A recent report by Planet Tracker urges brands to adopt comprehensive water management strategies, including setting targets, collecting data, and supporting suppliers to transition to more sustainable practices.

According to the report, the fashion industry requires over 700 gallons of water to produce a single T-shirt, while the production of cotton—a staple material in the fashion world—requires a staggering 2,100 gallons of water for every 2.2 pounds of cotton lint. Despite these figures, only a fraction of fashion companies are actively reporting their water impacts, with just 15 out of 29 companies studied disclosing their data to the Carbon Disclosure Project.

Richard Wielechowski, Senior Investment Analyst, Planet Tracker, emphasises the urgent need for the industry to recognise water as a material risk to their profits and revenues. He calls for a shift in attitude towards water stewardship, urging companies to prioritise water conservation efforts across their supply chains.

Indeed, the ramifications of water scarcity are already being felt, with cotton prices soaring by 30 per cent globally in 2022 due to water-related stress. Yet, many brands remain oblivious to the impending crisis, with water risks rarely featuring in earnings calls or capital markets events.

Amidst this backdrop, companies like H&M are taking proactive steps towards water sustainability. H&M has set ambitious water targets focusing on efficiency, discharge, withdrawals, and pollution reduction. By signing onto initiatives like the UN Global Compact CEO Water Mandate, H&M is leading the charge towards more responsible water management practices within the industry.

However, the challenges ahead are formidable. With 67 per cent of the world's cotton expected to be grown in areas of extreme water stress by 2030, the fashion industry must confront the harsh reality of its environmental footprint, emphasies the report.