Fashion businesses are used to facing the pressure of fast-changing consumer demand for their products. But increasingly, with unprecedented access to information about brands’ operations and media coverage of events such as those in Bangladesh – the Dhaka factory fire of 2012 and Rana Plaza factory collapse in 2013 – consumers also are scrutinizing the fashion supply chain.
“Growing consumer demand for higher social and environmental standards across the board has increased the need for supply chain transparency in the United States and in Europe, affecting the textile and garment industry in the process,” said Maximilian Martin, founder of Impact Economy, a Switzerland- based impact investing and strategy firm with operations in North and South America. “Trends such as the rise of Asia (as a manufacturing hub for fashion), fast fashion and increased transparency of supply chains are raising the bar for better social and environmental performance.”
COMPLEX CHALLENGE
Ensuring sustainability is a multifaceted challenge for apparel brands. They need to know how every stage of the supply chain might impact individuals, communities and the environment so they can avoid negative consumer backlash against their products.
“Global supply chains are highly challenging for companies committed to trading ethically,” said Esme Gibbins, head of media and communications at the Ethical Trading Initiative (ETI), a global alliance of companies, trade unions and non-governmental organizations that promotes respect for workers’ rights. “For example, the labor rights issues that exist in many supply chains are often deep-rooted, widespread and incredibly complex for any apparel brand or retailer to tackle on its own.”
VISIBLE COMMITMENTS
Leading brands are working toward sustainability with help from the tools and voluntary codes of conduct provided by organizations like the ETI, Sustainable Apparel Coalition and Solidaridad. “Ethical trade is about working with other companies and stakeholders to help drive long-lasting improvements, and sharing your progress,” Gibbins said.
For example, with the launch of its Plan A 2020, UK-based fashion retailer Marks & Spencer has extended its sustainable business plan across its operations worldwide. In addition to their individual sustainability commitments, Swedish fashion retailer H&M and Inditex, the Spanish fashion group behind Zara, have jointly committed to improve factory safety conditions and to eliminate endangered-forest fibers from their rayon and viscose clothing.
Sustainability reports also are becoming more common in the fashion industry as brands measure themselves against their objectives and codes of conduct – and sophisticated IT systems are giving them the visibility they need
to monitor progress.
"WE NEED TO START TREATING SUSTAINABILITY AS A KEY DRIVER THAT CAN HELP ACHIEVE BOTH BUSINESS SUCCESS AND LONG-TERM VALUE FOR SOCIETY."
MAXIMILIAN MARTIN
FOUNDER, IMPACT ECONOMY
“Driving sustainable fashion business requires a conscious effort to define objectives and then consistent measurement against those goals,” said Leslie Hand, research director at global consulting firm IDC Retail Insights. “Supply chain IT supports this work by enabling visibility into factory audits before orders are placed; to sources of supply for materials; to the goods in motion; and to all the inputs to the carbon footprint of goods, so that this can be calculated. It also enables efficient and smart selection and utilization of materials.”
Many advances are being made in ensuring sustainability throughout the supply chain, Hand said. “For example, from a design perspective, being sustainable requires the design of clothes with the preservation of nature in mind, leveraging recycled or natural fibers, minimizing waste and reducing the use of water and energy. 3D design and visualization and other carbon-tracing tools can help with this. Product Lifecycle Management (PLM) enables efficient design, minimizing waste and reducing sampling. And analytics solutions are helping organizations to plan for the effective design of products that will sell through, thus reducing landfill.”
Measuring impacts across the lifecycle of apparel or footwear – such as material, production, packaging, use and end of life – requires collaborative efforts to aggregate data across the value chain. In addition to improving design and production, PLM allows suppliers, brands and retailers to partner on a common platform toward a more sustainable, circular economy.
CLEAN AND LEAN
The systems that support sustainability can deliver significant business benefits too. In its report “Supply Chain Top 25 for 2014,” global consulting firm Gartner recognized the sophisticated technologies that support H&M’s aggressive growth path, as well as Inditex’s rapid prototyping and time to market, while acknowledging the firms’ sustainability commitments. Inditex/Zara’s “highly integrated supply chain also leverages social networks and product scarcity to sense and shape demand,” the report said; it also identified H&M’s supply chain as a “key enabler” of the retailer’s growth.
“There is an enormous hidden value- creation opportunity in sustainability,” Impact Economy’s Martin said. “In many cases, water consumption in global apparel production could be lowered by as much as 50%, energy by one third and the use of chemicals by up to one fifth. These changes could unlock massive value and, accompanied by modern management techniques that engage with workers, provide the economic basis for improving working conditions and environmental footprints. To seize this potential and take manufacturing to the next level, we need to start treating sustainability as a key driver that can help achieve both business success and long-term value for society.”
