Harvard Business Review: The Myth of Sustainable Fashion

All is not what is seems in the world of sustainable fashion. Photo / Getty Images

OPINION:

Few industries tout their sustainability credentials more forcefully than the fashion industry. Products ranging from swimsuits to wedding dresses are marketed as carbon positive, organic or vegan, while yoga mats crafted from mushrooms and sneakers from sugar cane dot retail shelves.

For many years, I was the chief operating officer of Timberland, a footwear and apparel brand that aspired to lead the industry toward a more sustainable future. The reasons for the industry's sustainability letdown are complicated. Pressure for unrelenting growth and consumer demand for cheap, fast fashion have been major contributors.

The fashion industry's boundaries spread globally, and its multitiered supply chain remains complex and opaque. Thanks to trade liberalization, globalization and enduring cost pressures, very few brands own the assets of their upstream factories, and most companies outsource final production.

Because it is hard to make a better performing or more efficient blouse or handbag, the industry pushes change to motivate consumption. Combine the imperative of growth with accelerating product drops, long lead times and global supply chains, and the result is inevitable overproduction. Notwithstanding improvements in technology and communications, predicting demand across tens of styles launched seasonally is much easier than doing the same for thousands of styles released monthly. Therefore, fashion inventories inevitably accumulate, and 40 per cent of fashion goods are sold at a markdown.

The speed of this hedonic treadmill continues to ramp up exponentially. Five years ago, McKinsey & Company reported that shorter production lead times enabled by technology and revised business systems allowed brands to "introduce new lines more frequently." This acceleration and proliferation of "newness" served as a constant draw to bring consumers back to sites and stores.

Increasing environmental damage has come at a time of heightened transparency and escalating ecological concerns. It's not as if "sustainability" isn't on the agenda for fashion companies. Statements from fast fashion brands such as Primark promise to "make more sustainable fashion affordable for all" and represent the shift in the zeitgeist. But several steps that companies are taking do no have their intended effect:

TRANSPARENCY

As a recent Business of Fashion report noted, "with no standardized language or regulated frameworks, deciphering what companies are actually doing is extremely challenging." Most corporate social responsibility reports do not accurately quantify a fashion brand's complete carbon emissions profile and remain unaudited by external parties.

RECYCLING

Recycling is an oversold solution. As a result of obstacles such as limits to recycling technology, less than 1 per cent of all clothing gets recycled into new garments. Worse yet, recycling does little to control environmental damage while exacerbating inequality; most donated items end up in landfills in developing countries.

Resale clothing retailers reject most of what is offered to them. Photo / Getty Images

BIO-BASED MATERIALS

Another response to address fashion's growing environmental footprint is the "next-generation materials industry." Innovators are now fermenting and growing bio-based substitutes for conventional livestock-derived materials (e.g., leather) and fossil fuel-based synthetics (e.g., polyester). Unfortunately, high initial costs, large requirements for capital, resistance to change and the lack of pricing for externalities plague innovations.

NEW BUSINESS MODELS

Two new business models tout their ability to dampen consumption of resources and extend product life cycles — but do they succeed?

RESALE

Sales at traditional thrift and donation stores remain more than two times the size of the nascent online resale industry. Online or in-store, resale retailers reject most goods that are offered to them for sale. This percentage will likely grow because of the low prices and poor quality of fast fashion.

RENTAL

Rent the Runway and other rental services actively promote the environmental benefits of their business model. However, according to Rent the Runway's website, rental reduces carbon dioxide only 3 per cent more than conventional new apparel buying. And while new business models attract capital, it is not yet clear whether they are viable businesses. Rent the Runway has burned through hundreds of millions of dollars in funding and remains unprofitable.

WHAT NEXT?

My projections forecast that the fashion industry will continue to grow over the next decade. The same trends that have powered its growth will more than overwhelm gains associated with bio-based materials and new business models. Here are some things we can do to work toward change:

RETIRE THE TERM 'SUSTAINABILITY'

Less unsustainable is not sustainable. The brand Patagonia no longer uses the term. At the same time, fashion companies should not be allowed to profess their commitment to sustainability while opposing regulatory proposals that deliver the same end. Nike, for example, a brand that has committed to science-based targets, gets a poor rating from ClimateVoice for lobbying against the Build Back Better legislation and its provisions to address climate change.

REDEFINE PROGRESS

A high gross domestic product should not be the overarching system goal; it is limited in many ways. For instance, it counts the number of cars an economy produces but not their emissions. The Organization for Economic Cooperation and Development is experimenting with a different marker focused on "well-being" that includes social, natural, economic and human capital. A new goal is needed to better show societal progress.

REWRITE THE RULES

Governments must price negative externalities. Carbon and water, for example, should be taxed to include social costs. This would discourage their use, lead to innovation and accelerate the adoption of renewable energy. At the same time, governments should adopt extended producer-responsibility legislation requiring manufacturers to pay upfront for disposal costs.

After a quarter-century of experimentation with the voluntary, market-based approach to fashion sustainability, it is time to shift. Asking consumers to match their intention with action and purchase sustainable, more expensive fashion is not working. Fashion is known for reflecting and leading culture. The industry now has a historic opportunity to demonstrate that creativity and respect for boundaries can lead to authentic sustainability.

- Harvard Business Review.
- Kenneth Pucker is a senior lecturer at the Fletcher School.