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Environmental Impact Score for Clothing
By Christie Renner

How much does a new pair of jeans really cost? Jeans are generally made from cotton, one of the crops most heavily sprayed with pesticides. Following cultivation, additional chemicals are often added as cotton is spun into thread and turned into clothing. These chemicals can include formaldehyde, chlorine, synthetic chemical dyes made with heavy metals, and flame retardants. When human health and environmental contamination are factored in, the price of fashion soars to new heights.

As an example of waste water problems from textile manufacturing, the New York Times writes of blue dyes washing downriver near jean production mills in China. Additionally, the energy used by such mills contributes to China’s deplorable air quality and high rates of respiratory problems. Cotton is a very thirsty crop, and its production has been the primary contributor to the shrinkage of the Aral Sea in Central Asia and the loss of nearly all of the marshes and wetlands around it.

Increasing awareness of the problems, combined with greater consumer pressure for green products, has led clothing companies to join with environmentalists to create the Sustainable Apparel Coalition. A primary goal of this new coalition is “to lead the industry toward a shared vision of sustainability built upon a common approach for measuring and evaluating apparel and footwear product sustainability performance that will spotlight priorities for action and opportunities for technological innovation.”

For an industry that employs more than 60 million workers worldwide, measuring sustainability is no small task. The coalition outlines five categories, for which they intend to develop metrics and measure improvements: water use and quality, energy and greenhouse gas emissions, waste, chemicals/toxicity, and social/labor. Their Sustainable Apparel Index V1.0 will begin as a series of indicators with the intent that it evolve quickly to become a metrics-based tool.

According to the Times, the group plans to develop a sustainability score from these metrics to display on clothing. The coalition represents about 60% of global apparel sales and includes large retailers Nike, Target, Wal-Mart, JC Penney, and Levi Strauss, as well as companies with an established reputation for sustainability leadership, such as Patagonia and Timberland. Other collaborators include Duke University, the Environmental Defense Fund, Verité, and the EPA.

This kind of market share and stakeholder representation holds real promise for change. When the world’s largest retailers demand clothing production with fewer chemicals, the environment benefits, as do workers and consumers. And when suppliers are required to be more transparent in their operations, best practices can spread more quickly and become standard operating procedure throughout an industry.

Providing consumers with better information leads to more informed purchasing decisions. Greater disclosure will also help investors that consider environmental, social, and governance (ESG) criteria in their investment decision-making. Stakeholders will be watching to see if this initiative leads to real change in the long term price of fashion.

Mention of specific securities should not be considered an offer to buy or sell that security. For information on the suitability of any investment for your portfolio please contact your investment advisor.

Posted: March 11, 2011