How fashion can avoid blowing up the Paris Agreement – Vogue Business

Key takeaways:

• The industry is set to produce more than 25 per cent of the maximum carbon emissions possible before global temperatures rise over 2 degrees Celsius.
• Fashion should lobby governments to incentivise sustainable policies that ensure progressive companies don’t operate at an economic disadvantage.
• Supply chains and budgets need to be reevaluated so that cost-cutting isn’t the sole priority.

This year, a clear picture will emerge as to how committed fashion is to sustainability.

Brands have signed en masse to reducing greenhouse gas emissions, buying carbon offsets and developing new sustainable materials — all profound shifts for an industry entrenched in its ways. The jury is still out as to whether this means genuine transformation, but it won’t be for long. “[Fashion is] at a crossroads where one direction leads to a rapid scale-up of implementation that’ll turn it into a real climate leader,” says Liz McDowell, director at environmental organisation Standearth. “The other direction leads to more commitments, but without real implementation…ultimately would be large-scale greenwash.”

An informal survey of experts suggests that the industry has done a masterful job of dabbling in innovation and running pilot projects, but hasn’t yet brought any of it to the scale that’s needed. Today, the fashion industry produces about 8 per cent of the maximum carbon emissions possible if the rise in global temperatures is to be limited to two degrees Celsius. On its current path, the industry could produce more than 26 per cent of those emissions by 2050, according to the Ellen MacArthur Foundation. And for all the commitments made in 2019, progress may have slowed.

Going deeper into the supply chain

Dozens of brands signed on to the Kering-led Fashion Pact last year. The accord recognised, for the first time on a grand scale within the industry, the need for fashion to make changes throughout the entire supply chain, says Helen Crowley, who heads sustainable sourcing at Kering but is currently on sabbatical. “None of this is going to work until there’s a recognition that supply chains are broken.”

But supply chain reform is costly, and most brands don’t own their suppliers, which separates them from associated environmental impacts — and benefits if they invest in upgrades. “There will be places that you will have to take on cost. You just are. How you share that cost, who pays for it — we’re not having these conversations,” says Crowley.

The industry has been watching the expansion of a pilot project Levi’s ran with the International Finance Corporation to help suppliers reduce energy and water use. In the pilot phase, six vendors saved a combined $1 million by making relatively simple adjustments like better insulation and leak detection. H&M is also working with suppliers to encourage investments in solar energy by holding workshops and supporting feasibility studies with projects in China and Bangladesh, says climate strategy lead Kim Hellström. However, the company is not investing directly in these projects.

Governmental carrots and sticks

While some brands may find ways to make sustainability profitable, the industry’s progress could be sped up or hamstrung depending on governmental action. Without policies mandating better practices, companies that spend on sustainability will operate at an economic disadvantage, says Kate Larsen, a former Burberry executive and founder of social enterprise advisory SupplyEsChange. “Until the law requires everyone to take those steps… the playing field is not level.”

One way of nudging brands to invest in sustainable supply chains is for public financing of upfront costs for things like shifting agricultural practices. In turn, brands might commit to buying materials from farms making changes. McDowell also sees promise in the UN Fashion Industry Climate Charter’s call for governments in fashion-producing countries to scale up renewable energy and de-incentivise dirty energy.

“A supplier can install solar on a factory, but they can’t shift the grid,” she says. “The industry can say, ‘Hey, we would like to see cleaner energy sources. We can support that by continuing to do business here.’” That can be costly, but building new coal-powered plants isn’t cheap either.

Fashion also has a significant influence on government decisions where apparel and footwear manufacturing makes up a large portion of exports. Fashion comprises 84 per cent of exports in Bangladesh, but McDowell notes that the South Asian nation is currently planning an expansion of coal-fired plants. Other markets that rely heavily on clothing exports include Cambodia and Pakistan.

In the developed world, legislation with the potential for sanction has changed the behaviour of some brands. Larsen points to the UK’s Modern Slavery Act and California’s Transparency in Supply Chains Act, which led to action from companies that had made only limited voluntary improvements. Some have implemented ethical trade policies or commissioned audits on labour conditions at suppliers or recognised unionisation efforts as, for example, Asos did with a major 2017 agreement. “We don’t have anything like that… on the environmental side,” she says. “It’s still profitable in the short term to use the old model of — use whatever fabric you like, or sell whatever you like.”

There were some efforts last year. The UK Parliament’s Environmental Audit Committee, for example, issued a report with a number of recommendations for the industry. But the government “rejected each and every recommendation… often citing alternative courses of action without committing to any tangible policies”, says Carry Somers, founder of Fashion Revolution, which campaigns for transparency in the industry. (The Government responded saying some of these recommendations were already covered by existing policy.) In an email, an Environment, Food and Rural Affairs Ministry spokesperson recognises that more work is needed, and adds the Government’s forthcoming Environment Bill will enable it “to set sustainability standards for clothing and hold the fashion industry accountable for the disposal costs of the clothes they throw away”.

Then-committee chair Mary Creagh, a member of the opposition Labour party, heavily criticised the Conservative-led government for failing to act. Committee spokesperson Chloe Jago says a new committee to be formed in the coming weeks will decide whether to reconsider the issue.

On a continental level, Fashion Revolution is currently working with partners on a strategy for developing better supply chains. This spring, it will lobby the European Commission to put a proposal on the table. ”In an age of climate breakdown, intangible measures that lack legislation aren’t going to save us,” says Somers.

New business models

More efficient supply chains and technologies, though, can only go so far. “True sustainability is going to challenge business models. We have to be really honest about that,” says Crowley.

Supply chains are currently designed to minimise costs at every step, but becoming sustainable requires valuing things differently. There could be lessons to learn from the B Corporation model, which recognises a triple bottom line for certified companies that values financial profit, but also positive environmental and social impacts.

Companies verify the latter through an assessment of their impacts and must also amend their legal governing documents to require their boards of directors to “balance profit and purpose”, the organisation says. There are over 3,200 B Corps in 70 countries today, up from 671 at the end of 2014. Their sales have seen more than triple the growth of average companies in their categories, according to a 2017 analysis.

That may signal a shift toward the kind of revaluing that Crowley says needs to happen. For consumers, that may mean paying more, but she cautions against simplifying the conversation to one focused solely on cheap goods. “It’s an easy shot to say fast fashion is the problem, but all of us have to look at, ‘What are we valuing?’”
This is a marked difference from trying to make the existing framework more sustainable. A sustainable fashion industry cannot include making the same volume and types of products, albeit with better materials and greater efficiency. “If the industry doesn’t find an answer for overproduction and overconsumption, it will be very difficult to be successful in the transition to a better model,” says Francois Souchet, who leads the Ellen MacArthur Foundation’s Make Fashion Circular initiative.

One potentially lucrative avenue is the explosive interest in clothing repair, resale and rental. The $1 billion rental market, for example, is projected to generate $1.9 billion in revenue by the end of 2023, according to Lyst. While mainly a North American phenomenon, for now, such services are slowly gaining popularity in Europe and Asia, although it remains unclear if they will reduce the impacts of consumer shopping habits, or just shift them.

“The circular economy actually doesn’t exist at the moment. You can contribute to building it,” says Crowley. “But you can’t just talk about upcycling and recycling and say you’re doing a circular economy. That’s just nonsense.”

Editor’s Note: Due to a technical error, the final draft of this story was not initially published. This story has been updated with a response from the UK government. (16 Jan 2020)

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