An in-depth look at Coats Group, the world-leading thread and structural components manufacturer for apparel and footwear.
We use the United Nations (UN) 17 Sustainable Development Goals (SDGs) to identify unmet needs, which represent a source of untapped demand and growth opportunities.

Unmet need – we’re all paying for fashion 

The fashion world is attractive, glamorous and fascinating. However, its impact on the environment is comprehensive and growing. It’s common knowledge that all customer products negatively affect the environment in one way or another. The UN Environmental Programme states fashion accounts for 10% of global carbon dioxide output – more than international flights and shipping combined. This could jump to 26% by 2050 if the industry remains on the same trajectory[1]. 
Fashion and apparel also account for a fifth of the 300 million tons of plastic produced globally a year. Polyester, a ubiquitous form of plastic derived from oil, has overtaken cotton as the backbone of textile production. Garments made from this, and other synthetic fibres, are a prime source of microplastic pollution, which is especially harmful to marine life. The Geological Survey states that 71% of microplastics found in river-water samples came from fibres. 
However, the average consumer doesn’t have a precise idea as to which product brings about less or more impact compared with others. The various stages in textile manufacturing hurt the environment through the constant and relatively huge emissions of greenhouse gases and water withdrawal. Growing cotton also requires pesticides and herbicides, releasing toxins into the ecosystem.

How does Coats address the unmet need?

Which brings us to UK-listed Coats. This £1.2 billion company is a leader in sustainable threads and structural components for apparel and footwear. Its operations align with SDG 12: “Ensure sustainable consumption and production patterns.”  

Coats is developing products in new areas such as tracer threads, aramids and fibre optics. It’s also extending its craft offerings in new markets and online. Sustainable threads can help resolve the environmental issues arising from garment production.

One example is EcoVerde. This is the first globally available 100% recycled polyester sewing threads. Launched in 2018, it’s now one of the most comprehensive ranges of fully recycled polyester (rPET) threads, zips and trims on the market. 

That said, Coats acknowledges rPET is not a fully closed-loop solution, as most of its products are made from polyester. However, the company makes products from recycled materials that extend the life of the resource rather than using virgin materials. We believe this is the best approach until it develops more sustainable solutions. It aims to transition all-premium polyester products to recycled polyester raw material by end-2024. 

Coats has made progress towards this goal. According to its 2023 Sustainability Report, 27% of its premium sales that year came from the EcoVerde range of recycled products1. A notable increase from the 19% in 2021.

Measuring real-world impact 

At least 70% of Coat’s research & development spending is devoted to improving sustainable products. This outlay continues to bear fruit. Its full-year 2024 results showed market share gains in apparel and footwear. There was also significant growth in 100% recycled threads, with a 44% revenue increase from these products [2].

At abrdn, we engage with companies where we think we can add value and help them on their ESG (environmental, social and governance) journeys. At our recent meeting with Coats, we suggested management provide more detail about the percentage of recycled materials the business uses in its sustainable products. We also discussed how it measures the decomposition of its materials. The positive dialogue is ongoing. 

Final thoughts…

A more sustainable fashion industry will be essential to meet the UN’s 2030 target for sustainable consumption and production. Success will require the combined efforts of all the players across the supply chain. Consumers, who are increasingly aware of the importance of sustainability, will be a major driver of this goal. We believe companies like Coats will continue to lead the way towards a more sustainable and eco-friendly fashion industry.