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Fashion CEO Agenda: ‘We Have to Act, and We Have to Act Now’

The good news is the fashion industry is embracing new sustainable materials, business models and ambitious science-based targets at a never-before rate. The bad? It’s not doing so quickly—or systemically—enough to avoid destructive levels of global warming.

“While we have to remain optimistic, we also have to realize that we as an industry are not moving at a fast-enough pace, and we are not on the trajectory of the Paris Agreement of 1.5 degrees,” Morten Lehman, chief sustainability officer at Global Fashion Agenda, a Copenhagen think tank, said Wednesday at the launch of this year’s edition of the Fashion CEO Agenda, its fourth. “So we have to act, and we have to act now. And this is where leaders have to step in.”

Part tool to help fashion leaders allocate resources for the greatest sustainability impact, part “vision statement” that highlights the imperative for social and environmental change for the sector at large, the Fashion CEO Agenda outlines key priorities that businesses must focus on to future-proof both their interests and those of the planet.

This year’s framework, which the Global Fashion Agenda co-authored with its strategic partners, including Asos, Bestseller, Fung Group, H&M Group, Kering, Nike, PVH Corp., the Sustainable Apparel Coalition and Target, homes in on five key environmental and social concerns: respectful and secure workplaces, better wage systems, circular systems, efficient use of resources and smart material choices.

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Covid-19, the Agenda said, has “exposed” the importance of social safety nets and fair wages. While research suggests that many factories fail to comply with local minimum-wage laws, even those minimum wages are often too low to meet the basic needs of workers under regular circumstances, let alone during a global health crisis. Fashion also continues to strain the use of limited natural resources such as land and water. It will take a “major innovation push,” it said, to improve existing materials and develop new materials that are less resource-intensive and have the potential to be circulated back into the garment cycle.

None of these issues is simple, the organization admitted. All require “internal enablers,” such as business model innovation, supportive governance and traceability, along with “external” ones like consumer engagement, investor incentives and legislation to succeed. The social and environmental aspects of sustainability must also be achieved hand in hand—neither can be accomplished without consideration for the other.

“This will at times be an uphill battle—it won’t all be win-win,” Lehman said. “And sometimes the returns on investments will not be there in the short run. But the consequences of not acting now are much graver and much more costly than if we don’t act.” The goal of the Fashion CEO Agenda, he added, is to provide a “positive vision of a thriving industry that creates prosperity for people and communities, reverses climate change, protects biodiversity [and works] within planetary boundaries,” and in so doing, “inspire bold action.”

A healthy fashion industry is one that creates prosperity for all its stakeholders, not just the ones on the uppermost rungs, said Miran Ali, vice president of the Bangladesh Garment Manufacturers and Exporters Association.

“For the person on the sewing machine, that they have a lifestyle and a livelihood that allows them to have decent living conditions, decent education for their children, decent healthcare and essentially a decent life,” he said. “That for me is the most important thing.”

The Fashion CEO Agenda is critical because it defines a “common direction” for all stakeholders to drive systemic change, said Helena Helmersson, CEO of H&M Group, which owns & Other Stories, Arket, Cos, Monki and Weekday, in addition to its eponymous brand. Rather than constrain, a framework can drive creativity internally, she said, citing H&M’s own forays into rental, resale and recycling.

“All this [is] not coming from me or the top; that is coming from people within the organization who are really passionate,” Helmersson said. “And this is a never-ending journey. I see things every week that we can do even better, to kind of develop this system further.”

“Integration” is a word she abides by. “As you make decisions, how do you make sure that sustainability is as integrated as possible?” Helmersson asked.

But brands need to act sooner rather than later. Textile manufacturing emissions are expected to surge by 60 percent, by 2030, which is around the same time that the planet needs to decarbonize, said Kirsten Dunlop, CEO of the European Institute of Innovation & Technology Climate-KIC, the European Union’s main climate innovation initiative. “Every year after 2030, we are eating into a future that is genuinely unlivable—not just unsustainable,” she added.

Fashion bosses, particularly those who find it difficult to let go of long-held beliefs and practices that have served them well, need to think in terms of “value at risk,” Dunlop said.

“The importance here in how to engage with climate is to think of possibility—not plausibility or probability,” she said. “You need an approach to innovation that gives you options and gives you ways of building confidence for alternative business models that will not only be able to [help you] compete, [but also] survive, contribute and build reputation and credibility in a world that increasingly starts to make judgments on which side of history you are falling on when it comes to solving the greatest challenge that faces humans.”

Such a tack, Dunlop added, requires brands to think of business model transformation, not of innovation as a marginal improvement or diversification in products and services. “This is wholesale business renewal” that begins with understanding the scale and urgency of the challenge, then working back to evaluate how a company’s assets, resources and capabilities are at risk, she said. Brands then need to respond with a “portfolio of innovations”—“not one or two things that you could do, but multiple ways of thinking about how do you change dyes and chemicals, how fiber production, how do you change logistics, how do you change customer perceptions, how do you change waste management.”

Staying static could be dangerous in more ways than one, particularly as tougher policies move through the legislative pipeline, Dunlop noted. “This is ultimately about remembering that the greatest risk of any CEO running a business in 2021 and looking forward into the next 10 years is not the risk of dramatic change, which there will be, [but] it’s the risk of attachment to the way you’re doing business now,” she said. “And the incredibly difficult challenge of letting go, in time, before it’s too expensive, too late and too punitive.”