Change through collaboration
Collaboration is key to building a greener and more prosperous future writes Joyce Tsoi, director of collective action at the Sustainable Apparel Coalition (SAC).
The World Economic Forum estimates that fashion accounts for 10% of all humanity’s carbon emissions and is the second-largest consumer of the world’s water supply. According to recent research carried out by World Resources Institute and Apparel Impact Institute, the apparel sector’s carbon emissions is projected to hit 1.2 Gigatonnes carbon dioxide equivalent.
Brands, their manufacturers, and raw materials suppliers are aware of these trends. However, the impact of Covid and supply chain disruption over the past few years has meant that prioritising workers’ health and safety at factory premises and ensuring the business continuity has now taken precedence. We must address the impact of the fashion industry and drive forward with change to protect the ecosystem and preserve natural resources for future generations.
Supply chain management has become an ever-changing beast with planning, decision making, inventory control, marketing, and discounting often coming down to frantic, immediate decision-making, but both brands and manufacturers have learned to adapt. Macy’s, for example, has started practising ‘dynamic pricing’, planning promotions and discounting around its supply chain and available inventory. Brands and retailers have tried to navigate these crises by changing their sourcing strategy, diversifying their supplier base, to plan and produce nearer to the sales market to meet the consumers’ demands.
Meanwhile, the sustainability agenda has grown considerably, as both consumer and regulatory demand has meant that working in silos is no longer an option for brands and manufacturers who need to make fast progress on environmental standards.
But the turmoil in the industry has a silver lining: brands and retailers now understand they must be able to rely on their suppliers, the pool of which has decreased. These shifts have gone some way to levelling the playing field and power balance in the industry.
Our work shows us two types of suppliers have emerged: the cause-conscious that have small budgets for sustainability activities due to Covid, and the proactive, using their time during production slow-downs to capture opportunities and identify areas for growth.
With more than 70% of fashion’s carbon emissions coming from upstream operations, brands must act now on these trends, working with both types of suppliers to help them reduce their environmental footprint. No longer does a typical transactional supplier type of relationship go far enough. Brands must prepare to take their suppliers on their sustainability journeys with them.
At the Sustainable Apparel Coalition, Collective Action is one of four pillars of our strategic plan. Our joint approach of working allows us to see suppliers and manufacturers prioritising and reducing their environmental impact and viewing sustainability as an imperative, now more than ever. Our collective strategy and equal partnership principle allows brands and suppliers to occupy a non-competitive safe space and share best practice to form strong relationships.
We know that many suppliers and manufacturers are proactive in terms of sustainability action – it’s about bringing the rest of the industry into the room. Companies may not be far ahead in their journey, but if they can see peers showing them the value of it and demonstrating the positive impact, a change is more likely.
Brands and retailers need to invest in capacity building and investments in the changes needed in order to deliver on sustainability performance. They must work with manufacturers and suppliers to incentivise change while at the same time invest in the changes needed to support factories in their efforts to operate with less environmental impact. They also need to communicate their medium to long-term goals clearly and transparently and work in partnership with shared aims and approaches. Equally, suppliers need to better understand their clients and their long-term sustainability strategies and goals if they are to meet them.
We recommend initiating this work at the start of the planning process so that both sides can then work to develop their own strategies and roadmaps, recruiting staff with the expertise needed and avoiding duplication. This is likely to have a positive impact on resource use as well – one more step towards a better environment.
It’s also well known that suppliers sell their products to multiple brands, making this work the perfect example of a positive domino effect. If one brand collaborates with one supplier, and that supplier influences a new client relationship, industry best practice and standards will improve, bringing wider benefits for all.
A bold move
Return fees will decrease the appeal and convenience of purchasing online, so Zara is bold to be the first major fashion player to make this change. The retailer will likely experience higher footfall in-store from shoppers wishing to return items for free, which it will have to carefully manage to minimise the potential of large returns queues, which can already be quite long. It also needs to ensure the experience is conducive to those returning items making additional impulse purchases while in-store. Zara stores are also not very accessible for many shoppers, as its locations are concentrated in cities. Accessibility would be less of a problem for retailers with more stores in a wider variety of locations, such as H&M and New Look, however, these players are still reducing their physical presence, so are becoming less accessible.
Main image credit: bestravelvideo / Shutterstock.com
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