ESG Sustainability: What Does This Mean for the Fashion Industry?

Summary: The fashion players are facing growing demand to meet sustainability agenda. They realize that their growth and future are closely tied to their commitment to meeting these goals. Scaling up the communication of ESG solutions in a successful fashion trend will show the path for others to follow.  

In the past few years, garment production has more than doubled. Consumers buy 60% more clothes than they did previously, and, on average, garments are discarded after just seven or eight uses. Even as clothing usage has been decreasing, sales are rapidly growing along with the world GDP. This forms the crux of the environmental and social issues that plague the fashion industry today.

The problem is complex and its solution has seen proliferating in a multitude of organizations with varied agendas. It is one of the reasons that the brands find themselves too frigid to act. Where to start? And what is the way to go about ESG goals? This is the dilemma that brands have to confront and overcome.

Outlining the ESG goals for fashion

Let’s understand the outlines of ESG sustainability goals that the UNFCCC Fashion Industry Charter for Climate Action has set before the fashion industry with a timeline of 2030.

Environment: Reducing GHG emissions, controlling plastic usage, water, and air pollution, sustainable raw material sourcing, and usage

Social: Fair labor and wages, good working conditions, equity, and diversity in employment

Governance: Fair reporting of ESG sustainability goals and adherence to laws and regulations related to environment and social agenda

The goals underline the urgent need to change the consumption and production system radically in the fashion industry. The sustainable fashion industry has a critical role to play. The UN Alliance for Fashion perceives sustainability, not as a means to limit fashion, but rather as a trigger for bringing real creativity and passion into the industry that would take it toward healthy profitability.

Considering the enormity of the problem, there is a long way to go, but there are many actions that can be taken to make the planet a better place.

Incorporate sustainable practices core of company DNA

The demands of our times have resulted in the birth of new fashion brands having sustainability at the core of their evolution, like the Reformation of Maggie Marilyn. The adoption is a little slower for established brands that lack the agility to take up eco-friendly practices considering the scale at which they operate.

Yet the likes of Walmart, Levi Strauss, and Adidas have set scientific goals to achieve ESG targets. Big and small brands will have to relook at the systems, such as chemical usage and recycling without delay, and move toward making the production process more environmentally friendly.

Take supply chain partners in the loop

Another key solution to control unnecessary pollution increases would be a collaborative environment where brands and their supply chain can take qualitative actions that aim to learn and grow. The Zero Discharge of Hazardous Chemicals is one such initiative where brands and their supply chain have joined hands to implement a self-regulatory mechanism to phase out the use of hazardous chemicals, seek eco-friendly alternatives, and communicate the successes across the network.

Collaborate in the ecosystem for circularity

There are leaders in the fashion industry whose initiatives are path-breaking in their technology and impact. Big brands must collaborate with small ones for a wider spread of good practices across the ecosystem. For instance, Levis partnering with Usedem for upcycling denim stock or Santoni Material Experience Center collaborating with Remake Hub to make their yarn waste become home decor items go a long way in achieving the circularity that the fashion industry is aiming for.

Use technology to track ESG sustainability

The measurement and collection of data that enables tracking the progress of ESG actions become essential. It begins with the determination of targets and KPIs, baseline positions and facilitating data collection, reporting of progress, and then again deciding the further goals are all part of the purpose-built ECG sustainability solutions. As the societal urgency and financial materiality of these efforts gain importance, metrics to fix goalposts backed by data systems become critical. Digitalization is the surest way to introduce traceability and transparency in the entire network.

Communicate well to avoid the greenwashing trap

Traceability of actions emboldens fashion players to communicate their goals and achievements with confidence. In the age where social media works faster than any brand’s damage control machinery, verifiable data in the public domain can keep a brand’s reputation intact in face of wild allegations of greenwashing. It is always a good strategy to keep communication channels with consumers, investors, government, and other stakeholders well-oiled, open, and transparent.

The consumer environment is contradictory

 A  McKinsey survey points out that 67% of the respondents consider sustainability in their buying decision, but only a small percentage of consumers are willing to pay extra for sustainable products.

No time to wait and watch

While changing consumer behavior can be difficult, some fashion players have started taking steps toward a more sustainable environment. Others must realize they can no longer be watching for the show to unfold from the sidelines. With the deadline for ESG goals only seven years away, the fashion industry must know that there has never been a greater opportunity to drive both sustainability and profitability.

As a part of deleveraging their supply chain risks, mid and small-size companies can integrate with technology platforms such as Fashinza that provide stable design to shipment manufacturing solutions.

Connect with Fashinza for complete manufacturing solutions.

Key Takeaways

• ESG goals serve as a call to action for the fashion industry
• Extraordinary efforts and collaboration is required for the fashion industry to transform at speed and scale