- Simone Preuss |
The Covid-19 pandemic has caught the world and the apparel, footwear and textile industries unprepared and the resulting societal and economic shutdowns present unprecedented challenges. While sustainability initiatives were becoming the norm in the industry across varied segments such as luxury, sport, fast fashion and value retail, the crisis now strains the commitment of brands and retailers to sustainability. However, it is more relevant than ever as a recent study finds that the current crisis “simultaneously demands that companies accelerate their progress on sustainable initiatives in order to be competitive in the market that will emerge after the pandemic”.
The study “Weaving a better future: Rebuilding a more sustainable fashion industry after Covid-19,” published by researchers of the Boston Consulting Group (BCG), the Sustainable Apparel Coalition (SAC) and technology company Higg Co, known for their Higg Index for consumer goods industries, sets out to prove how crucial it is for fashion brands, retailers and other industry stakeholders to continue following sustainability goals during the coronavirus crisis and beyond.
Why rebuilding a more sustainable fashion industry after Covid-19 is crucial
“The metrics we use to measure the health of our businesses should also include the health of our planet. All of us have to double-down on sustainability, reducing environmental impacts and increasing social justice,” explains Rick Ridgeway, vice president of public engagement at Patagonia.
While the fashion industry is trying to absorb the blow it has been dealt by retail businesses being temporarily closed, declining customer spending and workers in countries like India, Bangladesh and China being furloughed because of reduced or cancelled orders and an impending economic crisis that is expected to wipe out more than 30 percent of the industry’s business in 2020 according to a BCG scenario analysis, concerns ranging from sustainable materials sourcing to carbon reduction and workers’ rights have been relegated to secondary considerations at best in favour of managing short-term economic distress.
“However, surveys with key stakeholders, study of prior global crises and analysis of economic trends and consumer sentiment make it clear that fashion risks irrecoverable self-inflicted wounds if it abandons sustainability and value chain partnerships in the face of Covid-19. While sustainability is in danger in some areas of the industry, companies that embrace it will be among the leaders of a resurgent fashion industry on the other side of the pandemic,” cautions the study and identifies four areas to avoid backsliding on progress and to actively prepare for a changing industry.
1) Protect critical assets to survive the economic crisis
Fashion companies have to concentrate on their assets and make sure to safeguard workers, employees, capital, value chain partnerships, channels and the trust and support of their customers. “This moment is an opportunity to remove unnecessary complexity and costs, in order to prepare for reinvestment,” advises the study.
“The priority now has been to maintain cash flow as our facilities have not been able to operate and our customers stores are also closed. Since the commencement of the pandemic we have focused on addressing the social needs of our associates. We have also been gearing up our facilities with the health and safety requirements that will now be necessary,” shares Nikhil Hirdaramani, director of the Hirdaramani Group, his experiences in the current situation.
2) Solve immediate inventory challenges in partnership with suppliers
Part of protecting one’s supply chain involves acknowledging contracts and paying for complete and near-compete orders and acknowledging cancellation without consultation or collaboration as an unacceptable practice. “Leaders will recognize the importance of open dialogue and constructive partnership across the value chain in order to find shared solutions for protecting worker livelihood and sustaining trust,” recommends the study.
3) Integrate sustainability throughout business recovery strategies
“Sustainability will be an imperative for strong companies after the crisis. Leaders will make sustainability central to post-pandemic decisionmaking, while laggards will view sustainability as an effort to resume once convenient,” finds the study. In fact, in a recent BCG Covid-19 consumer sentiment survey of almost 6,000 consumers in US, UK, Germany, Italy, and China, consumers indicated that they very favorably viewed brands that paid their furloughed employees, repurposed facilities to produce PPE or donated to their communities.
As something that is worn close to the skin, the standards for clothing will not only include durability and good quality but will also become products that are closely associated with trust, well-being and the collective good. “Covid is no excuse to back off from sustainability. Moreover, sustainability will be among key product priorities, together with quality and durability,” confirms Luis Casacuberta, managing director women’s & kids’ at Mango.
4) Accelerate transparency while increasing sustainability ambitions
When taking advantage of digitalisation, innovative business models and end-to-end solutions, transparency will play a central role for companies “in order to assess and demonstrate positive environmental and social impact to stakeholders”.
“The pandemic has forced all of us to take a step back and reset our priorities. One key takeaway that has clearly emerged is that a new transparent model that showcases verified sustainable practices will have an edge over other traditional business models,” states Sanjeev Bahl, founder and chief executive of Saitex.
The study closes by acknowledging the three kinds of companies there are in terms of sustainability - those that have not yet prioritized sustainability, those further along the journey and trailblazers - and how they can succeed in maintaining their sustainability programs and commitments to gain a durable business advantage once the covid-19 crisis end. While those merely starting out in the field of sustainability must use this moment to transition to establish competitive advantage, those companies further along on the sustainable journey have to safeguard progress, maintain essential practices and recommit to central goals. The trailblazers who encourage collaboration and lead industry-wide sustainability initiatives, should continue to be role models as their vision and actions will hasten transformation within the entire sector.
“We see a clear link between sustainability and continued commercial success. Our sustainability ambitions will help us stay ahead of customer demand after this crisis caused by the coronavirus. Both our current and future customer base are calling for more sustainable choices in fashion. Nine out of ten Generation Z consumers believe companies have a responsibility to address environmental and social issues. By committing to sustainability, we can secure our long-term growth, stay relevant to our customers and establish market-leading differentiation against our competitors,” states Kate Heiny, stustainability director at Zalando SE.
“While the road ahead is not yet clear and open questions remain as governments and society navigate the pandemic, a major lesson of the Covid-19 era will be that health, safety and prosperity are intrinsically collective pursuits rather than individual ones. And the apparel, footwear, textile and fashion industries are no different. It won’t be easy to manage a once-in-a-generation economic crisis while taking aggressive action on behalf of environmental and social concerns. But leaders who successfully weave sustainability into their business strategies will leave a lasting legacy: that of a rebuilt and more sustainable fashion industry,” concludes the study.
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Images: “Weaving a better future: Rebuilding a more sustainable fashion industry after Covid-19” study