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McKinsey: Why the Apparel Industry Needs to Invest in More Sustainable Practices Now

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Modern society has become increasingly desensitized to disaster, meaning most consumers still turn a blind eye to the high cost that comes with cheap clothes, even after 2013’s Rana Plaza factory collapse in Bangladesh. Despite the best efforts of human rights organizations and environmental groups to change the status quo, new research by McKinsey & Co. suggests the worst is yet to come.

The report found that while apparel has seen strong sales growth around the world, a burgeoning middle class in emerging markets has led to a spike in those countries. In fact, apparel sales in Brazil, China, India, Mexico and Russia are growing eight times faster than in Canada, Germany, the United Kingdom and the United States.

So if consumer spending increases—particularly in developing countries—and apparel manufacturers churn out cheaper, faster fashion without adopting a more ecologically-sound production process, McKinsey foresees the garment industry’s environmental footprint growing bigger than ever.

Try these stats on for size: at the rate things are going, if 80 percent of the population of emerging economies were to achieve the same clothing-consumption levels as the Western world by 2025, carbon dioxide emissions would surge 77 percent and water consumption would increase by 20 percent. And that’s before consumers’ post-purchase choices (read: washing and drying garments, end-of-life disposal) ever come into play.

McKinsey

Photo: Courtesy of McKinsey

Issues such as forced and child labor, low wages and health and safety hazards would likely continue, too.

“Rooting out these problems will require businesses to measure sustainability performance across the entire supply chain, set goals for improvements, help suppliers to reduce their impact and hold suppliers accountable if they don’t,” McKinsey said.

It’s not for lack of trying. As the report pointed out, 22 apparel brands have signed on to the Zero Discharge of Hazardous Chemicals (ZDHC), while more than 50 retailers and nearly 700 suppliers are involved in the Better Cotton Initiative (BCI). On the end-of-life side of things, H&M and Levi’s collect unwanted garments in their stores with the help of I:CO. Patagonia does something similar and offers repair services, too.

But more remains to be done. McKinsey’s suggestions include:
• Developing standards and practices for designing garments that can be easily reused or recycled
• Investing in the development of new environmentally-friendly fibers and recycling technologies
• Encouraging consumers to care for their clothes in low-impact ways
• Developing higher labor and environmental standards for suppliers and providing them with guidance and resources for meeting them
• Holding suppliers accountable for performance shortfalls

As McKinsey concluded, “Production methods that are more sustainable may cost slightly more, but they can also spur innovation and protect businesses from supply-chain shocks and reputation risks, resulting in greater resilience and profitability.”

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