Sustainability is rising up the agenda for consumers and there are growing risks for those who fail to act
The fashion industry’s environmental impact is coming under increasingly intense scrutiny as consumers and the government fix their attention on the issue.
The Environmental Audit Committee is conducting an inquiry into sustainability in fashion, while last month’s BBC3 documentary Fashion’s Dirty Secrets exposed the industry’s failings to the public.
Many retailers are starting to implement sustainability policies but when push comes to shove most business leaders still prioritise profits over responsible retailing. This is not helped by the fact that many shoppers are not willing to put their money where their mouth is and often choose a cheaper option over a more sustainable one.
The business case for sustainability is a long-term one. But there are growing financial risks attached to not acting: PR disasters such as the collapse of the Rana Plaza factory in Bangladesh in 2013, or government intervention, for instance, could suddenly ramp up costs or impact sales. Furthermore, there is the risk of being overtaken by competitors who have adopted sustainable principles, as consumers who are increasingly well informed and demanding choose more responsible brands.
“Most of the research that has been done suggests that consumers by and large say they care [about sustainability] and are willing to pay more, but we are not necessarily seeing that reflected in sales,” says Sarah Ditty, policy director at campaign group Fashion Revolution.
When Marks & Spencer carried out consumer research a decade ago ahead of the launch of its Plan A sustainability programme, it found only 10% of consumers would pay more for environmentally friendly products. A further 70% of respondents cared about sustainability in some form, but expected industry to absorb the cost.
With increasing consumer demand, sustainability can also be a USP
Andy Long, Pentland Brands
“M&S is a mass market retailer and you can’t go for 10% of the consumers,” says Mike Barry, director of Plan A and sustainable business at M&S. “From that research we had an ambition that we would invest in our business to make it more sustainable but lower the cost to the consumer.
“We found it was a positive business case because you reap more than that in return from less waste, water, energy and fuel, and we have been able to invest that in new Plan A initiatives.”
Plan A initiatives include sourcing all cotton from sustainable sources by April 2019, its Shwopping recycling partnership with Oxfam, and a focus on sustainable design as part of its Plan A 2025 commitments.
Barry believes M&S placing trust at the heart of its business has helped it avoid the scandals of the last decade. The retailer publishes a growing amount of information on its website to underpin this trust, including the location of its factories for food and clothing, details on its second- and third-tier suppliers across the supply chain, the location of its dye houses and the raw materials used.
“We’ve had the horse meat scandal in the world of food, which was nothing to do with M&S, and we’ve sadly had the Rana Plaza collapse that killed 1,100 women for the sake of cheap T-shirts, which was nothing to do with M&S,” says Barry. “Transparency will only grow more important and I think we are well positioned to anticipate the shift of what is happening out there.”
Pentland Brands is another fashion business working to become more sustainable.
“We’ve always had the belief that ‘good business is good for business’ and what we do and the way we work reflects this,” says chief executive Andy Long. “One of our four values is ‘In good conscience’.
“Sustainability is a journey, and needs to be commercially viable, but it doesn’t always have to be at the expense of commerciality – with increasing consumer demand, sustainability can also be a USP.”
Long believes retailers need to look beyond short-term margins: “[Sustainability] can impact on margin, but it may also offer an opportunity in terms of raising brand profile and increasing sales volumes.” He adds that last year, for example, Speedo launched its new H2O Active range, which uses Econyl – a fabric made from recycling fishing nets and plastics into first-grade nylon. “This was an increase in cost but a business decision based on it being the right thing and knowing it was something their consumers cared about.”
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Consumers may not be choosing sustainability when forced to choose between a more expensive ethical option and its cheaper, non-ethical counterpart, but Long says the trend is impacting their behaviour in different ways. Growing numbers putting more effort into researching products, then buying the most sustainable option for their budget.
“Consumers are more knowledgeable about how and where their products are made and, in some cases, will make purchasing decisions based on this. That’s why our teams now include sustainability as part of the product development process.”
One crucial piece of advice for retailers is to join the discussion and start being more open about sustainability. The BBC documentary made a point of how difficult it was to get retailers to speak about the topic: by staying silent, brands risk looking as though they do not care.
Burberry bore the brunt of a backlash when it was discovered that it was incinerating unsold clothing and accessories to protect the brand and prevent them from being sold cheaply. It went on to announce it would stop the practice.
Barry says M&S is attempting to embrace this spirit of openness: “We are not perfect but addressing a lot of the issues, we are very happy to be transparent about what we do. Transparency will only grow more important – in terms of questions from parliament, from journalists, NGOs, our customers.”
Beyond the Modern Slavery Act, there is currently no sustainability legislation in fashion, although Barry predicts that if the industry fails to act voluntarily, regulation should be expected.
Ditty adds the government’s options for regulation include a French-style “duty of vigilance” law, a ban on the incineration of textiles, higher taxes for the use of virgin materials, and levies based on the amount of waste produced by businesses.
The British Retail Consortium (BRC) is also concerned about lack of enforcement. It believes the practice of unscrupulous suppliers paying textile workers in the UK below minimum wage is going unchecked, and is lobbying for action.
“As an industry we are very keen to talk to government about policy and how it can be improved to encourage responsible business practices,” says BRC head of sustainability Peter Andrews.
“Where we do have concerns is where there are knee-jerk reactions to certain issues and regulation may be brought in that has unintended consequences.”
Ditty believes many companies will not act until the government compels them to do so. But those who do nothing face growing risks. Whether these are related to PR, consumers or regulation, the time to act is now.