At THE ICONIC, we are committed to mitigating our climate impacts and contributing to the creation of a lower carbon world. We’re growing our business and reducing emissions in line with our Group’s Science Based Targets.
To create positive change, we must take ownership of the emissions associated with our business activities throughout our entire supply chain.
We’re already working to improve our energy efficiency and continuing to source renewable energy in our operations, exploring lower emissions options in our logistics, and actively increasing the use of materials recognised as ‘preferred’ in our supply chain. We also recognise that product manufacturing, transportation, and product use and disposal makes up 99%+ of our footprint. With clear targets and programs, we’re turning climate ambition into climate action.
- Sourcing 100% renewable energy for our fulfilment centres and hubs.
- Increasing our own brands and branded products that are made in line with our Considered Product Criteria, to 50% of our assortment. For example, products made using preferred fibres, products using lower impact production methods such as sourcing from Leather Working Group certified tanneries, as well as increasing products that are Pre-Loved or Repaired.
- Prioritising the adoption of low emissions delivery methods such as road transportation rather than air for interstate deliveries.
When we talk about carbon emissions in relation to our business, we refer to the amount of greenhouse gases (GHG) emitted by our organisation and its activities. Greenhouse gases (which include carbon dioxide and methane) can be generated through a number of human activities such as the burning of fossil fuels and the production and consumption of food, manufactured goods, materials, buildings, transportation and other services. (For scope definitions, see our Glossary.)
Emissions Breakdown
In 2019, we measured our company’s carbon emissions (a.k.a carbon footprint) for the first time including Scope 1 (direct), 2 (indirect) and 3 (indirect from the value chain) emissions, and we have continued to do so annually. As part of this ongoing emissions calculation, we look at how goods are manufactured and transported between our location and that of our customers, as well as how the products are used and eventually complete their life-cycle. The current impact of our own operations (Scope 1 and 2) represents less than 0.05% of our overall footprint with most of our emissions associated with product manufacturing (~75%), logistics (~3%) and product use and end-of-life (~21%).
Our Climate Action Programs
We are in an urgent climate crisis and it's critical that all industries take responsibility for their carbon impacts by implementing tangible actions to combat climate change. We take ownership and accountability of the emissions associated with the ongoing business activities across our operations and supply chain through the work that underpins our Climate Action programs.
We are committed to ensuring that the operational sites we directly manage are as efficient as possible to minimise our energy footprint. Since 2020, we have transitioned to LED lighting across most of our Production Hub and Fulfilment Centres. We have also included the use of motion-sensor lighting in some areas, so that the lights are only on when people are using these spaces. At the beginning of 2022, we completed the installation of a 350 kW rooftop photovoltaic system, which contributes to 26% of the electricity needs of our Fulfilment Centres. The majority of the electricity demand across our sites is met through the purchase of Green Power, which is 100% renewable energy certified under the Australian Government's managed accreditation program. We are committed to ensuring that we continue sourcing renewable energy either produced on-site or from the grid.
As a pure-play online retailer, logistics and product transportation across our supply chain, and order delivery to our customers accounts for approximately 3% of THE ICONIC's overall emissions (according to our latest footprint). Every wholesale product that reaches your doorstep is first sent to our Fulfilment Centre by our brand partners where it is received, prepared and stocked. Similarly for Marketplace items, the seller will send their items to the warehouse they work with to dispatch their orders. It’s then shipped to you, with some of these products being returned. All journeys generate varying amounts of emissions based on a number of factors including the type of vehicles and fuels used, the product weight and the distance travelled.
THE ICONIC boasts an incredible curation of local and international brands on site, however, international brands come with a high inbound logistic footprint due to air freight (air freight has been found to generate 47 times more CO2e compared to sea freight). We are committed to ensuring the share of products transported to us via air freight remains low (currently at 2.9%) through increased stock consolidation, upfront planning and leveraging our hybrid shipping model (part air freight, part sea freight) at its maximum capacity.
THE ICONIC’s world-class delivery is a fundamental component of our customer experience. THE ICONIC does not own any delivery vehicles or distribution fleet, which means the emissions of our transport carriers sit within our supply chain and are not directly within our control. However, we remain jointly accountable for these emissions. We are working with our carrier partners to enable lower emission last mile delivery methods (the delivery from the last distribution centre to your doorstep), for example, electric vehicles, bikes, walking deliveries. We are also exploring the introduction of cross-docking, which will enable us to consolidate some or all Marketplace orders into one parcel before being sent to our customers. This will also help reduce the amount of packaging used to send multiple Marketplace orders to one customer.
We can all make a difference! Research has shown that standard delivery options emit fewer emissions per parcel compared to express and same day delivery options
Why the difference? Slower deliveries allow our partner carriers more time to plan and consolidate parcels that are going to the same place, meaning more parcels can be sent in each trip resulting in more efficient transportation. Choosing a slower delivery option for certain interstate deliveries also allows us and our carriers to ship your order on a truck via road freight instead of using a plane, which helps to reduce the carbon impact of our deliveries.
The majority of the fashion industry’s emissions come from raw material production, preparation and processing needed to create products. This means that the products we sell (all products, not just THE ICONIC’s Own Brand products) contribute to the largest share of our overall emissions at 64%. These emissions are mostly associated with the raw material sourcing stage (e.g. during the farming process) and the material processing stage (e.g. during the washing and dyeing of fabric). In order for us to tangibly reduce our impact on the environment and significantly reduce our overall emissions, we must work collaboratively with our suppliers. We’ve commenced with work through transitioning our materials to preferred options, however, we know there is more work required to reduce our product impacts during the production and processing stages.
To better understand our Own Brand product and material impacts, we conducted an initial formal analysis of our materials in 2018 to ensure we prioritised focus on our most significant environmental impacts. Since then, we have developed and used various analysis tools to compare environmentally preferred materials to assist our buying teams in transitioning the materials used in our Own Brand products away from conventional alternatives. The process to identify these preferred materials took greenhouse gas emissions, water quality, land use, and human toxicity into consideration.
We recognise that the science and research into materials and their environmental impacts is always evolving, so our methods for assessing preferred fibres are constantly evolving to ensure we stay aligned with industry standards. In 2024, we’re launching an updated version of our Considered Product Criteria tool, which has been informed by external sources including the Textile Exchange’s Preferred Fiber & Materials Matrix.
Our Considered Product Criteria tool will recognise products from both our Own Brands and Third Party Brands that are:
- Made of preferred materials or use a production process certified through a third party Certification, Trademark or Program.
- Products that take social, ethical or environmental impacts into consideration during sourcing or production.
- Products that are made using non-animal alternatives, or those made with natural and organic ingredients.
- Products that are given an extended life by aligning with circular principles.
You can learn more about the Considered Product Criteria here.
Transitioning our assortment to products that meet our Considered Product Criteria is an important part of our carbon reduction strategy, as well as the commitment we hold for our customers to enable them better choices. In 2023, over 26% of Own Brand cotton was sourced as either Organic, Recycled or Australian Cotton. Almost 20% of our Nylon and Polyester was Recycled and 24% of Cellulosic fibres were from responsibly forested sources.
We recognise that THE ICONIC has greater accountability for the environmental impacts generated by the factories that produce our Own Brands. We are committed to increasing the visibility and management of the environmental impacts within our direct supply chain (including energy, water and chemicals) in order to reduce our footprint and preserve natural resources.
According to an internal assessment completed in 2022, only two of our active Own Brand factories (55 at the time of the review) used some renewable energy for their processes, and in both cases the renewable energy was generated on-site. In order to achieve our ambitious target of 90% of renewable electricity used across our factories by 2030, we will further investigate the local opportunities for renewable energy transition across our main sourcing countries, and start to engage and educate new and existing suppliers.
In 2021 we were part of a Group-wide Water Footprint Analysis conducted in collaboration with the Water Footprint Implementation (WFI), which mapped the water footprint associated with our Own Brand apparel and footwear, and by further investigating the outcomes we will set ourselves tangible goals and targets. We know this area needs more effort and we will work on deepening our knowledge and improving our performance as part of our continuous improvement and progress.
THE ICONIC seeks to continue to improve chemical management in manufacturing and to promote responsible use of chemicals. As an initial step, we have embedded a Chemical Standard and Restricted Substances List outlining the requirements our suppliers must adhere to. This includes our Manufacturing Restricted Substances List, which is consistent with industry standards and that of many other retailers. THE ICONIC expects all suppliers to undertake due diligence to ensure that these standards are being met, including in their own supply chains.
