Fashion executives are being urged to place sustainability at the core of their business models to help rebuild resilient and sustainable businesses post-Covid-19.
Released today (19 May), the ‘CEO Agenda 2020 – Covid-19 Edition’ sees Global Fashion Agenda (GFA) update its sustainability agenda with contributions from McKinsey & Company.
Based on in-depth consumer and supplier research as well as interviews with sector leaders, the updated agenda acts as a guide to support fashion leaders post-pandemic and encourages fashion CEOs to future-proof their business models by focusing on sustainability.
“As our industry begins to grapple with the destabilising effects and long-lasting consequences of this worldwide pandemic, sustainability risks becoming secondary. Whereas short-term measures often become the sole focus during uncertain periods, we believe sustainability provides the organising principle to build our future on,” Eva Kruse, CEO of Global Fashion Agenda, notes.
Short term, GFA urges fashion executives to utilise the opportunities Covid-19 presents to optimise fashion’s value chain in the belief that, in the longer term, businesses will emerge on the other side with more resilient models to prevent and combat future crises.
“This crisis is a powerful wake-up call to industry leaders and governments to look beyond short-term measures and to transform current market mechanisms and business models,” the report states.
Kruse adds, while sheer survival is the top priority for many, the pandemic presents an opportunity to re-evaluate the lexicon of fashion and, by default, its entire system of operations.
“I urge fashion leaders to rethink and rebuild systems in a collective effort to ensure a just and resilient future post-pandemic. I acknowledge that this is not an easy feat, which is why we have updated the CEO Agenda as a tangible tool to help CEOs ensure that their companies come out on the other side with sustainability at their core and more resilient than ever.”
Specifically, the agenda outlines six opportunities for CEOs to rebuild resilient and sustainable businesses post-pandemic:
- Map social and environmental impacts along the value chain
- Build trust and brand loyalty
- Raise the bar on supplier relationships and shift to equal partnerships
- Address stock levels and markdowns by scaling new business models
- Accelerate the digitalisation of business processes
- Shape the e-commerce infrastructure of the future
While brands and retailers are re-organising for the new normal post-Covid-19, there is a range of win-wins to embedding sustainability in the recovery of their businesses, including the fact that stakeholders are also shifting towards more sustainable practices, GFA says.
Indeed, two-thirds of consumers state that sustainability has become even more important to limiting the impact on climate change following Covid-19, according to McKinsey & Company’s post-Covid-19 consumer survey.
“Covid-19 is undeniably the biggest challenge for the fashion industry that we have ever seen, with an unprecedented impact on businesses and the livelihoods of employees,” says Karl-Hendrik Magnus, senior partner and co-leader of apparel, fashion and luxury group at McKinsey & Company.
“The sustainability of the fashion industry is becoming significantly more, not less, important to consumers, investors, and regulators as a result of this crisis. Fashion industry leaders should, therefore, renew their commitments and find ways to make use of the crisis as an opportunity to accelerate the transformation towards more sustainable business models.”
Given the global nature of the industry, the agenda states coordinated action is essential to overcoming the current crisis and calls for businesses, governments, and worker representatives to work collaboratively to establish shared roadmaps.
“This includes an overall policy approach that promotes sustainability along the value chain and facilitates the emergence of new business models and a transition to a more circular economy. Reshaping and rebuilding the industry will require ambitious recovery plans and adequate support from governments where political frameworks exist to develop alternative models of prosperity.
“This moment presents an opportunity to emerge as a resilient fashion industry that is future-proof for crises to come. Together, we aim to build a thriving industry that creates prosperity for people and communities by working within planetary boundaries, reversing climate change and protecting biodiversity. Only collectively can we shape our common future.”
The updated agenda builds on the January edition which outlined the importance of redesigning traditional concepts of growth and looking beyond short-term financial incentives.
Click here to access the CEO Agenda 2020 – Covid-19 Edition’ in full.