Environmental threats, new issues in the fashion industry agenda

Concerns about climate change have become a hot topic today. Popularity to this topic has become a top priority for the annual World Economic Forum discussion in Davos.

Environmental issues are often the key to today's most pressing geopolitical and financial issues discussed by politicians and business people. This year, environmental issues have quietly been on the agenda, and many fashion people have joined the hot topic.

On Wednesday, at a luxury luncheon at the Swiss ski resort, executives from companies such as ASOS and H&M Group formally joined the Global Fashion Agenda, a sustainability advocacy organization that publishes annual priorities for executives of global apparel brands. List of matters. This year, for the first time, the organization has made addressing climate change a top priority, as well as improving supply chain traceability, improving the working environment, and corporate use of water, energy and chemicals.

Although the environmental impact of the fashion industry is difficult to quantify due to the complexity and opacity of the global supply chain, a report released last year by environmental sustainability consultancy Quantis estimated that global greenhouse gas emissions from the apparel and footwear industries accounted for 8% of the world is almost equivalent to the overall climate impact of the EU.

“This is a pretty amazing number,” said Eva Kruse, CEO of Global Fashion Agenda. “The number itself requires action across the industry to change.” Kruse is primarily responsible for providing guidance to senior management in the most important areas. Guidelines to improve the industry's strategy for sustainable development.

As people become more aware of the negative impact of fashion on the environment, companies are facing increasing pressure from consumers, investors and regulators to demand a more sustainable business model. According to this year's Global Fashion Industry Report, 90% of Generation Z consumers believe that companies have a responsibility to address environmental and social issues.

Big brands like Patagonia and Stella McCartney have proven over the years that a strong focus on sustainability can be a compelling business case. But more and more companies are strengthening their activities in this area, emphasizing their ethical qualifications on their websites and signing international initiatives to reduce the environmental impact of the industry.

This is partly because climate change has brought very real business risks to the industry. According to the annual global risk report released last week by the World Economic Forum, the disruption of production and delivery of goods and services due to environmental disasters has increased by 29% since 2012.

According to the report, “In all risks, the risks associated with the environment are most evident in the fact that the world is drifting into disaster.”

Climate change has had a negative impact on key raw materials such as cotton and wool, causing fluctuations in quality and prices. The luxury goods industry relies on the supply of high-end materials—which are often produced in limited locations and quantities—and are particularly vulnerable to climate change, which can damage major producing areas.

A report released in 2015 by Keing and the non-profit consultancy Business for Social Responsibility found that climate change has reduced the yield and quality of cotton crops and led to high quality cashmere production in Mongolia. decline.

Marie-Claire Daveu, chief sustainability officer of Kaiyun Group, said in an interview: “Cotton and cashmere are of course directly affected by climate change. Dealing with this issue is not only a moral obligation but also a good business. awareness."

Extreme weather events also affect the profitability of companies. According to Florence Allday, an analyst at Euromonitor International, last year, retailers across Western Europe were busy managing seasonal stocks, after a winter blizzard known as the Beast from the East. Extreme weather that occurs.

“This unpredictability is a nightmare for fashion retailers, especially those fast-moving brands that collectively produce cheap goods,” Allday said.

Growing awareness and increasing external and internal pressures are driving the industry to take action.

At the end of last year, a group of 43 brands, retailers, suppliers and others collaborated with the United Nations to launch an intra-industry climate action charter. Those contracted companies, including luxury groups such as Kaiyun, and fast fashion companies like H&M and Zara parent company Inditex, agreed to reduce greenhouse gas emissions by 30% by 2030.

In other respects, companies are taking individual measures to improve their environmental impact, and some of them are becoming global leaders. On Tuesday, Toronto-based media company Corporate Knights ranked Kaiyun as the second-largest sustainable company in the world in its annual corporate sustainability rankings. Other fashion companies, including Adidas and Inditex, have made progress in key performance indicators such as resource management, employee management, financial management and supplier performance.

Despite this, progress across the industry is still slow. In many companies, sustainability is still an afterthought, and the Global Fashion Agenda estimates that about half of the industry's companies have yet to take action on this issue.

The question now is whether a higher level of understanding will translate into greater action.

“Everyone is paying attention to this industry,” Kruse said. “We’re making a voice today to help the rest of the company, not knowing how to start.”