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Nearly a Third of Fashion Brands Aren’t Acting on Sustainability

The fashion industry is making strides with sustainability, but it’s still far from the rosy-cheeked vision of health it could be. In a report released Wednesday, the Global Fashion Agenda (GFA) gave the industry a “pulse” score of 38 out of a possible 100—6 points higher than the 32 it received last year but leaving plenty of room for improvement nonetheless.

The 2018 edition of the “Pulse of the Fashion Industry” report arrived ahead of the annual Copenhagen Fashion Summit, which the sustainability-focused leadership forum will fete in the Danish capital from May 15 to 16.

Produced in tandem with researchers from the Boston Consulting Group—and backed by data from the Sustainable Apparel Coalition’s Higg Index—the 124-page assessment makes a profound business case for why brands and retailers need to pivot toward ethical practices that benefit both people and planet. Adopting certain best practices, whether by using lower-impact fibers, improving chemical management, or improving water efficiency, can boost a company’s Earnings Before Interest and Taxes (EBIT) by 1 to 2 percent, GFA said. 

“The fashion industry has a responsibility to continue to improve its environmental and social performance,” the report said. “As one of the largest and most creative industries, it has a vital interest in securing a prosperous and sustainable future.”

But while 75 percent of brands and retailers surveyed showed an overall uptick in sustainable performance over the past year, progress among the strongest and weakest of these companies has stalled, “each for different reasons,” the study said. Less impressive, nearly one-third of the fashion industry has yet to take action.

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“Nearly all of this year’s progress came from companies in the mid-price segment,” the report noted. “This segment accounts for almost half of the industry by revenue, so progress here is encouraging. However, other industry segments showed little progress in addressing their environmental and social footprints.”

Among executives polled, 52 percent reported that sustainability targets serve as as a “guiding principle” for almost every strategic decision they make—up from 18 percentage points last year. Similarly, the number of executives who said they have multiple sustainability targets within their companies rose from 56 percent to 66 percent.

While the improvements are encouraging, the results also “speak to the need for still more movement toward increasingly responsible practices,” the report said.  

The fashion industry, GFA said, requires a “deeper, systemic change,” particularly if it’s to move from the linear cradle-to-grave system to a more circular economy, where products are created to be reused and recycled rather than condemned to a landfill at the end of their lives.

And existing solutions and best practices, it added, won’t be enough to get us there. As momentum from existing solutions start to level off, continual innovation will be critical. So will driving collaboration—not only among brands and retailers but also by involving suppliers, investors, regulators, NGOs, academics and consumers.

“Individual companies recognize that they cannot create this disruptive change on their own—the industry as a whole must develop partnerships and ecosystems that can commercialize and scale the most promising innovations on the horizon,” the report said.  “This type of collaboration is what will achieve the speed of change needed to boost the fashion industry’s environmental and social performance—and profitability—in the long run.”