Blog: Hannah AbdullaEnvironmental supply chain risks to cost companies $120bn

Hannah Abdulla | 22 February 2021

Companies face up to US$120bn in costs from environmental risks in their supply chains by 2026. Those failing to take responsibility for supply chain impacts will fall behind, while businesses who manage and reduce risk through collaboration will become more competitive and resilient.

An incident in which 28 workers died following heavy flooding in an illegal garment factory in Morocco has prompted new calls for a binding international agreement on factory safety and working conditions.

Homeworkers are rarely identified in social audits and remain hidden to many of the brands whose products they are making – but recognising their presence is the first step to improving their welfare.

Digital supply chain mapping platform Sourcemap is participating in a new project led by Verité to support enhanced tracing of goods made with child labour, forced labour, and other exploitative practices.

Meanwhile, a virtual roundtable featuring 270 experts from across the garment sector has explored the way the industry needs to reshape for future success – with a common finding that suppliers need to be at the centre of collaborative initiatives.

The German government has agreed to new legislation that will force companies to comply with social and environmental rules along their global supply chains.

If there's anything globalisation has taught us, it's that countries tend to import each other's problems. For instance, forced labour in China ends up in the cotton unwittingly bought by so many consumers in the west. Then there's the myth of sustainability...

Sticking with sustainability, J.Crew Group has announced that 100% of all cashmere sweaters and non-apparel pieces from the newly launched spring 2021 collection and onwards, will be produced using the Good Cashmere Standard (GCS) certified cashmere –a move it claims is a first-of-its-kind commitment among US retailers.

Apparel giant H&M Group has issued a EUR500m (US$607m) sustainability-linked bond that is aligned to targets such as increasing the share of recycled materials used to 30% by 2025.

VF Corporation has fully allocated the net proceeds from its inaugural green bond issued last year, which totalled about EUR493m (US$594.8m), to 13 of the group's eligible sustainability projects worldwide.

Ten years on from its launch, the Sustainable Apparel Coalition (SAC) says its goals for the next decade are to provide the building blocks necessary to help the industry make smarter and more informed decisions about the products it makes.

A new study is calling for a rethink of fashion education to ensure students are equipped with the data science and data analysis skills needed to thrive in an ever-changing industry.

The global textile dyeing industry is experiencing a global skills gap, now reaching crisis point, as younger people fail to enter the profession, according to a new survey.

On the retail front, US retail sales grew sharply in January as government stimulus payments provided a boost and momentum from 2020's record holiday season carried over into the new year, with consumer appetite for apparel continuing to grow.

Over in Myanmar, clothing industry executives and experts have warned that the country's apparel sector is already suffering because of the 1 February coup, when the military seized power and detained Aung San Suu Kyi and other elected leaders.

Apparel "road warriors" look at the coup in Myanmar and suspect a situation that may be slow to resolve. They also anticipate that prospects are starting to fade.

And in India, more than 1,200 workers at H&M garment supplier Gokaldas Exports are to be rehired after an eight-month campaign by unions.

In our c-suite interview, Eric Dorchies was appointed CEO at Mauritius based Ciel Textile Ltd last July, at a moment when his country's important clothing and textile sector was struggling hard against the impact of Covid-19.  It has not been an easy start to his job but, as he tells just-style, the company is already working on plans to recover from the pandemic.

And in other news, German sporting goods giant Adidas has decided to begin a formal process aimed at divesting Reebok after concluding its assessment of strategic alternatives for the brand.

The Dune Group Ltd has launched a Company Voluntary Arrangement (CVA) proposal as the UK footwear retailer looks for a "vital lifeline" amid its struggles to continue operating through lockdown.

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