Contrary to common perceptions, fast fashion is not a fad in itself. This swift industrial response to changing clothing market trends is here to stay, one consultant believes. But he warns there is a long way to go before it is a fully sustainable industry, in terms of its social, environmental and ethical pulse.
This matters to the environmental health of the world. According to Boston Consulting Group (BCG) research, the global fashion industry’s net worth in 2016 reached US$1.5trn and employed more than 60m people. While the industry produced 62m tonnes of apparel in 2016, BCG’s research suggests this will reach 102m tonnes by 2030 due to expansion within the industry, a significant portion driven by fast fashion.
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“The topic of sustainability is gaining importance,” BCG principal, Sebastian Boger, advised the International Apparel Federation (IAF) World Fashion Convention in Rio De Janeiro. “A lot of decision-makers in the last two years have asked us how they can change. No-one has yet figured out how to draw a baseline for sustainability in this industry.”
Industry pressure
Although 80% of textile and fashion companies already have sustainability targets in place, BCG’s research has found that just 30% of companies integrated sustainability as a key factor in decision-making. With demand for fashion projected to grow by more than 60% by 2023 worldwide, key industry players are beginning to place ever greater urgency on sustainable production.
“There’s a lot of pressure on the industry, which makes us look a lot at how we can adapt,” said Marissa McGowan, PVH Corp’s group vice president for corporate responsibility. “The private sector is expected to act and is being asked to act, and we’re in the headlines if we don’t.”
Corporate responsibility on sustainability issues is becoming even more of an influential factor for consumers, according to research from New York-based consumer-facing review platform Project JUST, which allows shoppers to monitor brands for their supply chain ethics and sustainability. According to Project JUST, 56% of US consumers stop purchasing from brands they believe are unethical. However, more often than not customers are merely seeking a stamp of approval from peers regarding the ethics of a brand that they buy, rather than wanting to know all the details.
Aleix Busquets Gonzales, C&A’s global head of external stakeholder engagement, echoed this sentiment. “Customers want to know that as a brand, we are doing the right thing,” he told the convention. “They don’t want to know the details, they just want to know that we are doing it.”
But fashion and textile brands across the globe are also being forced to look at sustainability from a practical as well as marketing perspective, with a simultaneous decrease in resources and projected increase in demand. Just 15% of textiles produced every year are recycled, while 85% – approximately 21bn tonnes – are sent to landfills. Meanwhile, industry profits have been shrinking by as much as 2% to 3% annually for the last few years, according to BCG’s research, spurring sustainability initiatives among some of the industry’s largest firms and fast fashion companies.
Knowledge sharing
Sharing knowledge and investments is key for the industry to move towards sustainability, according to BCG’s Boger. Although some firms have some fairly advanced initiatives, others are lagging far behind. “We’re not starting from scratch, but current initiatives are not enough. Many companies have already come together to show willingness to tackle those issues,” he said. “Only if core market players share knowledge will change spread throughout the industry.”
Between them, major clothing industry players are making discoveries in key sustainability areas. C&A has reduced the 7,200 litres of water needed to make a single cotton t-shirt by using rain-fed, organic cotton – an approach many feel is important in an industry that is one of the world’s most significant consumers of water. Another hot topic is labour and the role of fair wages in promoting sustainability, with many of fashion’s larger firms admitting to tension between procurement processes and supply chain labour demands.
And fair labour is a challenge for the global garment industry, not just in developing countries, according to the International Labour Organisation’s (ILO) Brazil director Peter Poschen. Even in the USA, Poschen points out, 43% of garment manufacturing workers are not paid the wage to which they are legally entitled, and 71% do not receive overtime pay – if they did, maybe quality would rise: “Better work is important for competitiveness and productiveness,” he told delegates.
Digital adoption
Saskia Hedrich, consulting firm McKinsey & Company’s senior expert in fashion, apparel and luxury, also believes a collaborative approach to addressing environmental and social sustainability issues is crucial. But even more essential, she said, will be adoption of new digital technology solutions within the industry.
“The key challenges are not just for this year, but are tectonic shifts and are longer term,” said Hedrich. “It’s very important to understand what digitisation really is. It’s about a new way of working, leveraging data and analytics and how we tackle new challenges in the process.”
Research from McKinsey shows that 49% of industry players place ‘digitisation of sourcing processes and related areas’ within the three most important investment areas to improve efficiency and cope with sector-wide trends. And while just 21% put it as their number one priority, sourcing executives expect that predictive analytics will be the area with the highest impact over the next five years, followed by 3D design and prototyping, augmented reality and digital printing.
Employing new technology, Hedrich said, will allow the fashion industry greater flexibility along its production chain and more sustainability going forward. “We need to be ready for this multi-country, multi-speed model so that, in the end, the product is profitable in terms of sales,” she said. “Many players are still reluctant to bank on predictive analytics. You need to take your whole organisation on this journey, which can be scary – but it has an impressive impact.”
But McKinsey’s research, which Hedrich drew on, reiterates the importance of customer knowledge when it comes to sustainable practice. “Think beyond compliance and auditing when you think about millennial consumers, it’s a different mindset,” she warned. “Sustainability is more than just compliance.”
