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Fashion Will Stay Unsustainable if it Can’t Get the Business Model Right

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The fashion industry’s sustainability efforts are still insufficient. And that’s largely owed to an erred approach to minimizing the sector’s adverse impacts.

What’s needed, according to those leading in the space, is a wholesale overhaul of the fashion industry’s business model—not just more recycled materials, less waste or switching to rented clothing.

While those incremental efforts aren’t for naught, the baby steps could leave fashion behind as consumers forge ahead and take their dollars with them. What’s more, though it may seem sustainability is now the sentiment surrounding the sector, many brands and retailers can’t even count small steps among their efforts.

Here’s a stat to note: according to the Global Fashion Agenda’s (GFA) latest Pulse of the Fashion Industry report, 40 percent of the industry is “doing next to nothing” on sustainability, GFA chief sustainability officer Morten Lehmann said Wednesday at the American Apparel & Footwear Association (AAFA) Executive Summit.

The positive side of that data point is that 60 percent of companies in the industry are making viable forward strides, but they, too, need to “scale and go even deeper,” Lehmann said.

As the middle class grows and fashion’s pace of production continues, Pulse report projections peg global apparel and footwear industry growth of 81 percent by 2030, and that will mean 102 million tons of product.

“The industry is not sustainable today. Today we are using one and a half planets in terms of resources,” Lehmann said. “We are looking at growth projections of 81 percent towards 2030…we are looking at more people…increasing middle classes that are going to demand more clothes. The gap between the sustainability performance and the growth of the industry is only growing wider.”

If fashion presses on with development at its present rate, according to Lehmann, the world will not meet Paris Agreement goals or Sustainable Development Goals or any other environmentally-focused goals for that matter. “If we continue with business as usual, we don’t have the resources to do this, so we really need to rethink the way we run our businesses.”

Sustainability demands a system change akin to what took place in the renewable energy industry—a still ongoing effort to reduce reliance on fossil fuels for energy in favor of sources like sunlight, wind and rain—according to Fashion for Good director of strategy and development Brittany Burns. And while the overhaul won’t be quick and painless, anything less than that won’t cut it today.

Companies really keen to make the change will need to prioritize transformation and embrace what Lehmann referred to as ‘pre-competitive collaboration,’ or setting competition aside to partner with opponents for the sake of the industry at large.

“You cannot do this alone,” Lehmann said. “You cannot solve the waste systems alone. You cannot close the loop on fashion alone…this is not about going from cotton to organic cotton, polyester to recycled polyester. This is looking at the truly brand new, sustainable materials, which we have so many cases of but they haven’t gone to scale.”

The stagnation the sector has seen also has to do with ownership—neither end of the supply chain has taken the reins in driving sustainable change.

“Manufacturers are waiting for brands to do it and brands are waiting for manufacturers to do it, so how do we make those connections?” Lehmann said.

Some companies have taken strides and many have settled on circularity as a cure-all. But even that notion, however positive, can’t overhaul the fashion industry on its own.

“I think the issue is that we are so far away from closing that loop, so I think we just need to get the expectations right,” Lehmann said. “A lot of work has been done in terms of training designers to make sure that the product is actually designed in a way that it can be recycled, but the system has so many holes in it, the infrastructure simply is not there, the materials are not there. So, I think it’s just a matter of being real and saying this is part of the solution for a thriving industry…but we can’t expect it to solve the issues we have now. We have to do a lot more before we focus on that.”

When consumers are credited with wearing garments an average of six times before they’re ready to discard them, circularity could help the problem somewhat, were the garments designed to be repurposed, but if they were designed to close the loop and still end up in landfills, the environment won’t be much better off at all.

Tackling that part of the problem, according to Sustainable Apparel Coalition executive director Amina Razvi, will require rethinking how to reconcile sustainability with some of the more important economic metrics driving the fashion industry—like the sales demands that have brands stocking up on endless inventory they’re no longer sure how to sell.

To start to navigate some of these setbacks in the switch to sustainability, GFA has assembled a think tank with key stakeholders, including McKinsey & Company, to begin redefining growth for the fashion industry and developing a solution to the sector’s capital system. But the first change is a corporate refocus.

There’s a tendency among major companies, Lehmann said, to focus on improvements to supply chain efficiencies when they talk about progress, but that’s not what will take fashion into the future successfully.

“We need to do all that, we need to do it more. But if we don’t unlock how we reward companies that are truly sustainable and accelerate that, then we’re in trouble,” he said. It’s going to take outlining the key leverage points for making the sector more sustainable and it’s going to take collaboration with other industries.

“It’s not talking to anybody within this room (sorry), it’s not talking to my colleagues, it’s not talking to McKinsey, it’s talking to people from outside,” Lehmann said. “We can’t solve the problems with the thinking that created it, so we need to start talking to economists, different industries, and then try to come up with what are the key leverage points, what is it we need to focus on.”

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