World Reimagined: The Hidden Environmental Costs of Clothes, and How Companies are Addressing It

Over the holidays, unsuspecting people all over the world became the hapless victim of well-intended clothing gifts, many of which unfortunately belong in the “wouldn’t be caught dead in it” pile, unaccompanied by a gift receipt. Is it any wonder UPS sees one in four Americans making a return following the 2021 holiday shopping season, with 41% of those making a return planning to return three or more items? Others may also be invoking Marie Kondo, resolving to clear out the clutter in their closets. Most of us have items whose disappearance would be a net positive.

Here, we look at the hidden environmental cost of what’s in our closets, what is being done to address it, and suggest some candidates for investors to add to their stock portfolio.

Every year, roughly 20 pieces of clothing are manufactured for every person on earth. Worldwide clothing production doubled from 2000-2014, and the number of per capita garments purchased grew by around 60%. According to data from Kantar, a consumer in the U.S. purchases around 65 items of clothing a year, and a consumer in the U.K. buys around 50 items a year. However, consumers are holding onto their clothing today for about half as long as they did 15 years ago, with some estimates suggesting that the lowest-priced garments are treated as essentially disposable, usually tossed after less than ten wears.

An average consumer throws away 70 pounds of clothing per year. Globally we produce 13 million tons of textile waste each year, 95% of which could be reused or recycled.

An estimated 84% of clothing ends up in landfills or incinerators. According to Roadrunner Smarter Recycling, the volume of clothing that Americans toss out each year has doubled in the past twenty years, from 7 million to 14 million tons, and the average total life span of a piece of clothing in one’s closet is just 5.4 years. According to the EPA, in 2018, 17 million tons of textile waste was added to landfills, accounting for nearly 6% of the year’s total Municipal Solid Waste.

Take Christmas sweaters, once a fad and now…not. How long does it take for them to decompose? To help determine that, let’s first look at some non-biodegradable fibers.

  • Nylon, which is derived from crude oil, takes around 30 to 40 years to decompose.
  • Polyester, which is derived from carbon-intensive, non-renewable, and non-biodegradable resources, sticks around for 20 to 200 years.
  • While post-holiday spandex pants may offer some extra breathing room, spandex is a form of plastic with a questionable time for decomposition that is well beyond a lifetime of New Years’ pledges.

Biodegradable fibers are much gentler.

  • Depending on the blend, wools typically will decompose after 1 to 5 years.
  • Silk takes about four years to decompose.
  • Bamboo takes around a year.
  • Hemp fabric takes between 1 to 8 months to decompose.
  • Garments made of 100% cotton can decompose within 1 to 5 months.

Here’s the problem, this isn’t just about what we toss out.

Cotton is the most common natural fiber in clothing, accounting for about one-third of all fibers found in natural and synthetic textile production. It is also very thirsty. On average, just one cotton shirt requires a whopping 2.7 kiloliters of water, according to the World Resources Institute, which is roughly 713 gallons for all those readers that aren’t savvy in the metric system. That’s akin to the amount of water a typical person drinks over two and a half years. Add onto that the grim reality that while only using around 3% of the world’s arable land, cotton farming accounts for nearly a quarter of insecticide use and over 10% of pesticide use. Once the cotton has been grown, clothing needs to be produced. Roughly one-fifth of industrial water pollution is caused by garment manufacturing. Then there is the carbon footprint, which varies based on the textile.

While synthetic fibers require less water than grown fibers such as cotton, they emit more greenhouse gases. For example, a polyester shirt has an estimated carbon footprint of around 12.1 pounds versus 9.5 pounds for cotton. In fact, the impact of the production of polyester in 2015 was estimated to be roughly equivalent to the annual emissions of 185 coal-fired power plants. Then there is the environmental impact of shipping material and finished products to consider.

The worst offender is likely the most popular garment ever, blue jeans, with more than 4.5 billion pairs sold worldwide every year. A whopping 20,000 tons of indigo are produced annually to get those beautiful blues, and only 225 pairs of jeans can be made from one bale of cotton. On a global level, traditional methods for finishing jeans aggregate annually to roughly 92 million gallons of water, 750,000 tons of chemicals, and enough electricity to power the city of Munich, Germany, for a year. According to Levi Strauss & Coa typical pair of jeans requires about 2,500 liters of water just to be manufactured and expels 32 kg of carbon dioxide.

That’s the bad news, but here is the good news.

Companies are increasingly looking at the environmental impact of their products throughout the entire product lifecycle. Last summer, Levi Strauss (LEVI) launched its WellThread line of 502 jeans in conjunction with the Swedish company Re:newcell, a subsidiary of the Boer Group. Levi claims the line is the most sustainable ever made, using organic cotton (which has a much lower carbon footprint), and Re:newcell’s Circulose, which is partly made from old jeans. Traditional denim recycling results in material that is unsuitable for making new jeans because the process weakens the material too much.

The fast-fashion powerhouse H&M Group (H.M. B: Nasdaq Nordic) is committed to using only recycled or other sustainably sourced materials by 2030 and has started recycling services at more than 4,200 stores to prevent unwanted clothing from ending up in landfills. In 2019 H&M collected 29,005 tons of textiles for reuse and recycling, roughly equivalent to about 145 million T-shirts. Last year the company began a pilot program at its Stockholm store to allow customers to turn their used garments into one of three different clothing items (a sweater, baby blanket, or a scarf), using a machine called Looop. The machine disassembles the clothing, shredding it into fibers that are then used to make the new items. The company reports that the recycling process, which is able to handle more than one garment at a time, uses no water or chemicals. It may sometimes need “sustainably sourced” raw material additions, but H&M is keeping this share as small as possible. The process takes five hours, and shoppers can watch.

Fitness fashion juggernaut lululemon (LULU) is targeting to have at least 75% sustainable materials in its products by 2025 and is taking on the lifecycle challenges through its Like New program in which customers can trade in their used clothing for credit. The returned items are “revived” and resold.

Cotton Incorporated’s Blue Jeans Go Green program collects denim, which is made from cotton so that it can be recycled back into its original fiber state and used to make something new. Unwanted denim can be dropped off at a participating retailer, which includes Levis and Chico’s FAS subsidiary White House Black Market, or can be mailed for free through Amazon-owned Zappos for Good program.

VF Corp (VFC), parent company to brands such as The North Face, Timberland, icebreaker, and Smartwool, will by 2025 have all the cotton it purchases sustainably grown, half its polyester will come from recycled materials, and it will use 100% renewable energy across owned-and-operated facilities. All its leather is finished in Leather Working Group audited tanneries. Today its subsidiary, The North Face, has a Clothes the Loop program that encourages customers to drop off unwanted clothing and footwear at its retail or outlet stores in return for credit towards future purchases. The items that are dropped off are sent to the nonprofit Soles4Souls. Its Timberland brand has a similar program and has a goal to have all its products create a net positive environmental impact by 2030.

Then there are companies like Allbirds (BIRD)a certified B corporation, that are tackling the problem of footwear. According to the company, around 57% of footwear is made from synthetic materials, which means they come from fossil fuels. By December 2025, the company is looking to have 75% sustainably sourced natural and recycled materials and reduce the carbon footprint of its raw materials by 25%, as well as reduce raw material use by 25%. When the company cannot find what it needs, it gets creative and invents something like SweetFoam, a sole material derived from the world’s first carbon-negative green EVA.

Increasingly sourcing is addressed with an eye on sustainability. The eco-friendly Honest Company (HNST) line of baby gear uses only sustainably sourced, 100% certified organic cotton. Gap’s (GPS) Athleta brand is also a Certified B Corporation, and nearly 300 million plastic bottles have been repurposed into its fabrics, and the company claims to have diverted 1.1 million tons of fabric waste from landfills. The company’s Old Navy brand will have 100% of its cotton sustainably sourced by 2022 and will convert at least 60% of its polyester into recycled polyester by 2025.

The bottom line is that what we wear can have a material impact on the environment. The good news is that companies are feeling the pressure to address the full impact of their products, which means over the coming years, consumers can increasingly style themselves with lower environmental costs, and that is a world worth reimagining.

Disclosure: Allbirds, lululemon, and The Honest Company are constituents of the Tematica BITA Cleaner Living Index.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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