Global Fashion Summit: How can we ensure that disruption does not derail sustainability efforts?

After two years of virtual events, this June around one thousand fashion professionals met in Copenhagen for the Global Fashion Summit. Over two days, major brands, independent designers NGOs, manufacturers and experts discussed the most pressing issues that the fashion industry faces. From well-know challenges such as decarbonization and circularity to less discussed issues such as living wages and the immense damage of exported textile waste to developing countries, the stage was the occasion for honest conversations and thought-provoking answers.

It was refreshing and needed. We do not have time to shield away from the real systemic issues, it is time to confront them all and build the post-pandemic future we all need. Though its easier said than done, given that the industry has worked on some of these challenges for decades with slow progress. Even more challenging within a context characterised by unprecedented uncertainty and volatility. Yet, we see positive signs: new braver policies, bold moves by some brands, innovative technological breakthrough and increasing consumer pressure whom despite lower purchase power demand brands to be more responsible.

This is the topic that we were asked to moderate at the Summit: Resilience and Disruption: Responding to Volatility.

The last three years have been exceptionally challenging for the fashion industry. A few facts immediately show the impact that COVID-19 had on the industry:

- The fashion industry posted a 20 percent decline in revenues in 2019–20.

- About seven percent of companies left the market entirely, either due to financial distress or because they were bought by rivals.

- The pandemic had a significant impact on global garment supply chains. Workers in manufacturing hubs were heavily impacted by ongoing Covid-19 outbreaks and associated shutdowns.

- While the hashtag #PayUp unlocked $22 billions of lost wages due to cancelled orders, million garment workers — the majority of whom are women, were laid off or fired, many without pay.

(Sources: The State of Fashion 2022 and re/make)

As if this was not enough, more recently we have seen harbours shutdown and congestion, container shortages, and capacity issues that have all contributed to delays in deliveries. Post-COVID-19, we see uneven recovery and demand spikes that make it harder for brands and manufacturers to plan. Finally, supply issues due to the slowed flow of raw materials from China and the unprecedented disruption due to the invasion of Ukraine are contributing to high volatility and shocks in the market.

"new braver policies, bold moves by some brands, innovative technological breakthrough and increasing consumer pressure whom despite lower purchase power demand brands to be more responsible."

Tough conditions, right?

As Solutionists we are never disheartened by challenging scenarios. So I asked the experienced speakers that I was honoured to join to provide insights on how to keep working towards a sustainable fashion industry:

While the industry gears up to better manage uncertainty and crises how can we ensure that disruption does not derail sustainability efforts? How do we maintain focus on our sustainability objectives and push for more ambitious ones?

Here, I summarise the key take aways and insights that came from the panel discussion as well as from inspiring follow-up conversations I had with other participants.

The whole system has been disrupted and shaken to the point of collapse. Sustainability can no longer be nice to have, but something that is necessary for the medium and long-term prosperity of the industry. Short-term opportunistic choices that were the norm in the past do not work anymore in a context where everyone along the value chain needs to trust its partners to be able to plan and invest to become more resilient and ready for future shocks.

Moreover, even if we take a wider risk assessment perspective, we see all the signs for sustainability to be front and centre in many areas:

New policies are written as we speak to reduce waste and make clothes last longer but also to ensure that brands become responsible for human rights due diligence.

Garment makers are fighting against unethical practices and are ready to sue brands that do not behave fairly. They are now taking the front stage and asking to be heard. While we need to do more work to have them sitting at the table and voice their concerns and needs, the summit had a good representation of manufacturers and other actors that work to improve working conditions along the value chain.

Consumers awareness of the unsustainability of the fashion industry is higher than ever, and while they are not ready to pay a premium price for sustainable fashion (especially in a moment where many struggle to make ends meet), they are prepared to give up on brands that produce with low social and environmental standards.

Companies are starting to embrace new business models and create more sustainable systems as they finally realise that these models represent an economic opportunity as much a sustainability imperative.

Circularity is a way to retain products and materials’ value over multiple cycles ensuring that businesses can maximise value creation while avoiding extracting more resources or polluting the environment. Circularity –when done at scale– can lead to savings while reducing raw materials volatility too. Investments around circularity are not new, but we certainly see incredible momentum to scale up breakthrough technologies that will enable garment-to-garment recycling at scale.

Again, this is combined with the likelihood of new legislation that will introduce EPR (Extended Producer Responsibility), a possible game changer in the way clothes are designed and made as producers would be given the financial and/or physical responsibility of their used products.

Brands have started working on traceability to mitigate risks for quite some time. But in the current volatile context, traceability becomes crucial in improving efficiency in stock management, avoiding overproduction and being able to support partners along the whole value chain in navigating uncertainty. Equally, traceability is key for businesses to address capital for medium to long term climate change mitigation and adaptation. Moreover, moving beyond Tier 1 and having full visibility is key for brands to Invest in targeted raw material resilience.

The role of alliances was the key theme of this year’s summit. Everyone I spoke with agrees that alliances are an imperative to be faster, more efficient, and effective in transforming the industry and making it more resilient to uncertainty and disruptions. The challenges are simply too big for one single player to address them alone.

Brands that share the same or part of the same value chain can use alliances to deploy concerted effort on the ground thus distributing the investment in sustainability, but also avoiding duplications and inefficiencies that hinder progress. But alliances are not only for brands. Alliances are essential for anyone along the value chain:

As we get into the second part of 2022, let’s focus on what sustainability can bring to the industry, let’s collaborate for a just recovery that sets the foundation for a new era where everyone can thrive.

Let’s use alliances for impact.