Coats sees revenue from recycled thread skyrocket amid sustainable fashion focus

FTSE 250 firm Coats, which makes thread and footwear components used in more than one in five pieces of apparel sold worldwide, saw revenue from 100% recycled thread products rise by 144% to US$405 million last year.

The firm is on a clear path to phase out virgin oil-based materials from its products, and used 46% natural or recycled materials in its products in 2024. This increased from 31% in 2022, which Coats says is due to “significant investment in innovation” in response to greater demand for sustainable products from fashion brands. 

The company is poised to pass the 50% tipping point where virgin oil-based materials will make up less than half of what it uses to manufacture its products. 

David Paja, Coats Group Chief Executive Officer, said sustainability is “the biggest challenge facing our industry and we want to lead by example”.

“By connecting talent, textiles and technology we can show that innovation-led sustainability can not only be good for the planet, but also positive for business,” he added.

According to consultancy Coherent Market Insights, the global sustainable fashion market will reach US$33 billion by 2030, four times its size in 2023.

Read also: Sustainability ‘takes a backseat’ as fashion industry prepares for uncertain outlook

Coats decarbonisation strategy hinges on sustainable materials

In its 2024 sustainability report, Coats notes that transitioning to sustainable materials is crucial to meet its SBTi goal to reduce absolute Scope 3 emissions by 33% by 2030 and by 90% by 2050, from a 2019 baseline.

“The transition to lower carbon raw materials is of significant importance and is the single biggest lever for Coats to deliver material reductions in GHG emissions, making up 74% of Scope 3 emissions and 67% of our entire value chain emissions,” explained Paja.

In order to meet its Scope 3 decarbonisation target, Coats has a goal to transition away entirely from the use of virgin oil-based raw materials by 2030, with an interim 60% target by 2026.

Recognising that “reliably high product quality without over-engineering is a fine balance”, Coats has assembled a team of sustainability and innovation experts who have recruited and trained local talent from various disciplines, including textile engineering, chemistry, biotechnology, design, marketing, and management.

Coats Scope 1 and 2 decarbonisation

Beyond its transition to more sustainable materials, Coats is also working to improve energy efficiency and switch to renewables across its operations. This has driven a 51% reduction in scope 1 and 2 carbon emissions (about 92,000 tonnes) since 2022 – its baseline for emissions reduction.

The company now uses 74% renewable electricity and is on track to reach its 100% target by 2030.