The World Trade Organization’s (WTO) Public Forum 2022, which took place earlier this week in Geneva, Switzerland, featured an exclusive panel hosted by Just Style titled: ‘Resilient and Sustainable Fashion Apparel Supply Chain: Trade and Trade Policy’.
The session’s panellists offered insights on how fashion brands, trade policymakers and those working within all parts of the apparel supply chain can boost sustainability and increase resilience beyond Covid and in the tumultuous times in which we live.
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Just Style‘s managing editor, Laura Husband, introduced the session by explaining the fashion industry is contending with an ever growing list of issues. She pointed out not only is it trying to reduce its impact on the environment and increase its resilience within the supply chain in a post-pandemic world, but it is also having to navigate a highly volatile economic and political landscape.
“There is rising inflation and a cost of living crisis, an ongoing war in Ukraine, which has led to an energy crisis, as well as geo-political unrest and environmental disasters in key sourcing apparel destinations such as Sri Lanka, Pakistan, Myanmar and Ethiopia.”
How to achieve a sustainable and resilient fashion supply chain
The key question of the session was, how can the fashion industry use trade and trade policy to achieve a sustainable and resilient fashion supply chain during this challenging period? Each of the four panellists shared their tips for achieving long-term success.
See Also:
- Re-evaluate the way the fashion industry operates
Kekeli Ahiable, who is an advisor at non-profit the Tony Blair Institute, which focuses on improving globalisation within Africa, quoted the WTO’s director-general, Dr Ngozi Okonjo-Iweala, to answer this question. She said: “To borrow the director-general’s words from earlier today: ‘We can’t afford to do business as usual anymore’.”
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By GlobalDataAhiable explained the wide-ranging issues facing the environment, climate and people’s livelihoods right now means there needs to be a political will and consensus for change from the fashion industry, academia and customers.
She said: “Everyone needs to come together, have critical conversations and be willing to compromise in order for us to move forward.”
Ahiable believes these simple principles will help the industry both today and in the future come up with creative solutions, and added: “Being the optimist I am, I have a vision for greener production using greener energy and raw materials as well as a better use of water. I also have a vision for all garment workers being able to operate in a safe environment and for there to be innovation in apparel construction, redesign, reuse and recycling.”
2. Embrace the eco-conscious beliefs of future policymakers and fashion industry professionals
Dr Sheng Lu, associate professor of fashion and apparel studies at the University of Delaware also shared his optimism for establishing a sustainable and resilient fashion supply chain in future. He believes the secret to future success lies with the fashion industry and trade policymakers’ next generation.
He explained: “I’m optimistic about the future because I’m optimistic about our students. Generation Z genuinely care about sustainability. I often say companies are not abstract constructs. Companies and policymakers are composed of people. When our students and future professionals for the fashion industry apply sustainability concepts into their business practices I’m sure we will continue to see positive change within our industry.”
3. Engage in dialogue on a country-level
Senior research and policy specialist at the International Labour Organization, Dr Arianna Rossi, has worked in the industry for over 15 years and has seen first-hand the positive impact that having a job in the garment industry with good working conditions and environmental soundness can have. She said it’s transformational, especially for women, and that’s incredibly motivating.
Rossi pointed out the solution needs to be seen in a holistic way, so it’s not just about brands, vendors or suppliers, nor is it just about the government having the right regulations, or just about the consumers – it is all of it together.
She noted: “Having this type of dialogue and many more, especially on a country level is where we can find solutions that really take into account the interests of everyone and that will really move the conversation forwards. This will hopefully bridge the power imbalances that exist within the supply chain.”
4. Create usable frameworks for apparel and fashion companies
For Ralph Kamphöner, the Confederation of the German Textile and Fashion Industry’s head of EU office, the answer lies with ensuring policy frameworks are designed in a way that fashion companies can easily implement.
He told the audience: “The companies I represent are willing to deliver their contribution to creating a sustainable and resilient supply chain. Our role as a trade association is to tell policymakers, especially in Brussels and the EU that we need to get a policy framework for companies to do what everyone legitimately expects from them.”
Kamphöner said this starts with the Generalised Scheme of Preferences (GSP), which aim to alleviate poverty and create jobs based on international values and principles, and import preferences from developing countries need to be targeted directly but also made in such a way that companies can really use them.
He explained: “For example, if you print a 100-page long explanation on how to apply trade preferences – neither the exporter nor the importer will be interested because it’s simply too complicated. The same goes for the directive in the pipeline on due-diligence. Therefore we need to get the proportions right.”
He pointed out this applies to innovation too as there needs to be a conducive framework whereby innovation is supported and encouraged as well as a skilled workforce to ensure it’s a joint effort.
The impact of the pandemic on apparel trade and trade sourcing
Kamphöner also highlighted how the pandemic has changed the way apparel trade and trade sourcing operates within the fashion industry.
He believes it has accelerated nearshoring and advanced automated processes within production. He stated: “The appetite for Chinese imports has decreased massively – it’s just not as attractive anymore. In Turkey, for instance, you can produce garments more cost-effectively than China when you calculate production, transport and import costs. This also makes the areas around Germany or even inside Germany, much more attractive as you have shorter delivery times. In Asia, you’re looking at about five or six-week delivery times, and closer to home it’s about three to six days.”
Lu jumped in to explain the export and import trade data remains pretty stable. However, he pointed out he’s had the opportunity to work with the US Fashion Industry Association on its benchmarking study, which involves talking directly with leading US fashion companies in a bid to understand their detailed sourcing practices.
“Based on this work I have to say sourcing has never been so dynamic and it is constantly evolving.”
He described key misconceptions when it comes to fashion sourcing: “There’s a huge misunderstanding that fashion companies’ sourcing strategies are only about cost. This is not the case as sourcing executives today need to consider a lot of factors. Following Covid, fashion companies have placed more emphasis on flexibility and agility.”
He also highlighted the trend for sourcing diversification with leading companies sourcing products from 20-plus different countries, however he added that because of Covid and supply chain disruptions, companies also want to strengthen their relationship with key vendors.
He told the audience: “This is a very interesting phenomena as fashion companies are sourcing from more countries but are working with fewer vendors. Instead they are working with so-called ‘super vendors’ that have a multiple country presence. This means companies have the flexibility to change sourcing orders easily while keeping the lead times as short as possible.”
Lu sees both opportunities and challenges and both winners and losers from these patterns. For example, he explained really competitive vendors will get more sourcing orders. However, less advanced economies tend to have a huge number of factories, and many are pretty small and not that competitive. As a result, he concluded: “I’m a little concerned about their survival in the current business environment.”
Rossi pointed out the pandemic has been really devastating for apparel workers in developing countries, because the industry had both a demand and supply shock that led to four million people losing their jobs at the height of the lockdown period in 2020.
Since then, she said: “We’ve seen a disturbing trend of a very gendered job recovery in the past year or so where jobs for men in the apparel industry have started to grow again, and are actually recuperating and going back to their pre-crisis levels. But jobs for women who tend to be the majority of garment workers in general worldwide are still around 6% less than they used to be in the pre-Covid period.”
Rossi added this is a really important question for us all as we consider how the future of the industry will be resilient and sustainable, because so much of the promise of the industry to be an engine for growth and development is anchored on the role of female workers. She explained this is because garment jobs are usually the first option available for young women that migrate from rural areas and wish to enter the formal labour market for the first time.
She said: “There’s always been this very enticing idea of garment jobs being a way to achieve development and potentially even gender equality with certain conditions being met. However, the crisis has really shown the vulnerability of the system and how instead, at the first sign of a major shock, women are the first to be on the front line of job losses and discrimination.”
Advances in sustainability and social responsibility
Both social responsibility and sustainability arguably deteriorated during the pandemic and Rossi believes there’s still a very mixed picture. In fact, she noted: “If consumers still think it’s possible to buy a US$4 t-shirt and for the whole supply chain to be in compliance with environmental standards and social standards I think we need to take a hard look at ourselves. We shouldn’t be buying millions of t-shirts every year for many reasons but this seems to be a good explanation as to why the whole business model has been shown to be ultimately flawed.”
She argued there are good solutions both on labour and environmental issues but it does require an initial investment which shouldn’t be seen as an added cost but a medium-term investment into a return that can benefit us all.
West Africa has a strong second-hand clothing market and Ahiable explained West Africa is already exploring ways to sort that waste, and get it ploughed back into the economy, while creating more circularity in the process.
However, Lu noted many fashion companies still treat clothing made from recycled materials as a niche product largely because of the technology limitations and also because of consumers’ perceptions.
He said: “My worry is what if they just use this as a marketing tool – I’d rather see an actual business model centred around circularity, rather than brands carrying one or two products made from recycled materials in order to show they are supporters of sustainability.”
Innovations in circularity for creating a sustainable and resilient fashion supply chain
In saying this, Kamphöner explained there are already a number of truly circular innovations within the German textile industry. He highlighted yarn or fabric leftovers from cutting and production is being fed back directly into the cycle with processed and recovered fibres being spun into new yarns so companies can conserve resources and avoid waste.
He said: “Many are also taking the circular economy one step further by using bio-based and biodegradable raw materials and residues. This is how clothes are made from algae, nonwovens from the remains of pineapple plants and car interiors made from natural fibre composites. The basic idea here is biodegradable materials can be returned to the biological cycle and do not release any microplastics.”
He also made the point that yarns can be produced that are strong and durable, and yet compostable: “We can produce yarn from CO2 and the first socks made from CO2 yarn have already passed the test. Clothes made from withered rose petals or from algae have also been presented on red carpets and arouse curiosity about even more recyclable materials, such as bio-based fibres made from chicory root waste. But it is also important to be able to separate and recycle conventional fibre mixtures.”
Kamphöner added new technologies are constantly being refined, which means these innovations are continuing to take the textile circular economy forward.
For example, he said: “German companies produce special yarns using new spinning processes that are extremely durable, long-lasting and compostable. These yarns can be used to produce recyclable fabrics for outdoor jackets or tram seats.”
Click here to listen to the panel discussion in full.
