Weaving carbon capture into the fabric of retail sustainability
Weaving carbon capture into the fabric of retail sustainability
This article was originally published by BDO USA.
Picture this: You’re in need of a few new shirts to wear on an upcoming holiday, so you pop on your smart glasses and start scrolling. There are plenty of options, but as an environmentally conscious shopper, you aren’t just going to jump on the first item you see. You’ve sworn off certain fast fashion brands, and you make a point of upcycling all your old clothes, gadgets, and more. Sometimes this means it takes you a while to find a product that meets your criteria, but not today. You pause mid-scroll as the phrase “space threads” glimmers across your screen. It looks like your favourite name-brand retailer just launched an entire line of eco-friendly clothing. But what makes it so stellar?
As you read on, you will find that this new space threads clothing line is unlike anything you’ve ever seen before. Made from carbon-negative textiles, this clothing not only minimises carbon emissions but also repurposes those emissions into apparel.
While it sounds farfetched, this future is already becoming a reality. Today, innovative companies and the scientists behind them have devised a process to capture carbon emissions from the air and convert them into cellulose. Cellulose can be used to make fabric. The result? Eco-friendly clothes made from the captured carbon emissions of manufacturers and suppliers all around the world.
One innovative retailer has invested in its own wash house and finishing facility to provide greater control over its environmental impact. This allows the retailer to substantially reduce the environmental impact of each individual denim garment and create products that have environmental stewardship and human health at their core.
In the years to come, the retail industry may see this type of innovation at scale as more companies move to reduce their Scope 3 emissions.
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Stellar sustainability means decarbonising the value chain
Retailers play a major role within the global environmental ecosystem and have an important responsibility to help move the economy toward a more sustainable future. The retail industry is responsible for about 25 per cent of global greenhouse gases, according to research by SaaS platform provider Plan A. Of those emissions, the vast majority, up to 98 per cent, come from retailers’ global value chains. These emissions are known as Scope 3 and include indirect emissions from procurement, transportation, manufacturing plants, and suppliers.
Even though retailers are not yet broadly required to address Scope 3 emissions, those with an eye toward the future should take a strategic position now to quantify their emissions, prepare their operational infrastructure, and consider deploying new sustainability practices.
Australia moves toward mandatory climate reporting
The Australian Accounting Standards Board’s (AASB’s) approval of its inaugural sustainability reporting standards means the reality of climate reporting is a step closer for Australian entities.
The sustainability standards follow the passing of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which mandates sustainability reporting in Australia and empowers the AASB to issue sustainability standards by amending Part 2M of the Corporations Act 2001.
The Corporations Act 2001 sets out requirements for which entities must prepare sustainability reports, and when. There are three different start dates, depending on whether an entity falls into Group 1, Group 2 or Group 3. Sustainability reporting will apply for financial years beginning on or after:
- 1 January 2025 for Group 1 entities
- 1 July 2026 for Group 2 entities
- 1 July 2027 for Group 3 entities.
Our decision tree diagram will assist you in determining whether your entity is subject to mandatory sustainability reporting, and if applicable, which of the three groups it falls into.
This means finding ways to address and reduce emissions, including Scope 1, 2, and 3 types, will be a key competitive differentiator in the years ahead as more consumers demand sustainable products, regulators focus on ESG compliance, and brands seek ways to maintain their edge.
