The sustainability performance of Indian textile industries is continuously increasing, particularly in the areas of carbon reduction and the use of renewable energy. However, an ICRA ESG assessment states that there are still gaps in Scope 3 emissions reporting, waste management, and water consumption.
The percentage of renewable energy in the textile industry is growing
According to the research, the average percentage of renewable energy in the sector’s overall energy consumption increased from almost 14% in FY23 to over 18% in FY25.
Due in part to the viability of rooftop solar for electricity-driven processes like cutting and sewing, apparel industries led with an increase from 26% to 28%.
As a result of leaders increasing the use of solar and biomass-based solutions, the yarn and fabric category had the greatest relative improvement, rising from 3% to 8%, according to the report.
Large composite plants’ captive solar investments and bulk green electricity contracts helped the integrated category grow from 17% to 21%.
Despite the switch to renewable energy, energy intensity increases by 6–8%.
The energy needed to produce each crore rupees in income rose by 6–8% in comparison to FY2023, despite this move toward cleaner energy, it said.
Scaling production and a greater proportion of high-end, energy-intensive finishing procedures were responsible for the clothing segment’s remarkable 28% increase in energy intensity.
The most energy-intensive category, yarn and fabric, had an overall rise of 8.5%, with a surge in FY24 attributed to lower revenue and increased operational energy consumption, according to the report.
Due to expenditures in waste heat recovery and process automation, the integrated segment’s energy intensity increased by only 6%.
Emission intensity decreases in important textile categories
However, it noted that greenhouse gas emission intensity decreased in certain sectors, suggesting efficiency improvements and a progressive fuel change.
According to the report, integrated businesses decreased emission intensity by around 5%, while yarn and fabric enterprises did so by almost 8%.
Due to increased manufacturing volumes, the clothing industry saw a 12% rise in emission intensity. Indirect Scope 3 emissions, which include value chain activities, are still not widely disclosed.
In FY2025, only 21% of the studied enterprises supplied Scope 3 data; the integrated category had the greatest coverage at 29%, followed by clothing at 20% and yarn and fabric at 14%.
For the textile industry to remain competitive, a quicker ESG push is required: ICRA
“The textile sector’s sustainable shift is begun, but the pace must speed,” said Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings. Increasing ESG maturity will eventually boost competitiveness for participants in global value chains.
Investment in cutting-edge technology and renewable energy sources is necessary for implementation. In a world focused on sustainability, targeted upstream measures will guarantee that India’s textile leadership flourishes.
According to the research, the sector’s energy and environmental footprint is still mostly driven by energy-intensive upstream operations including spinning, weaving, and wet finishing. It noted that in order to comply with international requirements, it need additional captive renewable energy projects, efficiency improvements, and enhanced Scope 3 reporting.
The conclusions are based on an analysis of 19 significant textile companies from FY2023 to FY2025, including Page Industries, Welspun Living, Arvind, and KPR Mill.
