The Clearance Rack Has a Terrible Carbon Footprint, Gap CEO Says

(Bloomberg) -- The vast supply chain that produces and sells clothing has a massive carbon footprint. That makes the clearance rack a problem, says Gap Inc. Chief Executive Officer Art Peck.

The carbon footprint of a blouse with an unpopular print that ultimately sells for 99 cents is “inexcusable at the end of the day,” Peck said at the Bloomberg Sustainable Business Summit in Seattle on Thursday.

The Clearance Rack Has a Terrible Carbon Footprint, Gap CEO Says

The materials for a single piece of clothing often travel the world multiple times -- through warehouses and distribution centers -- to get to a store. And if a consumer doesn’t want it, that’s all for basically nothing, Peck said.

Companies have to solve “the mismatch between what’s bought and what’s wanted,” he said. Reducing the waste with better predictive analytics and artificial intelligence could be one of the best ways for retailers to cut their carbon footprint and save money at the same time, he said.

In the 30 years since “fast fashion” became a prevailing trend in retail, almost all of the industry’s economic growth has come from nonsustainable polyester-based products that began life in an oil well, he said.

Recycling Cotton

Most clothing isn’t recycled at the end of the day, and even lots of donated clothing ends up ultimately in landfills. Gap, which uses about 1% of the world’s cotton, is working on the problem, Peck said.

The company will debut jeans this year with about 5% recycled cotton, Peck said. Cotton is a water-intensive crop that takes away available land for food, so fashion companies need to figure out how to reuse it, Peck said. But it’s hard for consumers to recycle the material because many fabric mills are overseas in Asia.

The company also faces other challenges in pursuing sustainability, such as the emissions from e-commerce shipping.

For consumers, buying sustainable clothing isn’t yet a must-do, Peck said. For instance, they won’t buy ugly jeans to save the Earth. But retailers have to prepare for a day when shoppers will demand sustainability, he said.

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