The retail sector is making bold efforts to promote environmental and social responsibility. But permanently moving the needle into the environmental, social and governance (ESG) aspects of business remains a complex challenge. It calls for exceptional levels of collaboration, commitment, and engagement with consumers – not to mention technology and business innovation.
But there is an opportunity. Consider fashion, for example. At nearly $ 3 trillion in value, industry is a huge part of the global economy. In fact, nearly one in six people is thought to have a job directly or indirectly related to fashion. That is, if industry can make progress in areas such as working conditions, counter-discrimination, and other social responsibility initiatives, it could have a significant impact on the world.
Similarly, by encouraging cleaner, more efficient, less wasteful practices, fashion can reduce the material’s overall footprint in the retail environment. Consider that industry alone is estimated to account for 8% of all global greenhouse gas emissions. And there are also important issues about water efficiency, chemical release, soil conversion, and biodiversity loss.
The good news is that the fashion industry is preparing for change. And through collective action it is beginning to deal with ESG in a more cohesive way, whether that’s through the collaborative UNFCCC Fashion Industry Charter for Climate Action or by non-profits like the Responsible Business Coalition’s Fashion Conveners.
However, if it wants to make sustainability a permanent and real feature, fashion must focus its efforts. Because ESG cuts many aspects of the business and the supply chain, it is easy for initiatives to be cut or too little spread to have any real impact.
Here are some of the ways fashion companies can achieve that focus.
Answer the question of transparency. There are a wide range of targeted interventions that can be trending throughout the supply chain, including pivoting new raw materials, reducing supplier carbon emissions, eliminating chemical hazards. , and improving waste management.
For example, Patagonia is piloting regenerative organic certified cotton to improve soil quality, enhance animal welfare, and support farmers. While H&M and others have already started publishing wastewater data on their wet processing facilities and testing their suppliers.
But it is very difficult to make real progress without the right transparency, the right data, and the right analysis tools. And in most organizations, a lot of preparatory work is required to ensure the integrity and accuracy of these insights. So the priorities are to push forward digital transformation throughout the supply chain, improve data access and reliability, and move toward automated reporting.
Take consumers on board. Nothing says consumers should be involved in the retail sustainability journey. And here, again, transparency is key. Retailers should seek to provide clear, understandable, and consistent insights into ESG through product labeling, including developing industry-wide standards where appropriate.
For example, Accenture worked with the Responsible Business Coalition and Vogue to create the Impact Index to help fashion shoppers better understand their clothing sustainability credentials. For each garment, it allows consumers to drill down on key ESG indications, such as raw material use, chemical use, animal welfare, education, and empowerment, with multiple categories. planned.
Marketers should also think creatively here. We know, for example, that personalized fashion is more popular with consumers. And there is a clear opportunity to combine that kind of customization with sustainability, allowing customers to pick and choose fabrics and manufacturing processes that are consistent with their costs.
Consider S as well as E in ESG. Sustainability is about being social as well as environmentally responsible. Brands must therefore be willing to intervene to uphold the rights of workers throughout the supply chain and enforce fair employment and pay policies. Targeted empowerment and education programs for communities based around the supply chain can also be very effective.
PUMA, for example, worked with a factory partner in Vietnam to identify the causes of wage violations related to working hours and pay. The company helped move the factory to a more transparent and fair system of wages and incentives, raising workers ’wages and reducing excessive overtime.
ESG has good business sense. Retailers and fashion brands are increasingly seeking more sustainable business models, not only because it’s the right thing to do, but because they realize that by making ESG a priority at all levels of the organization, they can strengthen financial and competitive performance. In other words, embedding ESG in a company’s DNA is central to companies ’ability to act productively and thoughtfully. By investing in sustainable organizational practices, businesses can be better positioned to achieve their financial goals while contributing to the well-being of society and the well-being of many.
Transformation using circularity.
Finally, a sustainable future for fashion means moving to a circular economy with greater use of regenerative practices and closed-loop recycled materials. Obviously, full circularity will take time. But circular strategies and plans should be in place now. And brands need to look for investments – including digital platforms and dynamic planning tools – that can start the loop before it closes.
A good new example is Allbirds, which launched ReRun, a new sales platform, along with Trove’s technology and logistics platform. This commitment to circularity will initially offer Allbirds customers the option to trade in their worn shoes for store credit.
The big picture? If retail wants to make tangible sustainability growth, ESG needs to be included as a management strategy, not divided as a separate or silent effort. That, in the end, is the first key step in permanently moving on to the next level.
Consumers want it. Investors want it. The brands themselves want it. Now we need to work together to make it happen.