Ethical and sustainable fashion is not new but the desire for sustainability has inundated the press over the passing months, more so than ever before. The fashion industry is responsible for a devastating environmental impact. Evidence shows the industry actively contributes to the toxicity of our water systems, uses 1.5 trillion litres of water every year and releases nearly half a million tonnes of harmful microplastics into the ocean during the laundry process.
The Director of Sustainable Investment at Gresham House, Rebecca Craddock-Taylor aptly puts this into perspective:
"just one T-Shirt requires the same amount of water that one person drinks in nearly three years – fast fashion is a resource intensive, wasteful industry"
Although it may appear some fashion companies are prioritising sustainability, there are questions around whether the majority are merely using their 'green' ethos as a marketing strategy. The social and environmental impact of consumers' buying choices is not always clear. Consumers are beginning to demand more transparency from brands. The power and transparency of Blockchain as a decentralized distributed ledger can be used to track the sustainability of supply chains, the welfare of factory workers, the manufacturing process and countless other areas. There is hope this Blockchain derived data can be used as evidence alongside a company's ESG claims and ensure credibility for consumers.
We noticed a marked change this year with several brands taking a stand on Black Friday by refusing to offer sale discounts. Instead, they called for shoppers to break this tradition and consider the planet. Sustainable footwear brand, Allbirds, increased their prices by £1 and donated the proceeds to Greta Thunberg's climate movement, Fridays for Future. Cinta, an independent British brand promised to donate £10 with every order over Black Friday to No More Plastic in a push to increases public awareness on plastic pollution. There was also some well publicised criticism of eye catching price reductions in the fast fashion space.
The fashion revolution is coming fast, even if loss of business opportunities is what pushes brands over the line. For example, non-profit CDP estimates brands that refuse to consider water pollution miss out on $180million worth of business potential. Brands like Burberry, Gap, H&M and Inditex already showcase their awareness for water pollution across their value chain and attract an improved brand image on top of the benefits to the planet.
Technology is creating exciting sustainable options for brands – for example the use of alternative (lower impact) materials and dying processes and digital printing to reduce waste on pattern cutting. Some brands are looking how they maximise the renewed consumer interest in vintage, second hand and recycled/ repurposed clothing, others offer free repair services whist some are trialling higher end sales models which are based on a bespoke or advance order services to try and reduce over supply or use local (higher cost) manufacturing as a point of difference.
What is clear is that even for brands where sustainability is not (yet) part of their brand ID or marketing strategy, poor supply chain management/ awareness can have significant reputational issues.
We do not see sustainable and ethical fashion as a marketing box to tick but instead a real opportunity for M&A activity, brands, innovators and investors alike.