Inditex, the owner of fashion giant Zara, is taking to the skies in a big way. To combat shipping delays caused by unrest in the Red Sea, the company has significantly ramped up air freight for garments produced in India, a key supplier. This shift raises concerns about Inditex’s commitment to sustainability, as air travel generates substantially higher carbon emissions compared to traditional sea freight.
Data Unveils a Dramatic Shift:
- Inditex airlifted 3,865 consignments from India in the past year, a 37% increase.
- Notably, 3,352 of these shipments occurred after January 1st, coinciding with heightened attacks on Red Sea container ships.
- The share of air freight in Inditex’s India shipments skyrocketed to 70% in the first eight months of 2024, compared to 44% the previous year.
Environmental Concerns Take Flight:
This increased reliance on air freight poses a threat to Inditex’s ambitious goal of halving “Scope 3” emissions (indirect emissions) by 2030. The company’s transport emissions have already surged by 37% year-on-year, and air travel is a major contributor.
Investors Divided on the Takeoff:
The situation presents a dilemma for investors. While some support Inditex’s use of air freight to avoid stockpiles and potential discounts, others urge the company to prioritise sustainability. “Shareholders for Change” advocates for detailed air freight emission figures and concrete reduction strategies.
Inditex Responds with a Mixed Message:
The company acknowledges its reliance on sea freight for most Asian products but justifies air travel in “exceptional circumstances.” Inditex emphasises efforts to minimise emissions through alternative fuels, route optimisation, and improved load factors.
The Wider Industry Trend:
Inditex’s actions reflect a broader trend within the fashion industry. Spanish Trade Agency data reveals a 28% increase in the value of air-freighted fashion goods to Spain over the past year.
The Landing Gear: Can Inditex Navigate Sustainability and Efficiency?
Inditex faces the challenge of balancing profitability with its sustainability goals. Increased reliance on air freight necessitates significant reductions elsewhere in the supply chain, such as material production. The company must navigate this complex terrain to achieve a smooth landing on its environmental commitments.
