Greenhouse Gas Reporting Practices in the Fashion Industry: The Case of Inditex

Master's Thesis in Climate Change Management

The fashion industry is one of the most emission-intense industriesin the world, contributing with 10% of annual global greenhouse gas (GHG) emissions. To limit global warming and climate change related, emissions must be reduced, and the fashion industry has a big responsibility to take part. This thesis aims to evaluate how fashion companies live up to their responsibilities of reporting on and acting towards reducing GHG emissions in the value chain. The Spanish fast fashion company Inditex, owner of brands like Zara, Pull&Bear, and Massimo Dutti, is one of the world’s largest actors in the industry. The company has been publishing annual Non-Financial Reports (sustainability reports) for more than two decades, and with a value chain, including company-owned and supplier facilities, spread across the globe, Inditex is an excellent candidate for a case study on GHG emission reporting practices. Through the evaluation of current reporting standards and practices, and methods for target setting, combined with findings from the scientific literature on the topic of sustainability reporting, the research questions answered are: 1) Using Inditex and their 2021 Annual Report as a case study, does the textile industry deliver according to their responsibilities? And 2) What responsibilities does Inditex have, and how can they be assessed? Reporting on and acting to reduce GHG emissions is a voluntary company practice. A company is free to choose what and how to disclose information, often resulting in non-transparent reports that are difficult for readers to verify. To combat the transparency challenge, a 7-step reporting flow was proposed and checked against the Inditex Annual Report 2021. While Inditex’s starting point is good, with science-based GHG emission reduction targets in line with the Paris Agreement, boundaries defining what parts of the Inditex value chain are included in the targets are lacking and information disclosed is highly dispersed, complicating the evaluation of Inditex’s achievements. As a global leader in the fashion industry, Inditex has a responsibility to be a forerunner in reducing GHG emissions, and a source of knowledge and inspiration for smaller actors. Currently, Inditex is not living up to this responsibility.

GE4-304