The Fashion Industry Is Gearing Up for a System-Wide Shift

Fashion is one of the world's most important industries. It is worth around $1.5 trillion a year, employs more than 25 million people, and fashion-conscious or not, we all wear its products. Yet most of us know very little about where our clothes come from or how they are put together.
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Almost a year on from the tragic collapse of Rana Plaza, Heather Connon asks what's changed in the world of fashion - and what's to come.

Fashion is one of the world's most important industries. It is worth around $1.5 trillion a year, employs more than 25 million people, and fashion-conscious or not, we all wear its products. Yet most of us know very little about where our clothes come from or how they are put together. Even those who assiduously read the labels will glean only limited information: if a country of origin is shown, this could be where the garment was designed or assembled - but the source of the raw material and the conditions under which it was converted to fabric and then pieced together remains pretty much invisible.

This ignorance was brutally exposed by the disaster in Bangladesh last year, where more than 1,100 workers lost their lives when the Rana Plaza factory collapsed. Even the executives of the companies which sourced their materials from the site were not fully aware of the appalling working conditions and abysmal safety standards which operate across far too much of the industry. There are also significant environmental issues, from the pesticides and water used in cotton production to the chemicals used in the laundry of the products; and from the culture of consumerism, which is encouraging us all to buy far more than we actually need, to the problems of disposing of discarded garments.

Yet fashion company reports are full of commitments to sustainable sourcing policies and ethical production - claims which can sound hollow when Rana Plaza and other scandals expose the industry's failure to live up to these standards. Dilys Williams, Director of the Centre for Sustainable Fashion, points out that it is more than a quarter of a century since the media first exposed labour issues at Gap and Nike. Since then, some important policies and frameworks have come into place to support brands to take action, such as the UN Guiding Principles on Business and Human Rights (2011), the California Transparency in Supply Chains Act (2010) and the Alliance for Bangladesh Worker Safety (2013).

Brands are also signing up to cross-industry collaborations; for instance, H&M, Adidas and Levi Strauss are all members of the Better Cotton Initiative, which aims to mainstream sustainable production of the fibre [see the Green Futures Special Edition 'Cotton Conundrum'], and Greenpeace's Detox Fashion campaign is working with Adidas, Nike and Puma to reduce the use of toxics in their supply chain.

Williams has been working with the Fashion Revolution, a cross-industry campaign established in the wake of Rana Plaza to act as a catalyst for change, prompting consumers across the world to tweet at the brand whose clothes they are wearing, and ask who made it. As Williams observes, just as the severe weather events make us look at the influence of the global climate on the weather, so issues like Rana Plaza should make us all look at the kinds of system in which we play a part.

"If you look at it on a systemic level, we have not stepped forward an inch", she asserts, calling for "a consensus that the system must be addressed". This, Williams explains, means looking beyond the mere choice and source of materials - whether it's organic cotton or conventional, recycled or recyclable - to the foundations of fast fashion, asking how over-consumption relates to the exploitative production of cheap goods, and seeking alternative ways to address our appetite for style. "Fashion is about creating an identity, something which you can be proud of", she says. "It is not simply a matter of having more legislation on labelling, or concerning the use of chemicals."

A key question is why there has not been more progress. Four years ago, Forum for the Future published a report outlining the issues facing the industry and four potential scenarios for development - some of which are starting to unfold. Couture to 'upcycle' used fabrics is gaining ground in hip cafes and on catwalks; Marks & Spencer's 'shwopping' campaign encourages donations to Oxfam; and the UK House of Lords recently held a 'swishing' event with the sustainable communications agency Futerra, encouraging consumers to swap clothes rather than bin them and buy more. Alternative materials are also nudging their way into the mainstream: last year, Levi's launched a pair of jeans made using plastic from recycled bottles [see A recycled bottle blend for jeans].

But reuse, recycling and upcycling only go so far, says Nick Ryan, Director of the closed-loop textiles organisation Worn Again. "If we want to eradicate waste, we need to work with major industry", he says, stressing the complexity of the supply chain. A typical pair of jeans, he points out, might say 'Made in Egypt' on the label, but also includes chemical dyes produced in Brazil, copper rivets sourced in China, and buttons made in India from zinc sourced in China, Peru or Australia.

Louise Armstrong, a Senior Advisor who works in the system innovation lab at Forum for the Future, says companies are realising that they cannot conduct best practice in a bubble. "They are experiencing pressure in their supply chains, and looking for ways to create resilience."

Some system-wide initiatives are beginning to emerge, bringing together both sustainable production and training to promote long-term thinking in managerial decisions. Impactt, an ethical trade consultancy, has just embarked on its second Benefits for Business and Workers (BBW) programme, which will scale up its initial work with 93 factories in India and Bangladesh to develop cost-effective and replicable systems for more sustainable production. Funded by the UK Department for International Development through its RAGS (Responsible and Accountable Garments Sector) Challenge Fund, the initial programme included the Arcadia Group, Marks & Spencer and Ralph Lauren, and it involved six months of training for managers - with impressive results. In those factories engaged, efficiency improved by an average of 18%, absenteeism by more than a third and worker turnover fell by more than 50% while take-home pay rose by an average of 7.6%. Now the programme is being extended to 100 factories with seven companies participating, including Tesco from the UK and the US giant Wal-Mart.

Tony Henshaw, Chief Sustainability Officer of Aditya Birla - an Indian conglomerate whose businesses range from plantations to production of pulps and fibres through to retail brands - believes that the Sustainable Apparel Coalition (SAC), a trade organisation which represents more than a third of the market, has a viable blueprint to reduce the environmental and social impacts of apparel. In December 2013, it launched the Higgs Index 2.0, which poses a series of questions within a webbased wiki on areas like human rights, raw material sustainability, energy efficiency and corruption. This tool allows companies to evaluate the impact of their business and supply chain, and quickly assess how to make improvements.

Aditya Birla has made a public commitment to become the leader in India for sustainable business practices by 2017. When we spoke, Henshaw was engaged in a series of visits to group companies, helping them use a Higgs-based sustainability roadmap. He is convinced that this is essential business sense. He believes that large companies will increasingly move towards choosing suppliers with high Higgs scores. "If you are good enough to be in a global supply chain you will do well, but if you are not, you could find it difficult", he warns. "Over time, people will start to align around the index and its requirements."

This isn't just a trend, he says: it's a fundamental shift in the commodities market.

"In my opinion, commodities as we know them today will not exist in the future, because sustainability issues will translate into product attributes. We will move from commodities priced according to the cost of production to a valueadded system. There could be a shake-out period for companies that score poorly."

An enticing prospect for early adopters of best practice in the industry. The rest may find next season is their last.

Heather Connon is a freelance journalist specialising in finance and investment