often have limited access to financing, climate initiatives with strong business cases are the most workable. This was true before tariffs and geopolitical tensions made the industry more cost sensitive, with many brands asking for price cuts from suppliers.
Manufacturers are still implementing projects that improve operational efficiency and lower power bills. Ralapanawe says Epic Group is upgrading its compressed-air systems with precision models, replacing laundry machines with high-efficiency Tonello units, and repairing its steam system to prevent energy loss in pressing and laundry operations. However, efficiency only reduces a portion of emissions, especially in facilities with high heat needs. Sohail says most investments will require larger costs “to make a substantial change”.
An open question is whether renewable energy adoption can continue at full speed, as it requires significant upfront costs and long-term confidence (renewable contracts can last a decade or more). Manufacturers note that order volumes are down and commitments are shorter than last year, undermining their ability to make such investments.
As a result, climate projects that add costs and come with no energy savings are at risk of stalling, with thermal upgrades perhaps most vulnerable. According to Aii, thermal energy accounts for two-thirds of the supply chain’s energy demand. That’s because textile factories require heat for dyeing, finishing and other processes, which are traditionally powered by coal and natural gas, and not easily converted to renewable electricity.
Dhanujie Jayapala, general manager of environmental sustainability at MAS Holdings, a large manufacturer producing mostly in Sri Lanka, says that his company is on track to meet its 2025 goals of 25 per cent emissions reductions against a 2019 baseline. However, a solar expansion that was planned for this year is on hold for now, given the impact on US tariffs on MAS Holdings’s exports (tariffs stand at 20 per cent for Sri Lanka). “Long-term investments such as solar are now considered too risky,” he says.
The industry needs novel technological and funding solutions to address this complex moment. Arvind Ltd, a textile manufacturer headquartered in India, installed its first biomass boiler at its facility in Naroda last year with funding from H&M’s Green Fashion Initiative; Arvind is sourcing cotton agricultural waste from local farmers for its boilers. (Biomass, if sourced sustainably, can be low carbon or even carbon neutral, and manufacturers are working to expand access to these hard-to-come-by sources.)
Abhishek Bansal, SVP of sustainability at Arvind, says the company plans to install more biomass boilers to meet its sizable thermal energy needs, but only when the company identifies more partners to help cover the cost. “Progressively, we will be coming off coal altogether,” he says. Phasing out coal is particularly challenging in India, where it’s cheap and biomass is hard to access, but Bansal says it can be done for $7 per tonne of CO2 (or less). He’s trying to convince more clients to help, but says, “So far, the support is, honestly speaking, not there.”
The largest manufacturers are successfully transitioning from coal, but at a cost. Sapphire Finishing Mills, part of Pakistan’s Sapphire Group, has managed to phase out 99.5 per cent of coal, according to head of sustainability Raffay Bin Rauf. It’s done so by purchasing 30 acres of land to store the 300 tonnes of rice husks and biomass that its facilities consume daily, a level of investment out of reach for most manufacturers.
If some large manufacturers are pressing pause on pricey climate initiatives, a concern is that less resourced factories have yet to even start making reductions. “The problem still lies with SMEs. How are they going to do this?” asks Sohail.
Waterless dyeing is another promising — but expensive — technology, as it would eliminate the need to heat water to fix colour and finishes to textiles, one of the most energy-intensive steps. Yee Chain is exploring purchasing this machinery for its factory, but is struggling to access funding. To invest, the company needs a clear commitment from brands, which is difficult now, says Sóti. “We are the passive side. It’s hard to push if they don’t push.”
Doubling down on collaboration
According to Vogue Business’s recent sustainability leaders survey, manufacturers need financial support for investments, consistent contracts and collaboration to accelerate progress. There are promising signs that a more collaborative and targeted approach is finally taking root.
The Apparel and Textile Transformation Initiative (ATTI), a new joint effort led by the International Apparel Federation (IAF) and the International Textile Manufacturers Federation (ITMF), tackles sustainability challenges, including climate change, on a country level. Led by manufacturers, ATTI’s first pilot assessment of Türkiye pinpointed high interest rates and the country’s fossil fuel-dependent grid as key roadblocks. Large brands, including Bestseller, H&M, Inditex and PVH, also participated in the assessment.
Olivia Windham Stewart, who is leading the development of ATTI on behalf of IAF and ITMF, says that shifting the focus from global to national-level action could galvanise climate action. “It makes it much easier for stakeholders to begin to see a way forward, rather than taking the global approach.” Climate targets are set at the global or company level, which Stewart says is overwhelming. Shahi Exports and Epic Group are members of the Fashion Producers Collective, a new sustainability think tank that is manufacturer-led and seen as key to devising practical sustainability solutions.
As for the funding challenges, new approaches are emerging. The Industrial Decarbonisation Roadmap (IDR), an initiative organised by Cascale (formerly Sustainable Apparel Coalition) and Aii, is working to benchmark emissions and develop brand commitments to source from low-carbon facilities, which manufacturers agree is needed for them to invest in progress. Likewise, a new report from the UN Fashion Charter on Climate Action advocates for an industry-specific carbon market and building the net cost of decarbonisation strategies into the design phase.
Despite green shoots, sharing costs and similar solutions may be off the table for the moment. One Indian manufacturer hit with high tariffs (the US administration is threatening to double rates to 50 per cent on 27 August) says it is currently shipping products at a loss. While the trade war is likely a temporary source of chaos, climate change disruptions are here to stay. “We don’t have the luxury of time right now,” says Bansal. “Especially when most of the industry has missed 2025 targets. If we lose another year, then we’ll certainly miss the 2030 targets as well.”
The author contributed to the UN Fashion Industry Charter for Climate Action’s ‘Fashion’s Supply Chain Challenge’ report. The proposed solutions referenced above were developed separately by the manufacturer peer action group within the charter.
Correction: MAS Holdings has paused its solar expansion plans for this year, not its 2030 sustainability plan as previously stated (19/08/2025).
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