5 Sustainability Threats Facing Fashion
Fashion's need for raw materials and labour intensive production processes make it an industry particularly vulnerable to environmental disruption — as are the profit margins of businesses that operate within it. “Based on conservative projections, fashion brands’ profitability levels are at risk by at least three percentage points if they don’t act determinedly soon,” says Javier Seara, the lead author of the Boston Consulting Group and the Global Fashion Agenda’s sustainability focused report, "The Pulse of the Fashion Industry." Certainly, inaction on climate change could result in radical risk-taking.
But what are the most pressing threats to fashion businesses, and what is the industry doing about them?
- Cost of Raw Materials
The fashion industry has evolved using a linear model when it comes to raw materials, often expressed as "take, make, and waste." However, as is becoming emphatically clear, some of the resources fashion relies upon to create its goods are finite, most critically — fresh water. Dyeing and treatment processes use vast amounts of water; to make a pair of jeans and a t-shirt takes 20,000 litres according to the WWF. Over 70 percent of that water usage is in the agriculture of cotton, which is among the fabrics with the highest environmental impact along with silk, wool and leather.
- Labour Disruption
In addition to the inherent waste that fashion’s linear economy creates, many of the geographies that fashion relies upon for cheap labour are at high risk of environmental disruption. The extreme weather conditions expected to become more common in the near future are likely to impact the livelihood and mobility of millions of garment workers, leading to supply chain inefficiency and decreasing output.
The transportation and logistics industries also face an uncertain future. As oil fields become more difficult to access and the cost of extraction rises, oil prices will increase.
- Higher Regulation
The increasing scarcity of resources like oil and water means regulation will play an increasing role in the manufacturing of products such as cotton. "The Pulse of the Fashion Industry" report envisages two scenarios through which higher levels of regulation are incorporated.
The authors’ preferred scenario sees the industry establishing its own sustainability standards and bodies, which are then acknowledged and affirmed by international regulatory bodies. This scenario could be bolstered by legislation that incentivises sustainable practices such as tax breaks.
The second scenario sees international regulators “taking part much more aggressively, ushering in a new generation of profitability for everybody,” according to Seara. “Due to increasing cost pressures, increasing consumer pressure, and eventual regulator pressure of some form, whoever doesn’t get on the wagon of fixing the foundation, collaborating with others to improve, they will not be part of the game.”
- Consumer Sentiment
By 2020, millennials will be the most numerous demographic in the global workforce, which means fashion businesses must now cater to their preferences, rather than those of Generation X. Millennials consistently identify sustainability as a factor that influences their purchasing habits. But while a third of millennials say they are more likely to buy from companies that are mindful of social responsibilities (just a quarter of those over 51 say the same, according to BCG) only “a tiny proportion of all consumers are willing to pay more for a sustainable product.”
A PATH TO SOLUTION
A number of leading fashion businesses are pioneering sustainability initiatives, motivated by both environmental concern and commercial opportunity. H&M has led the way in reducing the carbon footprint of its store network and has pledged to double its energy productivity by 2030. By that year, H&M also aims to use only recycled or other sustainably sourced materials in its products. In 2016, this share was 26 percent (although 43 percent of H&M’s cotton came from sustainable sources. The goal is to use only such cotton by 2020). “Strategic stakeholder engagement — like Organic Cotton Accelerator and Canopy Style — is vital,” says Eileen Fisher, founder of the namesake sustainable fashion brand.
In addition to increased use of sustainable and recycled materials, circular economic principles are being designed into products. In February 2012, Nike released its Flyknit trainers, with uppers made from micro-engineered polyester that is lightweight and form-fitting. The design reduces waste by about 60 percent compared to traditional cut-and-sew footwear construction. And this month, Adidas launched three new trainer styles made from recycled ocean plastic. Each pair uses 11 plastic bottles and the company's goal is to make a million pairs from recycled plastic this year alone.
BY ROBIN MELLERY-PRATTMAY 26, 2017 05:27