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What: A quick overview on different sustainable strategies in the fashion and retail industry

Why it is important: There are several ways for a company to become more sustainable

While in an April survey of European consumers by McKinsey, more than 60% of respondents said they considered the way brands promote sustainability as a factor in purchasing decisions, it seems like sustainability has reached a tipping point. The issue is now shifting from just another tool to capture brand value or market share to a condition for companies to secure their relationship with customers, partners, employees and investors.

The most common definition of sustainability is the one sustainable development, defined by the United Nations in 1987: “sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Sustainable development has three goals: economic development, social development and environmental protection.

A sustainable business is a business that has minimal negative impact on the global or local environment, community, society, or economy. A business that strives to meet the triple bottom line (social, environmental and financial), that incorporates principles of sustainability into each of its business decisions, that supplies environmentally friendly products or services, and/or that has made an enduring commitment to environmental principles in its business operations.

The garment industry

McKinsey reports that global production of clothing doubled between 2000 and 2014. Over that same period, the average number of garments purchased each year rose by 60%, and the Intergovernmental Panel on Climate Change (IPCC) has calculated the fashion industry produces 10% of the global carbon dioxide emissions every year, while it is estimated to use around 1.5 trillion litres of water annually. And while concerns have been rising about pollution, the garment industry has also been accused of unethical labour practices since the Rana Plaza disaster in 2013.

Beyond collective pledges and initiatives from the industry (the Fashion Industry Charter for Climate Action in 2018, the CFDA Sustainability Initiatives in 2019, and the Fashion Pact in 2019), the growing importance of sustainability issues, not only for consumers but for all their groups of stakeholders, has pushed brands to implement actions, initiate critical changes and even adapt their model accordingly. And some have seen in sustainability a window of opportunity to differentiate from their competitors, to engage with a new younger audience and to thrive.

A brand like Everlane mixes sustainability with transparency and builds strong relationships with factory owners to make sure they meet Everlane’s high ethical standards. Everlane also recently rolled out a line of clothing made from recycled plastic bottles and other reused materials. Patagonia uses sustainable materials as well and helps customers repair their clothing instead of buying new items. The brand follows fair-trade practices and closely monitors its supply chain to make it safe for both the environment and workers. And because the products are more sustainable, customers are encouraged to recycle old Patagonia items and purchase second hand.

Gucci is now in the middle of a 10-year strategy that plans for the company to reduce its total environmental impact by 40% within its direct operations and across the entire supply chain. It has also pledged to reduce by 50% its greenhouse gas emissions by 2025. Gucci is ahead of schedule and already close to achieving its 2025 targets, as its results for 2019 reveal a 39% reduction for the house’s combined impacts and a 37% decrease in gas emissions alone. Even H&M is moving away from the fast fashion model with its Conscious collection, made of materials like organic cotton and recycled polyester. By using eco-friendly fabrics and more sustainable production methods, the company hopes to reduce its environmental footprint. Customers can also recycle unwanted garments at H&M stores and get a discount for a future purchase. As a whole, H&M has a goal to use only sustainably sourced materials by 2030.

Started from a challenge from the CEOs of Walmart and Patagonia in 2009 to develop a common index that would measure the environmental performance of clothing products, the Sustainable Apparel Coalition created the Higg Index. Now used by more than 10 000 manufacturers worldwide, it is a suite of tools that enables manufacturers, brands and retailers to accurately measure and score a company or product’s sustainability performance.

IADS note: With main concerns around pollution, emissions and workers’ labour conditions, the garment and fashion brands concentrate effort on more circularity and more transparency, while tools like the Higg Index monitor data behind the sustainable claims and allow for the customer to verify the truth of the statements.

The brick-and-mortar retailers

Besides having recently open its first second-hand store and launched a subscription service for office furniture and kitchen cabinets, Ikea keeps going greener with more circular products, more sustainable stores and lower emissions. The company has lately made commitment to only use renewable and recycled materials in its products by 2030, to remove all single-use plastic products from its range globally and from customer and co-worker restaurants in stores by 2020, to achieve zero emissions in home deliveries by 2025, to reduce the total Ikea climate footprint by an average of 70% per product by 2030, and to expand the offer of affordable home solar solutions to 29 Ikea markets by 2025.

Walmart has started in 2005 to initiate positive changes across global supply chains. In 2019, the company powered an estimated 29% of their operations with renewable energy and diverted 80% of their waste from landfills and incineration globally. The world’s largest retailer sets goal to become a regenerative company by targeting zero emissions across the company’s global operations by 2040. Walmart and the Walmart Foundation are also committing to help protect, manage or restore at least 50 million acres of land and one million square miles of ocean by 2030 to help combat the cascading loss of nature threatening the planet.

In October, British supermarket chain ASDA has opened a sustainable trial store and unveiled a new plastics reduction strategy. Developed in partnership with some of the UK’s most popular household brands, the store is designed to help shoppers reduce, reuse and recycle easily. Asda will use the store to test and learn which elements of its new offer appeal most to customers and can be developed at scale to be potentially rolled out to more locations in 2021. The store has huge refill stations, fresh grocery sold in loose and unwrapped format, recycling facilities for items that are difficult to recycle, a new community zone for pop ups and partnerships with charities and a partnership with a vintage wholesaler who will be selling bespoke vintage clothing from well-known brands.

IADS note: The retail global activities with big-box stores imply for the operators to address the main issues of massive waste and gas emission with a focus on circularity. Using less or renewable energy, upcycling materials and cutting the waste down dramatically with a reduced amount or no packaging are here the most prominent axis of improvement.

What about Amazon?

Last year, Amazon’s carbon footprint grew 15% to hit the equivalent of 51 million metric tons of carbon dioxide. Facing criticism for the environmental impact of its business and the poor working conditions in the company’s warehouses, Amazon is joining a growing list of companies seeking to target sustainability-conscious consumers.

After the company co-founded The Climate Pledge in 2019, a corporate commitment to reach carbon neutrality by 2040, and launched earlier this year a $2 billion fund focused on supporting businesses and innovations that will help decarbonise the economy, the e-commerce giant is now starting to label products that meet select sustainability certifications on its U.S. website. To qualify for Amazon’s new Climate Pledge Friendly Label, products will have to achieve at least one of 19 certifications that guarantee the item has a reduced environmental impact. Certifications selected include Cradle to Cradle, Fairtrade, the Global Organic Textile Standard and clean chemistry standard Bluesign Product. More than 25 000 products from the fashion, beauty and household goods categories will be included in the programme. Since 2015, Amazon has also been working on reducing the weight of outbound packaging by 33% and eliminated more than 900 000 tons of packaging material, the equivalent of 1.6 billion shipping boxes. With Shipment Zero, Amazon sets the goal to make all shipments net zero carbon, with a goal of delivering 50% of shipments with net zero carbon by 2030.

IADS note: Besides a global strategy to reach carbon neutrality and a constant effort to cut the waste down by working on packaging, the e-commerce giant is now creating its own sustainable label, matching existing certifications, and designing its own externally-verified certification to identify products that requires less packaging and energy to be shipped.

The department stores

Department stores still mostly consider sustainability through the products they sell, but some of them are starting to cultivate a broader approach to sustainability with more conscious and collaborative ways to make business, that are better aligned with the customers’ new expectations and the brands’ own agenda.

Galerie Lafayette launched Go for Good in 2018 to make fashion socially and environmentally more responsible, with measurable actions for the group to became a more ethical employer, a driver of sustainability with lower emissions, and to use more upcycling and traceability for the products. Last year, the company turned the movement into an ongoing sustainable fashion initiative with higher goals, and has also initiated a national community consultation process with Paris Good Fashion and a group of partners to develop responsible fashion for the future. Open to anyone until late October and accessible though make.org, the consultation aimed to gather suggestions from at least 100 000 people on the sustainability commitments they expect.

After Project Ocean in 2011, Selfridges launched in August Project Earth, a five-year sustainability plan introducing clothing rental, a second-hand fashion shop, beauty pack recycling, refill services and a “concierge” service to help organise product repairs. As part of the plan, Selfridges is working with brands to promote recycled materials and more sustainable fabrics. With the multi-stakeholder initiative, the group is also pledging to reduce greenhouse gas emissions by 64% from its stores and office by 2023, to continue to purchase 100% certified renewable electricity, to eliminate waste at source by working with suppliers to reduce unnecessary packaging, to continue to address food waste in restaurants, including continuing to donate unwanted food to donation partners, and to offer every team member up to five days’ volunteering a year.

Interviewed by The Guardian on the occasion of the launch, Anne Pitcher, Managing Director of Selfridges, sees that “the pandemic has changed everybody’s thinking forever”, and shares her feeling that “we’ve all changed and people will care not only about how you do business, but how you place people and planet at the heart of your thinking.”

IADS note: While it remains crucial for department stores to ensure what they sell is socially and environmentally always more responsible, like the fashion industry does, they should also keep broadening their vision to sustainability issues attached to supply chain and operations. Like retailers, they could design and implement their own ways to better reduce emission and waste to become more circular. And because sustainability is also about social responsibility, they should continue their efforts to stand as responsible employers, inclusive companies, and active members of their local community.

Is sustainability a real opportunity for growth, or just sound resources management?

The pandemic has dramatically increased stakeholders’ expectations for a more socially and environmentally responsible business, and sustainability is a window of opportunity opened as consumers and brands re-evaluate the business models they want to support.

In a comprehensive business case for sustainability published in 2016, the Harvard Business Review reminds that sustainability efforts clearly result in a positive impact on business performance. They drive competitive advantage through stakeholder engagement, help improve risk management, foster innovation, improve financial performance, and help building customers loyalty and attracting and engaging employees.

Interestingly enough, the same article also states that companies managing their resources efficiently lower their costs and achieve better results (this applies to water, energy and other resources). Could that be called sustainability efforts? All the examples shown here, be it from fashion brands or retailers, are Involving additional activities, often made visible by the customer. In other words, being sustainable means investing more and costing more (even if, in the end, the customer bears the additional cost).

Is that the only option for department stores to explore? Or can sustainability simply go hands in hands with efficient and good management. In this case, how to make it visible and desirable to the customers?

Credits: IADS (Renaud Pillon)