Indian textile companies are steadily improving their sustainability performance, especially in renewable energy adoption and carbon reduction. However, gaps remain in water use, waste management and Scope 3 emissions reporting, according to a report by ICRA ESG.
Renewable energy share in textile sector rises
The report says that the average share of renewable energy in the sector’s total energy consumption rose from about 14% in FY23 to nearly 18% in FY25.
Apparel companies led with an increase from 26% to 28%, aided by the feasibility of rooftop solar for electricity-driven operations like cutting and stitching.
The yarn and fabric segment showed the sharpest relative improvement, climbing from 3% to 8%, driven by leaders scaling up solar and biomass-based solutions, it stated.
The integrated segment advanced from 17% to 21%, supported by bulk green power contracts and captive solar investments by large composite units.
Energy intensity rises 6–8% despite shift to renewables
Despite this shift toward cleaner energy, the energy required to generate each crore of rupees in revenue increased by 6–8% compared to FY2023, it stated.
The apparel segment saw a notable 28% rise in energy intensity, attributed to scaling production and a higher share of premium, energy-intensive finishing processes.
The yarn and fabric segment, the most energy-intensive, posted an 8.5% overall increase, with a spike in FY24 linked to revenue contraction and higher operational energy use, it stated.
The integrated segment’s energy intensity remained relatively stable, rising only 6%, supported by investments in waste heat recovery and process automation.
Emission intensity falls in key textile segments
Greenhouse gas emission intensity, however, declined in some segments, indicating efficiency gains and a gradual fuel shift, it stated.
Integrated companies reduced emission intensity by about 5%, and yarn and fabric firms by about 8%, it stated.
The apparel segment recorded a 12% increase in emission intensity, driven by higher production volumes. Disclosure of indirect Scope 3 emissions, which cover value chain activities, remains low across the board.
Only 21% of the sampled companies reported Scope 3 data in FY2025, with the highest coverage in the integrated segment at 29%, followed by apparel at 20% and yarn and fabric at 14%.
Textile sector needs faster ESG push to stay competitive: ICRA
Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings, said in the statement, “The textile sector’s sustainability transition is underway, but the pace must quicken. For players that are part of global value chains, achieving higher ESG maturity will support competitiveness in the longer run. Implementation requires investment in advanced technologies and renewable energy solutions. Targeted upstream interventions would ensure that India’s textile leadership thrives in a sustainability-driven world.”
The report states that energy-heavy upstream processes like spinning, weaving, and wet finishing continue to drive the sector’s energy and emission footprint.
It calls for more captive renewable energy projects, efficiency measures, and improved Scope 3 reporting to align with global standards, it stated.
The findings are based on a review of 19 major textile firms, including Page Industries, Welspun Living, Arvind, and KPR Mill, from FY2023 to FY2025.
