July 4, 2017
A Weak Pulse
By Jonas Eder-Hansen
Chief Content Officer, The Global Fashion Agenda

The global apparel industry needs to unite around an agenda for change in how its practices impact the environment and society.

What do you know about the fashion industry and should you even care? Probably more than you think.

The fashion industry reaches billions of consumers with its powerful and convincing communication channels and, whether we like it or not, almost dictates what many of us decide to wear today and tomorrow. With such a massive reach and influence on human behaviour comes great responsibility. A responsibility that becomes even more clear when looking at the sheer size of the environmental and social impacts of the industry – from sweat-shops to packaging filling up in landfills –  and the tasks ahead to curb the projected future of the industry.

A recent ”pulse check” of the industry’s environmental and social sustainability performance revealed a weak industry with few sustainability champions living up to their responsibility. In this murky forecast, however, also lies great business opportunities for the industry. But action is required now, and it must be done differently than the past – continuing business as usual is simply not enough.

The fashion industry has a clear opportunity to act differently, pursuing profit and growth while also creating new value for society and the world economy. This comes with an urgent need to place environmental, social and ethical improvements high on the agenda. Big players have already started the journey: H&M, Kering Group, Li & Fung and Target all have various sustainability initiatives currently underway.

It’s true that in the past decade, the fashion industry has been an incredible engine of global development and progress on sustainability. Awareness is growing slowly; individually, companies are optimizing business practices to limit their negative impact on the environment. Kering’s Environmental Profit & Loss initiative is a great example of how a large luxury-goods company works to measure its environmental impact and then puts into in place strategies to minimize that impact. But with current trajectories of garment production and consumption, pressures on natural resources and societies around the globe will intensify by 2030 to the point of threatening industry growth itself.

The Global Fashion Agenda, in collaboration with Boston Consulting Group, has made an in-depth assessment of the industry’s environmental and social performance – the first edition of the Pulse of the Fashion Industry report. Drawing on the Sustainable Apparel Coalition’s Higg Index – a survey of more than 90 senior managers responsible for sustainability issues and a variety of other sources –

it offers the first comprehensive fact-based survey on the health of the industry – with a “Pulse Score” by type of company, size, region and stage in the value chain.

As of today, the sustainability “pulse” of the industry is weak. First, company size, far more than price, correlates with a higher pulse score: most large fashion brands show progress, but the great mass of small to midsize firms representing around half of the market — a blind spot in the industry — have done little to improve their sustainability. Secondly, global apparel consumption is projected to rise by 63 percent, to 102 million tons by 2030, increasing the need for the fashion industry to address its environmental and social footprint. As populations continue to grow and the planet’s resources are stretched to their limits, the industry will face strained access to resources and materials – ultimately putting profitability at risk. Innovations in production, materials and practices will become a necessity to survive. Global supply chain manager Li & Fung recently rolled out its “HER” program; promoting health, financial inclusion and gender equality to over 85 of their factories.  Such sustainability initiatives can present a viable case study for individual businesses today and in future.

Improving its environmental and social performance would not just advance the industry’s commercial prospects. It would also add as much as €160 billion ($183 billion) by 2030 in annual value to the world economy. Yet it also shows that even if most of the industry implemented today’s best practices individually, it would not be enough to capture this value and close the gap. As of yet, too few concerted, cohesive, persistent initiatives bring together players from across the fashion industry ecosystem, allowing them to implement novel solutions that go beyond today’s best practice. The Sustainable Apparel Coalition is a great example of a multi-stakeholder initiative with the potential to drive transformational change, with its membership currently representing around 40 percent of the global apparel and footwear industry (by turnover), also including leading NGOs, academic institutions, government agencies and private solution providers.

To enhance the industry’s current and future position – and forestall excessive regulatory intervention – it’s time to act differently. The industry must move beyond fragmented individual actions. Through collective efforts such as the Sustainable Apparel Coalition and Global Fashion Agenda, the industry can unite around an agenda for change, drive the needed systemic change and work jointly on disruptive innovation. By further consolidating existing initiatives and fostering ground-breaking innovation, fashion can collectively galvanize change at scale and start living up to its responsibility at par with its wide reach.

Jonas Eder-HansenJonas Eder-Hansen is the chief content officer of Global Fashion Agenda. He is responsible for securing strategic outcomes for the Global Fashion Agenda and its flagship event, Copenhagen Fashion Summit – the world’s largest event on sustainability in fashion. Jonas is a graduate from Copenhagen Business School and since 2005 has been the Research Director at the CBS Centre for Corporate Social Responsibility. Since 2011 he is the Development Director of the Danish Fashion Institute – a network organization working to promote Danish fashion internationally.