Remodelling Fashion: Climate Governance and the Sustainable Energy Transition

Isabel‐María García‐Sánchez, Rizwan Ali, Saudi‐Yulieth Enciso‐Alfaro and Ramiz ur Rehman

Business Strategy and the Environment, 2025, vol. 34, issue 6, 7539-7558

Abstract: The ecological footprint of multinational corporations (MNCs) is a global issue that demands immediate attention. In particular, the impact of the fashion industry has garnered significant concern, as it alone is responsible for approximately 10% of global carbon emissions. Consequently, the adoption of responsible environmental initiatives such as the transition to sustainable energy could play a critical role in mitigating its harmful effects on the ecosystem. In this context, climate governance serves as a key indicator of companies' commitment and performance regarding their climate impact, and it is an essential factor in reducing associated risks, enhancing sustainability and seizing climate opportunities. So, the fashion industry is one of the top contributors to global environmental degradation, yet climate governance within this sector remains insufficiently examined. In this context, the aim of this study is to examine the role that the climate governance of fashion multinationals plays in the adoption of more sustainable and efficient energy models. To address our research question, we analysed the corporate practices of the top 150 MNCs over the period 2016–2022, using dependency models. Our findings show that climate governance structures in the fashion industry favour the use of renewable energy and the investment in various energy efficiency projects to facilitate the transition towards a more responsible energy model. Thus, we identify the significant role of governance in promoting climate action in this sector. Furthermore, our evidence indicates that organisational structures, such as the dedicated environmental management team and the CSR committee at board level, have a significant impact on sustainable energy practices.

Date: 2025
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