The research assessed sustainability efforts across the value chain, identifying eight strategies that apparel companies are using to positively impact their financial performance

The research assessed sustainability efforts across the value chain, identifying eight strategies that apparel companies are using to positively impact their financial performance

New research has identified eight sustainability strategies that apparel companies are using to positively impact their financial performance and drive better outcomes for the environment and society.

The resulting Apparel Industry Sustainable Strategies Framework developed by the NYU Stern Center for Sustainable Business (CSB) with support from HSBC Bank USA, aims to help businesses drive better financial performance across their value chains by making strategic investments in more sustainable business practices..

Its Return on Sustainability Investment (ROSI) methodology was developed with companies including Eileen Fisher, Reformation and REI.

The research found that there are eight key sustainability strategies that apparel companies are focusing on to drive impact in their business models:

  • Reducing chemical impact
  • Improving water management
  • Improving energy management
  • Investing in the reduction of material waste
  • Implementing sustainable raw material sourcing
  • Investing in circularity and innovation
  • Investing in employee and supplier well-being
  • Investing in sustainable brand marketing and communications

Underneath these eight practices, NYU Stern CSB identified more than 60 practices and sub-practices that describe the crucial activities companies are undertaking to realise and implement their strategies.

US-based women's wear brand Eileen Fisher was able to save about US$1.6m in annual cost savings in 2019 as compared to 2015 after shifting its transportation mix away from air transport and towards sea and trucking transports. The retailer also noted about $150,000 in cumulative societal benefit by reducing greenhouse gas (GHG) emissions during the four-year period.       

Meanwhile, outdoor gear and apparel retailer REI is said to have found its purpose-led company culture helped to improve employee well-being, resulting in $25m and $34m in net benefits from increased employee productivity and retention for 2018 and 2019 respectively, which represents about 5% of the company's total payroll expenses.

"As we have seen in recent years, companies continue to see the tremendous value that results from embracing sustainability in their business practices," said Professor Tensie Whelan, founding director of NYU Stern's Center for Sustainable Business. "In the near future, we look forward to releasing additional results, particularly focused on companies' efforts to monetise investments in circularity."

Sophie Rifkin, director of corporate research and engagement, Stern's Center for Sustainable Business, added: "As Covid-19 continues to batter business, apparel companies are seeking untapped opportunities to strengthen their balance sheets and inspire consumers. Our framework can play a critical role in unlocking value for both business and society, and we look forward to implementing these sustainable strategies with more apparel brands in the coming months."