Conscious consumerism is reaching an all-time high, and sustainability is the buzzword at the tip of every industry insider’s tongue.
In an age where consumers are more informed than ever about the ethics and impact of their purchases, can brands truly deliver on promises to do better?
At last week’s Sourcing Summit New York, industry experts spoke to the pressures brands and retailers are currently feeling to streamline supply chains for more efficient, environmentally sound operations.
According to McKinsey partner Karl-Hendrik Magnus, consumer attitudes about sustainable shopping have shifted at a shocking rate. The firm’s latest sustainability report, which launched last week at the Summit, revealed that increasingly vocal Gen Z consumers are twice as likely to associate themselves with sustainable fashion than their Gen X counterparts.
The younger generation’s purchasing power becomes more potent with every passing season, and industry executives are taking note.
Magnus said that more than half (56 percent) of industry respondents indicated that sustainable sourcing is priority on their CEO’s agenda. Issues like resource efficiency, developing sustainable materials, reducing plastics and packaging, digitization, and creating zero-discharge processes are increasingly pressing topics that must be dealt with swiftly.
And as brands work through challenges buried throughout their supply chains, many are also struggling to find simple, compelling language to convey their efforts and advancements to consumers, Magnus said.
Despite the disconnect between brands and their shoppers, Amaya Guillermo, head of corporate affairs in the Americas for Inditex, believes that consumer passion is the lifeblood of the sustainability movement.
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“Sustainability is a trending topic for young consumers like millennials and Gen Z. We hope it’s not just a fashion trend, because we need to take advantage of this social movement in order to drive real change in our sector,” she said.
The fast fashion behemoth is the largest apparel company on earth, reaching more than 93 markets worldwide with over 7,200 stores. While it would be easy to dismiss Inditex as a perpetuator of a broken retail culture, Guillermo said the company first started exploring sustainable supply chain options in 2002, and has reframed its plan with new goals and initiatives every four years since.
Inditex is working to train designers to use new raw and sustainable materials, as well as educating them on the benefits of the circular economy and new technologies for production, Guillermo said, and the company is currently working with researchers at MIT on circularity research.
“Our objective is that in 2025…100 percent of the cotton, linen and polyester will be totally recycled, organic or sustainable,” she said. That goal will require close work with all tiers of suppliers.
But the company has had some practice. In 2016, Zara launched Join Life, a sustainable collection made with organic cotton, recycled wool and Tencel.
“From the beginning, you can’t have your whole collection with the most sustainable raw materials,” Guillermo said. “It’s a work in progress.”
At PVH, similar talks about how quickly progress can and should be achieved are taking place. Marissa McGowan, the company’s senior vice president of corporate responsibility, said that PVH has just announced its new set of environmental targets for 2025 and 2030.
Still, she said, “An interesting discussion we’re having internally is whether we’re going to switch from ‘nice-to-have’ to ‘must-have,’” on certain objectives.
Because of consumers’ quickly evolving expectations, the retail climate could shift “from a place where consumers weren’t willing to pay more, to a place where sustainability becomes table stakes,” she said, and the company wants to be prepared to deliver compelling results.
PVH, which owns brands like Tommy Hilfiger, Calvin Klein and Izod, is working to revamp its supply chain, with efforts related to carbon emissions and material innovations, as well as tech investments in RFID and blockchain.
“The most important relationship is with your supply chain, and they’re in the best position to help us make the changes we need to make,” McGowan said.
Dr. Cyrus Wadia, a former consultant for Nike, agreed that the most vital advancements happen at the supply chain level—but often, brands don’t have full visibility into its different tiers.
“The majority of the environmental footprint lives in Tier 2 and Tier 3,” he said. “Often times, the sourcing team is just looking at Tier 1.”
If those suppliers are working with others who haven’t bought into a company’s sustainable vision, it’s a recipe for disaster.
“You need to source through partners who have a culture of change,” Wadia recommended. Dependable Tier 1 partners can effectively manage others upstream in the supply chain, he added.
When it comes to sustainability, a one-size-fits-all supply chain revamp shouldn’t be the goal, he warned. Some companies have poured commendable effort into corporate social responsibility, and the transition to revamping product can prove more than challenging.
“Innovation is a product of having a destination… But it’s also about process and culture,” he said. During his time working with Nike, Wadia said he worked to “meet people where they were” rather than trying to disrupt the company’s unique culture and values.
“All companies are on a different journey,” he added.