New Report Shows COVID-19 Puts Sustainable Fashion At Crossroads

SAN FRANCISCO : Boston Consulting Group (BCG), the Sustainable Apparel Coalition (SAC) and technology company Higg Co today announced the launch of “Weaving a Better Future: Rebuilding a More Sustainable Fashion Industry After COVID-19,” a public report that highlights how sustainability in fashion is at risk in a post-crisis world and lays out a framework for a phased rebuilding that elevates the role of social and environmental commitments within forward-looking business resiliency strategies.

The report offers four actions that must be taken to avoid backsliding on progress and to actively prepare for a changing industry:

• Protect critical assets to survive the economic crisis: Fashion companies must safeguard workers, employees, capital, value chain partnerships, channels and the trust and support of their customers. This moment is an opportunity to remove unnecessary complexity and costs, in order to prepare for reinvestment.
• Solve immediate inventory challenges in partnership with suppliers: Leaders will recognize the importance of open dialogue and constructive partnership across the value chain in order to find shared solutions for protecting worker livelihood and sustaining trust. Cancellation of completed orders will be a measure of last resort, while cancellation without consultation or collaboration will be an unacceptable practice.
• Integrate sustainability throughout business recovery strategies: Sustainability will be an imperative for strong companies after the crisis. Leaders will make sustainability central to post-pandemic decision-making, while laggards will view sustainability as an effort to resume once convenient.
• Accelerate transparency while increasing sustainability ambitions: Companies must take advantage of digitalization, innovative business models and end-to-end solutions – with transparency playing a central role – in order to assess and demonstrate positive environmental and social impact to stakeholders.

“The pandemic has forced all of us to take a step back and reset our priorities. One key takeaway is that a new transparent model that showcases verified sustainable practices will have an edge over other traditional business models,” said Sanjeev Bahl, Founder and Chief Executive of Saitex, a leading sustainable denim manufacturer.

The 12-page report paints a bleak picture of what the fashion industry is facing in a post-crisis world, noting the unprecedented challenges that have arisen from the crisis, including that fashion and luxury together are the most negatively impacted of all consumer goods and services, after travel and tourism. From March to April, sales decreased by 60 to 70% in the worldwide fashion and luxury industry – with foot traffic in retail and recreation stores down by 44% in the U.S., 52% in Germany, 78% in India and 59% in Brazil.

“This is a moment of truth for fashion industry players,” said Javier Seara, BCG Managing Director and Partner and Global Leader, Fashion & Luxury Sector. “Companies will need to change and are already changing their businesses (every day) to adapt to the new reality.  Relentlessly incorporating sustainability practices into these changes will be the critical factor that separates winners from idlers.”

Further back in the global supply chain, a survey of over 500 manufacturing facilities across all main production regions conducted by the SAC and Higg Co in April, shows 86% of all facilities have been impacted by cancelled or suspended orders. As a direct consequence, 40% now struggle with paying employees, leading to layoffs and factory closures

However, it also takes a more optimistic stance on the possibilities that exist to integrate sustainability efforts into core business strategy as the industry rebuilds following the pandemic, suggesting that those who maintain commitments to supply chain partners, proactively keep an open dialogue and collaborate on solutions will benefit from deeper trust from consumers and value chain partners alike.

“Nine out of 10 Generation Z consumers believe companies have a responsibility to address environmental and social issues. By committing to sustainability, we can secure our long-term growth, stay relevant to our customers and establish market-leading differentiation against our competitors,” says Kate Heiny, Director Sustainability, Zalando SE.

The SAC, one of the largest multi-stakeholder industry efforts representing the apparel industry, encourages collaboration that drives social and environmental sustainability measurement and improvements in the apparel, footwear and textile industry.

“As we watch the apparel industry struggle due to COVID-19, the SAC’s vision of an industry that increases social justice, reduces environmental impact and has a positive impact on communities is more important now than ever,” said SAC Executive Director Amina Razvi. “This report outlines what’s at risk if sustainability is deprioritized and offers a positive outlook of what’s possible for companies that choose to fully integrate sustainability into their business operations moving forward.”

Higg Co is a technology company spun out of the SAC in 2019 that hosts sustainability measurement tools, allowing companies to integrate measurable data directly into their internal systems. This in turn better enables sustainability decisions throughout the enterprise and presents an even bigger opportunity to unify measurement across the industry.

“This global crisis throughout the fashion industry has demonstrated the critical need for supply chain data to enable decision making and avoid fallout later,” said Jason Kibbey, CEO of Higg Co. “Manufacturers who have invested in sustainable facilities and processes are looking for new models to benefit from those investments and new ways to engage with their customers and their upstream suppliers on sustainability.” Kibbey adds, “Fashion needs digitalization to accelerate sustainability and transparency, just as it has accelerated all other dimensions of business.”

Although the future remains unknown, “Weaving a Better Future” observes that retailers and brands that are integrating their sustainability efforts more deeply into the business and not retreating from them are poised to come out of the crisis in a position of strength. The post-COVID consumer will make purchases in part based on trust and purpose, and companies will be judged on how they acted during the crisis, as well as how they prioritize sustainability and transparency after the storm has passed.

“COVID is no excuse to back off from sustainability. Moreover, sustainability will be among key product priorities, together with quality and durability,” says Luis Cascuberta, Managing Director of Woman & Kids at Mango.

Razvi of the SAC adds, “This crisis is showing us that anything is possible when you have individuals, communities, businesses and governments working hand in hand to solve a global threat. While this may not be how we wanted to realize this, we now know that collective action on a global scale is possible. Climate change is the next great challenge we need to address together, and this pandemic is forcing us to acknowledge that economic, environmental and human health are all deeply interconnected, and meaningful solutions will only be possible if integration, collaboration and transparency are at the forefront of a new industry paradigm.”

The Sustainable Apparel Coalition (SAC) is an industry-wide group of more than 250 leading apparel, footwear and textile, brands, retailers, suppliers, service providers, trade associations, nonprofits, NGOs and academic institutions working to promote social justice throughout the global value chain and reduce the environmental impacts of products.

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Source: PR Newswire