New Research Reveals the Textiles Industry Neglecting E and S of ESG
Textile industry shareholder meetings are too focused on governance, to the exclusion of environmental and social proposals, according to new research by financial think tank Planet Tracker.
Of the 1,198 ESG proposals submitted to the annual shareholder meetings of retailers in the Planet Tracker universe since 2015, 87% were on governance issues whilst social and environmental proposals accounted for just 11% and 2% respectively.
The research has found that key industry issues, such as fibre mix do not appear to be widely raised in stakeholder meetings. Investigations into the data found no proposals which included key terms such as fibre, biodiversity, deforestation and synthetic, to name a few, suggesting that this crucial topic is being neglected.
Furthermore, the report found that only a small number of shareholder proposals on textiles sustainability issues have been advanced over the past few years, but all have been voted down.
The report concludes that the textiles industry needs to make significant changes to move to a sustainable model and calls on investors to promote corporate focus on two priority areas:
- Fibre mix – Moving the industry towards a more circular fibre mix rather than synthetic fibres based on fossil fuels which are heavily relied on by the industry
- Supply chain investment – Much of the environmental damage associated with textiles occurs in the supply chain. Fashion brands must work with suppliers to lessen environmental impact
Richard Wielechowski, Senior Investment Analyst and Head of the Textiles Tracker at Planet Tracker comments: “It’s clear that the textiles industry needs significant operational changes and investment to move it towards a sustainable environmental footprint. Investors can play a crucial role by pressuring corporates to provide specific details about how they are dealing with key issues such as supply chain and fibre mix.
“Bringing votes to shareholder meetings is an important way for investors, and the rest of society, to help shape the way that the industry approaches key environmental and social proposals and hold them to account on results.”