Cashing in on Circular Economy Opportunities in Textile Industry

Textile is at the vanguard position as innovators and industry leaders navigate sustainability challenges and opportunities. After more than a decade of gradual growth in the use of the term environmental, social and governance (ESG) from its inception in 2006, traction has zoomed dramatically over the past few years. Assessing socially responsible investment has become instrumental for textile manufacturers and investment managers to quantify the business value of sustainability risks and opportunities. In July 2023, the European Environment Agency inferred that textile consumption in the EU led to a carbon footprint of around 270 kg (per average person).

The textile industry is infamous for being the major source of waste and pollution, aggravated by overproduction and overconsumption of clothes and poor working conditions. It is high time regulators and businesses capitalize on the prevailing opportunities stemming from the circular economy.

Concerted efforts toward integrating ESG scope in manufacturing, sourcing, processing, packaging, and fabric care can provide the silver bullet amidst the release of harmful effluents. The urgency for decisions and actions to underpin energy management, water management, sustainable product development, waste reduction, employee health & wellbeing, labor management, social opportunity, board diversity and business ethics can steer manufacturers’ trajectory towards a circular economy.

Investors and other stakeholders are taking significant strides against the backdrop of the unprecedented health and economic impact of the COVID-19 pandemic. Commitment to ethical production, transparency and sourcing of raw materials could be pronounced in the ensuing period.

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Solvay Becomes Future-Ready with Environmental Footprint Reduction

At a time when watchdogs, such as the Intergovernmental Panel on Climate Change (IPCC), have warned of surging global temperatures, leading companies are leaving no stone unturned to surmount the prevailing challenges and environmental threats. To illustrate, Solvay is contemplating minimizing the environmental impact of its operations by 2030 (at a planetary scale). The chemical company reportedly has 59 emission reduction projects and it has raised the 2030 GHG emissions reduction target to 30%. Furthermore, the Belgian company has an audacious carbon neutrality target for scope 1 & 2 before 2050, while the company has revved up efforts toward net zero emissions—with a target to cut scope 3 GHG emissions by 24% by 2030.

DBL Group Prioritizes Workforce Culture and Community

Incumbent players are reflecting and fostering diversity and a culture of meritocracy & inclusivity, making the diverse spectrum of identities, experiences and perspectives a force to reckon with in the work culture. Macroeconomic and sociopolitical challenges have furthered the need for assessment of labor practices and grievance mechanisms. For instance, DBL Group has reinforced efforts on the Tree Plantation Program and emphasized the Zero Discharge of Hazardous Chemicals Program to enhance the quality of wastewater discharged through the Effluent Treatment Plants (ETPs), minimizing the negative impact on the community.

The Bangladesh-based company has a bullish target of having 20% female employees at the management level by 2025—it claims to be one of the fifteen companies listed by the UN Global Compact that are officially involved in Target Gender Equality, contributing to Sustainable Development Goal 5.5.

INVISTA Invests in Corporate Governance

Textile behemoths, regulators and consumers have furthered their focus on business ethics, anti-competitive practices, tax transparency, board pay, corruption & instability, financial system instability and board diversity. Predominantly, INVISTA has emphasized compliance and accountability, while its code of conduct places responsibility to conduct commercial activity with integrity and lawfully. Moreover, it has internal processes to identify, assess, resolve and manage risks that may stem from the interpretation of tax law or the nature of compliance obligations. The company has also fostered its efforts to resolve conflict of interest, suggesting reporting to compliance and ethics resources or a supervisor.

Whether it is bridging a gender gap, propelling a vibrant workforce, measuring sustainability performance, or tracking progress, the use of ESG tools and software will become second to none to attain sustainability goals and enhance workflow. For instance, streamlining internal audit processes across business units can be the backbone of a robust company structure.

Right Time to be the Innovators and not Laggards

Forward-thinking organizations are gearing up to be the leaders within the industry—a commitment to transparency, sourcing of cotton and fibers and efforts on ethical production—may place them cut above the rest. Textile companies and brands are injecting funds into sustainability and innovations. The growth outlook appears to be robust. The global textile market size was pegged at USD 1,000 billion in 2020 and it is slated to expand at around 4.4% CAGR from 2021 to 2028. The projection alludes that the time is ripe for manufacturers, suppliers and other stakeholders to embrace ESG to stay ahead of the curve.

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