Executive summary

As the international climate negotiations draw to a close, this investigation underscores the pivotal role the fashion industry plays in perpetuating fossil fuel dependency and signals a concerning lack of action to break ties with Russian oil – through which the fashion brands are indirectly funding petrochemical expansion and the war in Ukraine.

This report serves as a sequel to our groundbreaking investigation “Dressed to Kill: Fashion brands’ hidden links to Russian oil in a time of war,” published in November 2022, which unveiled, for the first time, the hidden supply chain connections between major global fashion companies and Russian oil. Our findings revealed that Russia is a key oil supplier for petrochemical companies Reliance Industries in India and China’s Hengli Group. These companies produce polyester yarns and fabrics sold to garment manufacturers around the world, who in turn produce clothes for many of the world’s largest brands. Within our research, 39 out of the 50 brands (78%) and their parent companies, including H&M, Inditex, New Look and Next, were directly or indirectly linked to the supply chains of Hengli Group or Reliance Industries. Despite some brands closing stores and suspending sales in Russia following the Ukraine invasion, their reliance on synthetics indirectly contributes to the Russian economy and the ongoing war. Moreover, our prior report highlighted the risk of over 30 major fashion brands sourcing polyester derived from coal in the near future due to their connection to Hengli, which invested $20 billion in a coal-to-polyester project.

In the “Dressed to Kill” report, Changing Markets urged companies to re-evaluate their supplier relationships and cut ties with synthetic suppliers sourcing oil or gas from Russia or intending to produce synthetics from coal. We also called on brands to decrease their reliance on fossil fuels.

One year later, we present an updated report evaluating if fashion companies have severed connections with contentious suppliers linked to Russian oil and coal. Beyond ethical concerns of indirect war funding, polyester is also both driver and a symptom of the destructive fast fashion model, and brands’ dependence on this fibre risks jeopardizing climate targets, as well as exacerbating microplastic pollution, and the waste crisis. With synthetic fibre production projected to increase from 69% of total fibre production to 73% by 2030, it raises critical questions about the fashion industry’s role in perpetuating humanity’s reliance on fossil fuels and contributing to the plastic pollution crisis.

We sent a questionnaire to 43 brands, which comprised 39 companies identified in the “Dressed to Kill” report as having links to Russian oil, along with four other influential market players, identified in our previous investigations. The questionnaire inquired whether the companies have stopped sourcing polyester from suppliers using Russian oil and suppliers planning to use coal. Additionally, it examined their stance on aligning with Changing Markets’ demands for synthetic fibre phase-out, climate objectives and transparent reporting on fossil fuel usage.

Only 18 out of 43 brands (42%) responded to our questionnaire, and just 11 completed the questionnaires – a 26% response rate, the lowest we’ve encountered in recent years. Most companies answered questions selectively, instead of responding to the entire questionnaire. The analysis of responses signals fashion’s lack of action on breaking ties with suppliers using Russian oil, despite the ongoing war in Ukraine demanding urgent action. It also highlights the industry’s reluctance to reduce dependence on synthetic fibres, opting instead to mask this addiction under commitments to boost ‘sustainable’ or ‘preferred’ materials, notably recycled polyester. Unfortunately, the majority of this recycled polyester will be derived from PET bottles, which means that companies are not addressing microplastic pollution and waste problems. Additionally, fashion companies exhibit no noticeable improvements in supply chain transparency, even with impending due diligence legislation on the horizon.

Key findings:

Polyester producers deepen ties with Russian oil in 2023

Following the “Dressed to Kill” report, public sources indicate major polyester producers have deepened their reliance on Russian oil. In March 2023, India became the largest buyer of Russian crude, with Reliance Industries playing a pivotal role. Together with Nayara Energy, it accounted for over half of India’s total crude imports. In other words, Reliance has been war profiteering, buying war-tainted oil at a big discount. Meanwhile, China’s imports surged by 11.7% compared to the previous year, with Hengli Petrochemical receiving significant Russian crude shipments in May 2023 according to shipping data.

Despite sanctions around the world against Russian oil, these trends solidify the bond between fashion companies, polyester producers and Russian oil. This leads to the continued import of polyester products made from Russian oil into countries that have enforced embargoes against Russia.

Fashion companies show insufficient efforts in cutting ties with Russian oil

• Only 13 out of 43 companies responded to the questionnaire about their potential links with polyester suppliers reliant on Russian oil.
• Two companies stand out by saying that they cut ties with Reliance and/or Hengli. Esprit says it has cut ties with both. G-Star Raw, previously linked to Hengli for recycled polyester, states it has ceased sourcing from Hengli and will further restrict suppliers linked to Russian oil.
• While Hugo Boss hasn’t confirmed terminating ties, it told us about its plans to phase out polyester and nylon in all fabrics and linings, including blends, by 2030.
• Four companies – Asda, C&A, Tesco and Zalando – cite a lack of supply chain visibility to justify their inaction. None provided a timeline for complete transparency. The industry’s persistent lack of transparency, despite years of calls to change, appears more like a strategy to evade accountability.
• Three companies – H&M, C&A and Inditex – told us about their strategies to transition away from virgin polyester. They mentioned recycled polyester from plastic bottles and next-generation materials, such as bio-based sources or textile waste. However, the urgency of the situation in Ukraine demands immediate action, rendering their future strategies insufficient to address inadvertent funding of Russia during this critical period.
• Although Shein did not respond to the questionnaire, the prolific ultra-fast fashion brand formed a strategic partnership with Reliance Industries in May 2023. Given Shein’s daily release of around 10,000 products, with polyester comprising 64% of their materials mix, the growing dependence of Reliance on Russian oil suggests Shein will be significantly sourcing from conflict oil.

Polyester from coal not high on fashion agenda

Just 10 out of 43 companies responded to inquiries regarding cutting ties with Hengli and other potential suppliers that plan to produce polyester from coal. Among them, only two companies – Esprit and G-Star Raw – say they have ended their relationship with Hengli.

Recycled polyester distraction

A large majority of companies that answered the question about their plans to phase out synthetics (14 out of 17) plan to shift from virgin to recycled polyester, without making any commitments to reduce or entirely phase out their overall synthetic fibre use. While many brands mention fibre-to-fibre technology as their strategy, none provided a breakdown of this.

What’s next?

On the positive side, global climate talks have brought calls for industries and governments to move away from fossil fuels. Adding to this is an impending surge in global textiles legislation. Over the next two to four years, more than 30 pieces of regulation are expected around the world, targeting import restrictions, product design guidelines, due diligence and more. Such legislation will force companies to improve their practices in some areas.

On the downside, the legislative landscape is still lacking in addressing the issue of synthetic fibres and ensuring genuine transparency. Despite the EU Textiles strategy acknowledging the link between fossil fuel-based materials and the destructive fast fashion model, current legislative initiatives fall short in calling for a phase-out of fossil fuel-based fibres, such as polyester, within the fashion industry. The legislative discussions on due diligence also fall short in ensuring full transparency in fashion supply chains.

Changing Markets urges fashion companies to end their continued or growing dependence on fossil fuels and prioritize the termination of ties with synthetic suppliers procuring oil or gas from Russia. Finally, we urge fashion brands to commit to phasing out fossil fuels from their supply chains and from their material mix. Specific recommendations for fashion brands, retailers and groups, as well as policymakers, can be found at the end of this report.