Sustainable fashion is defined as a process of changing the fashion industry in the way that their products are manufactured, and taking care of environmental and socio-economic aspects.
To put it simply, the industry will be sustainable when the system works without leaving a negative footprint.
To foster this goal, companies need to look at their value chain and identify which changes they need to implement. Businesses should think realistically. As a recent source of BCG suggests, “corporations should optimise for both social and business value when reshaping their business models”. The new models need to be created in a way that products and services contain social value too.
The company’s maturity in terms of sustainability can be assessed by looking at their structure and compliance, for example BCG provides a spectrum from company Corporate Social Responsibility (CSR), to “sustainable business model innovation” (S-BMI).
What does a Sustainable Business Model consist of?
Industry leaders have already made many steps towards addressing sustainability.
The Global Fashion Agenda released a very useful and insightful report, the CEO Agenda 2020. The co-authors are strategic partners like ASOS, Bestseller, H&M, Kering, Nike and Sustainable Apparel Coalition. Together they invite industry leaders to investigate new business models and take advantage of the current fashion industry status by providing a practical guide with trends and recommendations.
The Global Fashion Agenda highlights eight sustainability measures which can drive transformational change:
Supply chain traceability systems implementation
Reversing climate change by implementing eco-production systems
Efficient use of water, energy and chemicals
Respectful and secure work environment creation
Sustainable material development
Implementation of a circular fashion system
Promotion of better wage systems within the industry stakeholders
Fourth industrial revolution understanding: taking the advantage of the opportunities in digitalization.
The perspective of industry leaders
The CEO Agenda report includes the perspective of industry leaders. Here are a few of them.
“Heinz Zeller, Principal Sustainability at HUGO BOSS, shares his point of view that blockchain has the potential to improve a fashion brand’s sustainability performance.”
“Orsola de Castro, the co-founder of Fashion Revolution, believes that increased brand transparency is required, especially as there is a growing interest from consumers to know how, where and by whom their clothes are made.”
At Kleiderly, we believe that circularity is the opportunity for businesses in the fashion industry to create new concepts and renovate their business models.
Finding new business opportunities through circular business models
Striving for sustainability leads inevitably to changes in business models. In this sense, innovating the value chain helps to create a strategy that differentiates brands from each other!
New business concepts are developed by implementing a new circular fashion system which is one of the sustainability measures suggested by the CEO Agenda 2020. The circular economy principle is a new way of thinking to design products to have a second, third, and fourth life.
Today, a research from the Ellen MacArthur Foundation states that less than 15% of clothes are collected for recycling and less than 1% of textiles is recycled into new clothes or anything else.
In fact, every second, a rubbish truck full of textiles is thrown out.
How can we get closer to a solution?
Design, produce, sell and collect products that enable the reuse and recycling of post-consumer textiles at scale.
This is how the team at the global fashion agenda define the adoption of circularity in business models. In their opinion, it is important to make design and product development teams in the fashion industry aware about the decisions they make during the product creation phase. Including activities such as designing for durability, disassembly, recycling. At the same time retailers too have an important role. They should increase their efforts to collect second hand clothes and encourage consumers to get involved in circular initiatives.
Another interesting point to discuss is the analysis of the industry progress, to understand who are the main players striving for sustainability in the fashion industry. The last Pulse Score report from the Global Fashion Agenda goes into this topic. They made an analysis by breaking down the industry by segment and size in order to reveal the patterns.
The entry-price segment is the one which is performing best in terms of growing in sustainability. This trend was explained by two main factors:
Integration of sustainability in the strategy corporate identity, decision making, governance, reporting and tracking.
Membership with associations such as the Sustainable Apparel Coalition which helps to set targets, define strategies and build governance foundations.
The premium segment is characterized by luxury small and large players. Showing good performance in sustainability projects, the innovative brands in this group are making achievements by collaborating with other fashion players and also other industries, such as the agricultural sector.
Although the continued progress is encouraging, its decreasing speed is concerning!
The UN Sustainable Development Goals estimated that global carbon emissions need to be reduced by 45% from 2010 levels by 2030 if global warming is to be limited to a 1.5°C increase. Also net zero carbon emissions are to be reached around 2050.
Unfortunately, the pulse declared there is still a significant part of the global fashion industry (10- 15%) that has not yet started any action towards more responsible practices and if the industry does not implement changes at a faster rate, it will not be able to achieve the United Nations Sustainable Development Goals or meet the Paris Agreement.
The journey towards more sustainable value chains is not for solo initiatives, but rather for collaboration. Remember you can learn together with other entities in your sector: take the best suggestions from the experts and find the right partnership for your success! By adding some exclusivity to your business and using creativity, it is easy to differentiate from the others! We can help you with your path towards circularity, contact us!