Russian oil linked with polyester supply chains

LONDON – A new report has uncovered evidence that Russian oil is fuelling major Asian polyester manufacturers which supply many of the world’s leading fashion brands. Researchers found evidence that two major manufacturers – and likely more – have boosted their imports of Russian oil since the war in Ukraine broke out and are supplying polyester to fashion retailers, either directly or indirectly.

The report focuses on two major global suppliers of polyester, India’s Reliance Industries and China-based Hengli. It claims Reliance Industries cashed in on the sanctions on Russian oil, with customs data analysis by the Changing Markets Foundation showing the monthly average landed import value of Russian oil by Reliance is up 10-fold since April.

Brands buying synthetic fabric made by Reliance Industries include a combination of luxury, high-street, fast fashion, sports, and low-cost brands and retailers. The supply chain links found were both direct, including Esprit, Next, Benetton and New Look.

Indirect links for brands such as Boohoo, C&A, H&M, GAP, Hugo Boss, Mango, M&S, Nike, Primark, Target, Tesco, Sainsbury’s, North Face, Wrangler and Zalando, were revealed through manufacturing supply chains.

For Hengli, the report does not link oil imports directly to the business. Rather it notes that China’s imports of Russian crude oil are up 55 per cent in recent months. The report authors told us: “Hengli … has been one of the beneficiaries of a 49 per cent increase in crude oil quotas to non-state Chinese refiners, of which Hengli is the largest quota, the majority of which is coming from Russian oil.”

The investigation found supply chain links between a number of brands and Hengli. They also point to plans by Hengli to invest US$20bn to turn coal into polyester yarn. “That means that major fashion brands are not only at risk of selling polyester made from oil from the world’s biggest emitter, but also from coal in the near future,” state the authors.

The report also noted that many leading fashion brands which claim transparency refused to disclose details of their polyester supply chains.

Of the brands that responded to Changing Markets’ questions about their synthetic suppliers, 26 out of 31 (84 per cent) provided, “scant details on their synthetic suppliers.” Several companies provided no details on synthetic suppliers at all, including retailers Asda, Sainsbury’s and Tesco, high-street retailers Inditex and Uniqlo, online retailer Zalando, sports brand Puma and luxury companies Burberry and Kering.

Just 4 out of 31 brands that responded (or 7 per cent of all brands included in the research), sent the Changing Markets Foundation their synthetic supplier lists. These brands were Levi Strauss & Co, Next and Reformation, with Boohoo only sharing their recycled synthetic supplier lists.