Zara owner Inditex’s transport emissions jump in 2024 #CanadaFinance

By Helen Reid

LONDON (Reuters) -Zara owner Inditex’s emissions from transport jumped by 10% in 2024 as the fast-fashion retailer used more flights to move clothes from production centres in Asia to its logistics hub in Spain and into stores.

The increase highlights the impact of greater air freight use as attacks on container ships in the Red Sea have diverted vessels from the Suez Canal route to a much longer route around Africa to transport products from Asia. Companies’ emissions from shipping have also increased as a result.

In its annual report published on Friday, Inditex said emissions from upstream transportation and distribution were 2,614,230 tonnes of carbon dioxide equivalent (CO2eq) in its 2024 financial year ending January 31, up 10% from 2,378,464 tonnes in 2023.

Inditex did not give a reason for the increase. “Sea and road transport are by far the most significant methods used to ship our garments,” a spokesperson said in response to Reuters’ questions about the increase.

Reuters reported in November that Inditex sharply increased its use of air freight to bring products from factories in India and Bangladesh, two key manufacturing hubs, to its Zaragoza logistics hub in Spain to avoid shipping delays that could hamper its ability to get on-trend clothes into stores fast.

Inditex has previously said it is working hard to reduce transport emissions through measures like alternative fuels and optimising routes and container occupancy levels.

An Inditex spokesperson said its transport emissions have increased at a slower pace than sales.

But compared to the amount of products, transport emissions increased at double the rate. Inditex used 678,596 tonnes of raw materials overall in 2024, up 5.1% from the 2023 total, according to the report.

The retailer, which also owns brands including Bershka, Pull & Bear and Massimo Dutti, on Wednesday reported a 10.5% currency-adjusted increase in sales for 2024, to 38.6 billion euros ($42.06 billion).

Its overall greenhouse gas emissions were flat in 2024 compared to 2023, thanks to a decline in emissions related to product sourcing, its single biggest emissions category.

Emissions from “purchased goods and services” declined by 6%, to 6,696,995 tonnes of CO2 equivalent from 7,102,152 tonnes, which Inditex said was thanks to buying more textiles that have a lower environmental impact. Inditex said 33% of its fibres and raw materials came from recycling of post-consumer waste in 2024, up from 18% in 2023.

However, the retailer has made no progress towards its target of cutting indirect emissions, which includes the purchased goods and services category.