Autorin: Yvonne Heinen-FoudehAs integral part of its company mission Inditex defines itself as an agent of change, when expressing “We want to contribute to the battle against climate change by aligning our sector with the United Nations’ recommendations and aspirations, so helping to protect the planet and its inhabitants.” The company was one of the first signatories of the UN Global Compact bck in 20021. Furthering the achievements indeed in previous years, lately the Spanish conglomerate updated its ambitious sustainability goals.
These to include a 25% reduction of water consumption in their supply chain by 2025, and by 2030, to halve emissions in the design and manufacture of products, their distribution and their end-of-life management, and to use only textile raw materials that deliver a lower impact on the environment. The long-term objective: To achieve zero net emissions until 2040 by reducing their carbon footprint by at least 90% by comparison with 2018.
Doubtlessly the Group’s financial strength is being massively leveraged for the significant investments in sustainability and global aid initiatives. Projects span education, emergency relief, and environmental conservation, aligning with the United Nations Sustainable Development Goals (SDGs).
Inditex key SDG investments – an overview
Global Sustainability and Aid Initiatives:
- In 2023 the company backed a total of 910 projects, allocating €112 million, positively impacting more than 4.3 million individuals. [Source: inditex.com]
- 2024 Investments: Inditex supported 953 social and environmental projects worldwide, investing €135 million. These initiatives directly benefited over 4.6 million people, with a goal to reach 10 million by 2025.
- [Source: Annual Report 2023
Textile Innovation and Circular Economy:
- € 50 Million Innovation Fund: In 2024, Inditex launched a fund managed by Mundi Ventures to invest in start-ups developing sustainable textile technologies. [Sources: Business of Fashion, Reuters, just-style]
Fundings for Sustainable Start-ups:
- Galy: The US.-based company produces lab-grown cotton from plant cells. „Galy Cotton,“ is produced using cellular agriculture techniques, resulting in a product that uses 99% less water and 97% less land than traditional cotton, while emitting 77% less CO₂.
- Circ out of their Danville/Virginia HQ, the fabric generator has been working with the Inditex lead brand Zara since 2022. Recently they together have released a second collection of clothing made using fabric from recycled textile.
For both Galy and Circ the parent company of Zara participated in Series B funding rounds, which raised over $30 million each. [Sources: https://circ.earth/about-us/; https://www.bcorporation.net/en-us/] - Infinited Fiber Company: Develops Infinna™, a recycled textile resembling cotton. [Sources: Vogue Business, Reuters]
Environmental and Renewable Energy Initiatives:
- Inditex is developing a wind energy facility in A Coruña, Spain, hence at the site where it all began, not far from the head office to this day. Estimated investment:€34 million, aiming to power its headquarters and port infrastructure. [Source: inditex.com]
- Power Purchase Agreements (PPAs): The company has entered into virtual PPAs totaling 136 MW to promote renewable energy generation. [Source: inditex.com]
- Material Sourcing Goals: By 2030, Inditex aims for 40% of its textile fibers to come from conventional recycling and 25% from next-generation materials. [Sources: Annual Report 2023, Reuters, just-style]
- Regenerative Agriculture: In March 2023 Inditex announced an investment of €15 million in the Regenerative Fund for Nature, launched as a joint venture by global non-profit Conservation International and luxury conglomerate Kering (Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen, Brioni, Boucheron a.o.m.)in 2021. Kering’s Regenerative Fund for Nature, supporting projects that promote sustainable farming practices. [Sources: Kering, Vogue Business]
Community Investment Policy:
Inditex company policy also emphasizes contributing to community well-being and to maximizing value generation. Just two exemplary projects in that respect:
- In January last year the group brand Zara Home inaugurated its first Portuguese For&From Store for integration of persons with disabilities, management tasked to the local VilacomVida Association. Located in the Freeport Lisboa Fashion Outlet,close to the Portuguese capital adds to the already 14 stores plus one in Italy for the format, devoted to the sale of prior-season Zara Home collections.
- April 2025: Inditex partners with the Asian University for Women (AUW) to initiate a scholarship program to enhance the educational opportunities for women employed in Bangladesh’s textile factories, commits €3.75m to educate female garment workers in South Asian state.
Nearing 40 billion sales sound barrier
While the reluctance to spend in the face of massive energy cost increases and general uncertainty in the majority of global markets is putting pressure on fashion sales, the industry high-flyer, the Spanish Inditex Group is celebrating not only its 50th anniversary but another all-time high: With the end of FY 2024 (January 31, 2025, as reported) Sales rose by 7.5% to € 38,6 billion € . Net profit increased by 11% to € 5.9 billion
Gross margin reached 57.8%, while operating expenses remained below sales growth at 6.5%. The company, which is listed on the Madrid Stock Exchange (ETR: IXD1, IPO in 2001) invested € 2.7 billion in the financial year in the optimization of its store network, digitalization and the expansion of logistics. The sales area grew by 5.8 percent, while the number of stores fell by 2.3 percent. At the same time, online sales increased by 12% to €10.2 billion. All of this having been achieved with a total of ~ 130.000 employees, spanning 170 nationalities.
