Action, Reaction and Market Transformation in the Apparel Industry - Erb Institute | Business For Sustainability

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Action, Reaction and Market Transformation in the Apparel Industry - Erb Institute | Business For Sustainability

By Paula Luu, MBA/MS Candidate 2019 Erb Institute | Business for Sustainability

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READ: How the apparel industry has responded to #sustainability challenges with willingness to collaborate on #markettransformation strategies http://myumi.ch/L1RXO @erbinstitute #supplychain
Wednesday, March 21, 2018 - 3:40pm

Paula Luu is currently enrolled at the University of Michigan and pursuing a dual-degree MBA/MS between the Ross School of Business and the School for Sustainability and Environment. Paula is interested in developing and improving organization-wide processes along the supply chain.

Sustainability—or a lack of it—has punctuated the apparel industry’s most notable moments over the last few decades. They include Nike’s sweatshop scandal in 1991, Patagonia’s public commitment to recycled polyester in 1992 and organic cotton in 1996, Levi’s 2010 launch of its Water<less jeans and last year's Adidas “Speedfactory” opening in Germany.

These events highlight the industry’s ongoing challenges: ensuring humane conditions for garment workers, minimizing waste and pollution during production, and localizing production. The apparel community is realizing that its future depends on addressing these challenges. The 3-trillion-dollar industry accounts for 10 percent of global carbon emissions, uses 70 million barrels of oil a year to make polyester fiber, logs more than 70 million trees a year for fabrics and is responsible for 24 percent of all insecticide and 11 percent of all pesticide use globally.

However grim a picture those facts paint, the industry’s strongest assets have been brands’ willingness to collaborate and industry-wide support for the Higg Index, a standardized tool that helps brands measure their environmental impacts. The organization that created the tool, the Sustainable Apparel Coalition (SAC), has pushed the industry forward on environmental and social issues.

In May, I attended SAC’s annual Planet Textiles conference in Bangalore, India, to learn how leading apparel brands are innovating their supply chains and reshaping retail. Listening to industry professionals share stories helped contextualize the two converging strategies I see the apparel industry using.

The first is to retrofit an outdated system. Legacy brands like Gap and New Balance are being transparent about their suppliers, partnering with suppliers and owning their responsibility to their vendors, and making long-term commitments to local communities by investing in infrastructure improvements. These same strategies have turned Nike into one of the industry’s most prominent and vocal sustainability champions.

Still, some retailers are realizing that integrating sustainability into conventional business practices isn’t enough. Despite a spike in the demand for more ethically and sustainably made clothing, the world is on track to triple our use of natural resources by 2050, and apparel manufacturing is migrating away from countries like China, where worker wages and pollution fines are increasing, to countries like Ethiopia that have weaker worker protections and environmental standards.

If retrofitting the industry was the groundswell that moved the apparel industry forward in past decades, market transformation is what’s making the most progress now. The most innovative brands are changing the way they approach their risk regarding climate change, overseas labor and water scarcity by turning the risk into an opportunity. These businesses represent only a sliver of the pie, but they are changing how the apparel industry approaches creating textiles, reusing materials and empowering workers.

At Planet Textiles, Ian Rosenberg talked about starting a fabric company after trying to create jobs that would bring Haitians out of poverty. A few years later, Thread International is now selling its fabric to brands like Timberland to make shoes from unrecyclable plastic bottles. Through R&D and creative thinking, the company created a solution to Haiti’s plastic problem, developed a high-quality fabric that diverts trash from landfills and created steady incomes for dozens of Haitian families.

Similarly, Cradle to Cradle’s Fashion+ initiative is working with brands across the world to invent and promote closed-loop fabric dyeing and finishing processes that are carbon neutral. The industry’s greatest opportunity lies in its ability to create new apparel materials, educate consumers and build an industry that respects and protects everyone in the supply chain, from cotton farmer to retail employee. Retrofitting the current system needs to continue as new business models and processes come to life; both strategies are necessary, and they must eventually converge.

This is the first of a series of blogs. In the coming weeks, I will continue to highlight how both indie and global brands are reinventing how we design, make and sell our clothes—and how consumers are influencing industry-wide change as well. Read Part II here.

Keywords: Supply Chain & the Circular Economy | Apparel | Corporate Social Responsibility | Cradle to Cradle | Erb Institute | Fashion+ | Paula Luu | Recycled Fibers | Recycling | Responsible Production & Consumption | Sustainability