Fashions Confuse Climate Mathematics, Explained

Imagine you are the supply chain director of a multi-billion dollar fashion brand.

Your company has set ambitious goals to reduce its emissions that contribute to global warming. This made your job more complicated. The supply chain, which you oversee, is where most of your company's climate impact occurs. This is also where you have the least control because you don't own the factories that make your fabrics, the facilities that dye your fabrics, or the factories where your products are sewn.

This is a prodigious problem, so you will tackle it little by little. This season, the focus is on reducing carbon emissions associated with fossil fuel boilers used in the denim dyeing process. A supplier presents you with two options (both with the same capital and operating costs), only one of which it can finance:

• Option 1: In a facility, the supplier may replace a very old natural gas-fired boiler with a newer version. The old boiler can process one pair of jeans per cubic meter (m) of gas and the new, more efficient boiler can process two pairs per m.
• Option 2: In another installation which was already using the new generation boiler, the supplier is proposing to install an even more efficient version which would increase production from two pairs of jeans per m to five units per m.

You'll need to process 1,000 pairs of jeans in each factory to meet your production quota, and the choice seems obvious. With option 2, you get three additional units per cubic meter of gas burned; with option 1 you only get one.

But this is where fashion’s climate calculations stop making intuitive sense; Even though Option 2 appears to have more impact, Option 1 will actually result in greater emissions reductions.

Let me explain it to you:

Your supplier's first boiler upgrade, the one that gives you just one extra unit per m, results in a healthy $500 million reduction in your supplier's natural gas consumption per 1,000 units produced. The second upgrade only saves 300m.

This is the fashionable calculation of decarbonization; The more efficient production becomes, the more difficult it is to achieve energy and emissions savings. In other words, the relationship between effort and impact is a non-linear relationship of diminishing returns.

Decoding climate trends and mathematics

The same calculations are evident in almost all industry decarbonization efforts.

When brands and manufacturers get started, emissions reductions can be quite rapid and cost-effective. This is the realm of low-hanging fruit. For example, factories can switch to more efficient LED lighting, reducing their energy consumption, often achieving a return on investment in less than a year.

But more ambitious projects, like retrofitting boilers to make them more efficient or running them on less carbon-intensive fuels, typically cost more and deliver savings more slowly, if at all. For factories to completely transition away from carbon-intensive fossil fuels requires massive investment and government action to shift national grids toward renewable energy.

Two additional factors further complicate the calculations of decarbonization of modes.

First, the impact of climate change, the end result of current polluting industry practices, is being felt harder and faster than expected. Temperatures in many of Asia's largest fashion manufacturing centers reached 40 degrees Celsius in April and May. In parts of India and Pakistan, temperatures exceeded 50 degrees. These extreme heat events are becoming more common, more intense and lasting longer. The industry will have to adapt to this grim climate reality, which has serious consequences for the health of workers, productivity and the general functioning of factories. That means air conditioning plants, according to an Asia-based sustainability manager. But efficient cooling will come with a high energy bill, adding to emissions from fossil fuel-dependent factories, just as the industry attempts to decarbonize.

Finally, even when companies succeed in reducing their emissions, this progress is often offset by continued growth. This is why, a former head of sustainability at a multibillion-dollar brand told me, no fashion brand with strong, science-based climate goals is able to achieve them.

The consumer conundrum

A similar nonlinear calculation comes into play when looking at the other side of this equation: consumer demand.

For many years, the industry has announced its pursuit of sustainability goals on the assumption that this would attract buyers. Indeed, surveys often ask consumers to rate their environmental concerns from one to five, and over time, the results of these exercises indicate that climate concern is increasing. But this has not directly translated into changes in purchasing behavior.

If all of this makes your head hurt, you're not alone. The human brain tends to think in straight lines, so these complex, non-linear relationships are literally mind-boggling. (If you want to understand this better, read this excellent analysis Since The Harvard Business Review, which helped shape my thinking on the subject). This also helps explain why achieving environmental sustainability is a significant challenge.

Yet if the gap between consumer intention and action reduces pressure on brands and decarbonization proves more difficult and costly than expected, the prognosis for voluntary progress is bleak. This calculation is immutable, even if it is counterintuitive.

This is precisely why sensible policy is needed to impose and encourage measures of minimum social and environmental standards that could tilt the climate calculations further in favor of action.

This is not simply because survey participants are rarely completely honest in their responses. It's also because the relationship between consumer attitudes and behavior follows a curve, not a straight line, as efforts to reduce emissions do.

In fact, academic research watch little or no difference in behavior between consumers who, on a five-point scale, give their environmental concern the lowest rating, one, and those who give it a rating of four. But the difference between four and five is huge.

In other words, only those who care most actually act on their values.

Kenneth P. Pucker is Professor of Practice at Tufts Fletcher School. He worked at Timberland for 15 years and served as director of operations from 2000 to 2007.