Many textile brands including Ralph Lauren, Levi Strauss and Victoria Secret are underestimating water-related risks despite it being a key risk factor for the textile industry, a report published by Planet Tracker has revealed.

The report, Exposing Water Risk, analysed 29 top fashion retail companies and found that 90 per cent of the 3,900 documents, transcripts and filings did not mention water-related risks in their content.

Many stages of the textiles manufacturing process use significant amounts of water and the increase in water stress could threaten the production of textiles in many key regions, disrupting supply chains.

The report has highlighted that investors and lenders in the apparel industry are financially exposed to this water-related risk and also warned that concerns are not being raised with investors. Planet Tracker has called on investors in the major apparel brands to include water in their investment strategies.

Richard Wielechowski, senior investment analyst (textiles) at Planet Tracker, warned: "The availability of water is increasingly stressed in many parts of the world due to climate change, inefficient use, and untreated disposal. This could threaten textile production in key regions, disrupting supply chains."

The report did, however, find that the rate of water-related risks being disclosed has risen across the analysed period from around 2,000 disclosures in 2018 to more than 9,000 in 2022, suggesting that companies are beginning to understand the importance that water stress can and will have on the textile industry.

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