Brands and retailers face enormous pressure to offer more sustainable products, faster and cheaper

Brands and retailers face enormous pressure to offer more sustainable products, faster and cheaper

The Foreign Trade Association's inaugural Sustainability Conference has highlighted the need for cooperation and dialogue throughout the supply chain to achieve tangible results and long-lasting improvements in human rights, environment and trade policy. And, as Jozef De Coster reports, it also heard how European retailers are struggling to transition from cheap and fast to sustainable.

Representing 1,847 European and international retailers, importers and brand companies with a combined turnover of EUR910bn (US$1.035bn), the Brussels-based Foreign Trade Association (FTA) is a powerful network helping businesses move towards sustainability in their international supply chains.

However, despite its social and environmental initiatives – the Business Social Compliance Initiative (BSCI) to help improve working conditions in factories worldwide, and the Business Environmental Performance Initiative (BEPI) to drive better environmental performance in global supply chains – the FTA acknowledges that wider collaboration is key to more sustainable and responsible supply chain practices.

So not surprisingly, the theme of the FTA's first Sustainability Conference in Brussels last week was 'The Power of Collaboration.'

FTA contends that cooperation and dialogue between all links in the supply chain are key to achieving tangible results and long-lasting improvements in human rights, environment and trade related challenges.

Indeed, the organisation is not only promoting collaboration among its own members but, as director general Christian Ewert stressed, over the last year has set up collaborations and partnerships with organisations such as the French Initiative Clause Social (ICS), the Zero Discharge of Hazardous Chemicals (ZDHC) programme and – in the last week – Sedex, the non-profit group working with buyers, suppliers and auditors to improve global supply chains.

Sedex and BSCI in social compliance collaboration

Louise Nicholls, head of responsible sourcing, packaging and Plan A at UK retailer Marks & Spencer was applauded following her presentation of the company's impressive achievements and ambitious plans in the field of sustainable sourcing. The retailer launched its Plan A sustainability commitment back in 2007, and in its most recent progress report last year explained that 64% of its products now have a Plan A attribute – an eco or ethical quality above the market norm.

However, other presentations made it clear that even Marks & Spencer can't evolve much faster than the demands of its customers and is fiercely challenged by cost and speed oriented competitors. Brands and retailers continue to face enormous pressure, not only to offer more sustainable goods, but to deliver products faster and cheaper.

Voluntary standards don't suffice

FTA gave the floor to a couple of provocative speakers who, like the scientists described by Arthur Koestler in his tragi-comedy 'The Call Girls,' fly from conference to conference to discuss subjects of world importance: in this case 'global sustainability.'

One of them, Jonathan Porritt, posed as a pessimist; the other, Alan AtKisson, as an optimist.

Jonathan Porritt is the founder of the Forum for the Future, a non-profit organisation focused on sustainability, and has been involved in Marks & Spencer's Plan A right from the start. According to this sceptical observer, the textile and clothing consumer is terribly confused by all the company messages and product labels and is unable to see a difference between fact and fiction.

Instead, Western consumers just continue buying goods as cheaply as they can. Companies fail to tell consumers that sustainability has to be paid for; they also fail to regulate business activities properly by setting voluntary standards.

Porrit's message to the FTA: "Far too many people still see free trade as a panacea and dismiss mandatory sustainability measures. This is insane." Though Porritt admits that the recent signing of the Paris Agreement on Climate Change (COP21) by 175 nations was an inspiring moment, he is not optimistic about the final results. Despite the commitment to limit global warming to a maximum of 2°C by 2050, he expects that by the end of the century the average temperature will have risen by 3.7°C. This makes most talks about ecological sustainability purely academic, he says, adding that in the realm of business, greedy kleptocracy – not corruption – is the greatest problem. He advises a new social contract between civil society and the business world.

Sustainability's big rewards

The amazingly creative American-Swedish consultant Alan AtKisson, author of books like 'Believing Cassandra' and 'The Sustainability Transformation,' does not lack self-confidence. He presents the AtKisson Group as "one of the world's most experienced multi-service organisations in the field of sustainability," and is touting worldwide his ISIS Method (Indicators, Systems, Innovation, Strategy) to put sustainability to work.

AtKisson is, among many other projects, promoting the Oslo Manifesto, an initiative that helps designers and architects get involved in the United Nations' Sustainable Development Goals by posing 17 questions to help drive innovation and encourage a sustainable future.

Some of these questions are particularly challenging for fashion designers, such as "How can this design transform production and consumption patterns, to make them more sustainable?" and "How can this design be part of the urgent action that is needed to combat climate change and its impacts?"

AtKisson tries to encourage fashion companies to invest in sustainability by making them aware of the rewards, such as positive brand differentiation and a better stock market performance.

A case for climate change

Bangladesh, with its low-lying landscape and severe tropical storms, is among the countries most vulnerable to the effects of climate change. In the Ganges Delta, made up of 230 major rivers and streams, 160m people live in a place one-fifth of the size of France. According to Runa Khan, founder of the NGO Friendship-Bangladesh, scientists expect rising sea levels to submerge 17% of Bangladesh's land and displace 20m to 40m people by 2050.

Residents of the delta won't have much other choice than to move to slums in already crowded cities, where the textile and garment industry is also located.

This industry currently employs more than 4.2m people, making up 81% of total exports and contributing to around 16% of Bangladesh's GDP. It remains to be seen if the influx of tens of millions of poor people into the cities will have an overall positive or negative impact on the sector.

BSCI benefits

Darrell Doren, FTA senior director of sustainability, presented a cost/benefit analysis of collaboration in the field of BSCI auditing.

The BSCI (Business Social Compliance Initiative) is an initiative of the FTA that offers member companies one common code of conduct and a holistic system towards social compliance in the supply chain that is applicable to all sectors and sourcing countries.

Doren explained the importance of the so-called 'linkage density' of networks in a given country. In Bangladesh, a country where many BSCI members are sourcing, every time one audit that involves a BSCI member is conducted, 5.3 audits would have taken place if BSCI did not exist. In Vietnam, where BSCI members are currently less active than in Bangladesh, the number of conducted audits would still be 3.8 times higher without BSCI.

This implies, of course, that BSCI members save a lot on audit costs. They not only save the cost of avoided audits – in 2015, at an average cost of EUR1,750 per audit, this comes to a total of more than EUR71.5m – but also the cost of supervisory hours performed by the audit management (on average EUR396.88 per audit: total cost EUR16.2m).

Last year the value per BSCI member of avoided audits amounted to EUR51,937. This constitutes a strong financial incentive for collaboration. But there are many more benefits, too, with audited factories also scoring higher on health, safety and productivity.