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June 27, 2019

Is profit a bad thing? The business case for sustainability

With many companies still struggling to find a way forward on sustainability, Jackie Lewis, senior consultant at apparel size and fit specialist Alvanon, suggests there needs to be a hook from a business point of view to motivate change. Here she sets out five steps she sees as key.

By Beth Wright

With many companies still struggling to find a way forward on sustainability, Jackie Lewis, senior consultant at apparel size and fit specialist Alvanon, suggests there needs to be a hook from a business point of view to motivate change. Here she sets out five steps she sees as key. 

“It’s difficult if you’re a business leader today: you’re trying to balance two things and one is profits, because if you don’t make money, you’re not going to be here for the future. If you’ve got a sustainable business model, you need to be making money. And then balanced against that is business risk as well if you don’t start to deliver in terms of a sustainability agenda,” Lewis explains. 

“So I think we need to be mindful of that when we look at where we are as an industry [on sustainability], and the challenges that it presents us in terms of moving forward.”

Sharing her thoughts at a recent conference on ‘Time for change – facing up to fashion’s sustainability and ethical challenges’ organised by the ASBCI (Association of Suppliers to the British Clothing Industry), she adds: “Basically, if we continue as we are, it’s going to start hitting you or your profit lines. That’s where, from a business point of view, there needs to be a hook. Businesses are so accustomed to talking about roadmaps and financial KPIs and all of these measures that we need to start changing the language a little bit.

“Just because it’s the right thing to do won’t necessarily motivate businesses to change. But if we start to tell them that they’re going to make more money, they’re going to drive revenue, they’re going to reduce waste, they’re going to drive their brand identity within the market and they’re going to be more competitive, I think more businesses might stand up and start to listen.

Lewis’s focus on ‘Caring for people and planet – where’s the profit?’ is driven by her concern that between now and 2030 it’s estimated that the global population will increase to 8.5bn people, a growth rate of 1%. Yet clothing consumption is growing at a rate of more than 4%.

“As the population grows, our consumption of clothing will naturally grow. But I think we’ve got to work into this the correlation between population growth and consumption – and against that backdrop, we know that we’re not performing very well.”

Difficult balancing act

Another issue is the widespread assertion that the industry’s legacy linear model is no longer practical for the future.

“To ‘produce and then sell’ is something that’s being challenged at the moment in terms of ‘Is it the right way forward?'” She cites a statistic in the Pulse of the Fashion Industry 2017 report co-authored by Global Fashion Agenda and The Boston Consulting Group, which stated that if fashion brands continue to operate as they do now, by 2030 they could potentially see a decline in EBIT margins of more than three percentage points.

“Businesses are so accustomed to talking about roadmaps and financial KPIs and all of these measures that really are based on money that we need to start changing the language a little bit.”

Against this backdrop, Lewis explains she’s been exploring the idea of how to make things more simple, “how to we mobilise together, how do we help people to move forward together?

“And it made me think is it really that complicated? Is sustainability just a new buzzword for efficiency?” 

She refers to a report commissioned last year by ING, which claimed the top three reasons for businesses to move forward and be sustainable in the future was “nothing to do with legislation” and more about driving revenue and reducing cost.

“That’s key, and maybe supports where I’m coming from in terms of sustainability being very closely aligned and correlated with efficiency.

“We’ve all got to find our own way through this conundrum, and I thought about my career so far working in the industry, managing teams, leading teams, developing people, driving process improvement, quality improvement, the digitisation of colour and consolidating fabric programmes to drive quality as well as price and margin – all of these things I’ve done, and yet I felt completely disconnected.

“And then I realised I’ve been a sustainability advocate for nearly 30 years now. And if I’d defined myself as a sustainability advocate, maybe I’d have felt more engaged in my achievements.

“So I think it’s important to find your own groove and, as a business, to think about that, because the sustainability journey for one business will not look like the same for the next business.”

5 pillars of sustainability 

Lewis believes there a five steps to a sustainable business.

#1: People People must be a priority, she says. “It’s about jobs and making sure that the industry is future proofed. You can’t do that without giving people the right training and education. The newcomers to the industry today are getting this base level training; but we’ve got a huge gap with the people that are already in the industry, specifically around sustainability, also around digitisation, and I think some of the basic skills as well. Focus on your people, give them the training, enrich them. Bottom line: it costs you money if you don’t look after people.”

#2: Transparency “There’s a big, big business emphasis on driving sustainability and transparency within your sustainability agenda, and that is going to start to become something that the consumer demands as well. Brands such as Everlane are not only introducing their consumer to the factory and the person who made that garment, but they’re also talking to the consumer about what they paid for that garment. That’s a level of transparency on a completely different level to what we know today.”

#3: Community  “The UN reported this year that as low as 0.2% of the revenue that we make from our industry is giving back to the communities that we operate in,” Lewis says. “I’m sure we can afford more than that.”

#4: Efficiency “My big thing,” Lewis says, noting that if businesses are not running as efficiently as they could be, they are simply throwing money away. “That’s a big thing. I think it’s obvious, is it not?”

#5: Privacy “This is a new one on the block. We’ve got to respect the privacy of our consumers,” Lewis cautions. “Their personal data, although we might have access to it, we’ve got to respect that and not misuse it.

And where to start on all this? “At the beginning,” Lewis says. “I know it sounds patronising, but your designers and your product developers hold the key. Up to 80% of the environmental impact you have, what product you produce, is defined at this stage. So that’s really, really important. Start right. Have the people with the right skills who understand sustainability and drive it through from there.”

Five key messages that relate to the pillars

  • The first is do your designers have the skills? “Do they understand sustainability? Because that’s where it starts.
  • “Two, who made my dress? If you don’t know, you need to know because the consumer’s starting to ask the question.
  • “Three, what percentage of revenue do you give back? Is it 0.2%, is it more? Is it nothing?”
  • Fourth is samples. “Samples, samples and yet more samples. 60% of all ladies’ fashion lines that are developed don’t even make the first cut. Every sample, every style that you sell, your teams have probably touched about four to five times, all of that waste of time and sampling, that’s even before it gets as far as the consumer. Let’s not blame the consumer. Let’s go look inside of what we’re doing first. This is what you need to start thinking about in your businesses if you’re going to drive both profits and efficiency and sustainability.”
  • And lastly: “Have we learned from the Facebook saga? Respect the consumer. Understand that their personal data is their personal data. Have you got somebody within your organisation that thinks this is important? Because you need to have somebody that’s taking care of that.”

She concludes: “We need to rebuild the house, think about the foundations, build it with the craft that we had before, build it so that we’ve got this industry for the future for the people who want to work in it in the future. That, for me, is sustainability.”

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