Apparel & Textile Industry shows slow down on Sustainability Efforts

bsamply sustainability pulse report

Sustainability is the focus

In 2017 a huge turn was made towards sustainability and the Pulse performance score, powered by Higg Index, in collaboration with Boston Consulting Group, has been presented again giving great insights. The Pulse of the fashion industry for those who don’t know, measures, and tracks the sustainability of the global fashion industry on important environmental and social impact areas.

Since last year the pulse was raised by six points. This is impressive and encouraging but not enough. The fashion industry, especially for its size, is obligated to continue improving its environmental and social performance. Especially since environmental and social stress are tremendous, and they are endlessly growing, along with customer demand. The change doesn’t go far or fast enough. The fashion industry needs to get in the path to a  long-term well-fare financially, socially and environmentally active collaboration. In order for that to happen, the industry leaders should show a clear commitment. They have to prioritize a responsible strategy, find innovative solutions and explore different business models.

The Pulse report’s goal is to offer guidance to companies wanting to start or find further improvements toward more responsible ways of doing business. It shares proven best practices and defining bigger and bolder steps the industry must take.

The Pulse Score, BCG, and GFA worked with prime fashion players to develop two important substructures offering guidance and inspiration.

First: The Pulse Curve

That allows companies to compare their actions and performance against other industry players and evaluate their progress over time.

Second: The Roadmap to Scale

Is an inspiring guide that offers concrete actions, companies can take to prioritize and plan sustainability efforts.

The Pulse of the Industry is still low

In the past year, the Pulse Score of the fashion industry improved from 32 to 38 (out of 100). The Pulse Survey, representing all industry segments, confirms that the issue is gaining ground on the industry’s priorities. According to the report, 52% (18% more than 2017) of the fashion executives reported that sustainability acted as the main guideline for nearly every strategist decision they made.

While nearly all of this year’s progress came from companies in the midprice segment, small and mid-sized enterprises are likely unsure about where to start with these complicated issues. This is resulting in nor perform well in the entry-price segment. It seems like the industry as a whole must develop partnerships and ecosystems that can commercialize and scale the most promising innovations on the horizon. This type of collaboration is what is missing in order to boost the fashion industry’s environmental and social performance – and profitability – in the long run.

The industry needs to increase the Pulse Score beyond small improvements to result in troublesome change much faster. The overall Pulse Score gap from 38 to 100 shows how many opportunities exist for creating new value for society and individual businesses.  

Useful tools by Pulse

The  Curve charts the trajectory from a company’s first steps toward improved performance through to implementing the most advanced practices. It is a useful tool for smaller players to accelerate their own journeys, deploying the frontrunners’ learnings. The curve rises along with increasing Pulse Scores as companies set strategies and targets. They reach the next level as they implement collaborative initiatives and improvement measures in their value chains. As they work with partners along the supply chain to introduce efficient production techniques, improve working conditions, and adjust their sustainable materials mix, brands and retailers continue to progress along the curve.

The roadmap is the first attempt by the industry to present a potential path for fashion brands and retailers, regardless of size, price positioning, or geography to raise environmental and social performance. Whatever their starting point, companies that use and adapt these best practices will improve their performances, and raise their profitability. Successful implementation of the roadmap will leave fashion companies with a well-grounded foundation, including an ambitious strategy and dedicated team. Having, of course, embed sustainability deep within the core of the business.

 


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The Roadmap to Scale is divided into three phases:

Phase one “Building the foundation”

Is the first step after a company has decided to make a commitment to sustainability. In this phase, a company is setting strategies with short-term and long-term targets, including reducing environmental and social footprint. As we can see from the Pulse report, companies need to share their top management’s commitment, explain their strategy and targets, and set transparent expectations for the supply chain. Otherwise, sustainability is going to fail. Traceability in the supply chain helps companies to understand the social as well as the environmental impact of business practices and products. It enables brands to identify risks and challenges, as well as opportunities to increase operational efficiency. And all these while building strong and trusting relationships with suppliers.

Phase two “Implementing the core” 

Is where companies begin to see actual returns on investment in their commitment to both environmental and social progress. Visibility into their supply chain can help organizations to see where they can take specific actions to improve their environmental and social performance and raise efficiency. Also, it allows companies to help cultivate more respectful and secure working conditions.

Phase three “Expanding to Scale”

Involves building on the successes established in phase two. Only 10% of the industry – mostly just the largest companies and sustainability champions – has reached this point so far.

These three phases, if followed by the companies, can help with an EBIT margin uplift of 1 to 2 percentage points by 2030, compared to the 2015 almost flat line. Fashion needs a deeper change and the existing solutions and business models will not deliver results to transform the industry.

Based on discussions with industry players, the Pulse has prioritized three of the most promising areas with possible new innovations: sustainable materials mix, closed-loop practices, and Industry 4.0. In other areas such as wage systems, the innovations and developments are still too far away, and thus cry out for ambitious collaborative efforts.

Sustainable materials mix refers to innovations in new and existing materials to reduce environmental impact. Closing the loop involves minimizing resource consumption by making possible the re-entry into the value chain. This way is creating a repeatedly recycling and reusing materials cycle until the materials become biodegradable waste. And last, industry 4.0 has the potential to recreate the entire way the fashion industry runs today, by leveraging the constantly increasing capabilities of automation and other technologies.

The future fashion outlook

The future of fashion showcasing that the industry will be dramatically different from today. A complete change in how clothes are made and consumed is occurring. The consumer behavior and the role of brands and retailers will be reshaped. The industry has to be able to recognize the trends that will challenge their business models early. They have to plan effective responses that will lead to continued growth.

 

Source Global Fashion Agenda

 

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