Is There a Trend of Greenwashing in the Fashion Industry?

By Reilly Sakai – Sustainability Analyst at G&A Institute

Despite being identified by some as one of the top contributors to impact on society’s environmental and social issues, on close inspection we could say that the fashion industry continues in 2020 to lag behind other sectors when it comes to a close review of the industry’s sustainability efforts.

The positives: Some major apparel industry players have or are attempting to create strategies and initiatives to reduce plastic and improve the sustainability of their supply chain.

However, in reviewing industry performance overall, it can be difficult to parse through which initiatives are actually making a difference — and which are simply an example of greenwashing, especially given the lower rate of disclosure of ESG emissions by prominent companies’ reporting.

Solutions? What Steps To Be Taken?

So, we can ask, what steps must be taken now — both at the company and the consumer level?

We can ask this question: Is it possible for an industry that so depends on continuous consumption of its products (clothing) to become more sustainable?

The fashion industry is reported to be responsible for more carbon emission than all international flights and maritime shipping combined — “producing 10 percent of all humanity’s carbon emissions” (source: UNEP, 2018).

The apparel industry is also the second-largest consumer of the world’s water supply — after fruit and vegetable farming, which can be very intensive in terms of water use (source: Thomas Insights, 2019).

And, among the challenges, it’s reported that up to 85% of textiles end up in landfills rather than being recycled or upcycled (UNECE, 2018).

Between 2000 and 2015, clothing sales increased from 50 billion units to over 100 billion units, while utilization of clothing (the average number of times a garment is worn) dropped 36% during the same timeframe (Ellen MacArthur Foundation, 2017).

These figures are nothing to scoff at as various sectors and industries move toward less water use; less waste to landfill; more recycling and re-use, among many measures adopted throughout industries.

Is the Fashion Industry Drive to Sustainability Slowing Down?

And yet, according to the Pulse of the Fashion Industry report from the year 2019, sustainability efforts in the industry appear to be slowing down rather than accelerating to address these issues.

In GRI’s Sustainability Disclosure Database, there are currently 248 organizations that fall in the textiles & apparel sector worldwide. Put that in perspective of the total 14,476 organizations in the database.

That’s less than 2% of reporting organizations in the textile & apparel sector. In the sector, there are just 80 GRI Standards industry reports, vs 4,089 GRI Standards reports in the database as a whole.

Given the rate at which the global fashion industry has been growing (before the coronavirus emergency) – more people, more apparel, more income, etc) — we might conclude that companies in the industry have simply not been doing enough to offset their well-charted detrimental environmental impacts.

So what to do now? We know that the fashion industry is important in terms of global economic impact and employment, and creativity – while also being a top contributor to waste, greenhouse gas emissions, water pollution, and an array of other negative environmental factors.

Incentives For Changing – Lacking

Today, there aren’t major economic or societal incentives in place for apparel companies to make real changes.

It’s going to take a lot of time and effort, not to mention considerable investment, to switch factories in which clothes are produced and polluting or violating human rights and so on (to address key ESG issues).

And it’s also quite difficult to have real transparency at every level of the apparel and footwear global supply chain to help to ensure a more sustainable production process.

Consumer Tastes – May Make a Difference. Maybe.

Moreover, while many consumers are now starting to buy what they believe to be the more sustainable products in many categories including fashion, very few consumers are apparently willing to pay more for them — or have the time or means to investigate every company’s sustainability initiatives and track record before making their purchase (Source: Pulse of the Fashion Industry, 2019).

Since it’s so much quicker and cheaper to do, companies instead may turn to marketing messaging that tells their customers that they are working towards a more sustainable future — without actually doing much or even anything in reality.

What Leading Companies Are Doing – the Positives

There is good news.  The “we are sustainable” message has begun to sell well and customers have been moving to certain apparel brands that are promoting a sustainable vision — without the buyer being able to (at point-of-sale) fact-check a company’s claims. That is the reality of at-market sales.

We can begin by taking a look at Everlane, which touts “radical transparency,” but doesn’t actually divulge the name of the factories in which its garments are produced.  So we don’t know what is going on there.

Patagonia, on the other hand, is considered best-in-class, offering repair and buyback programs in order to promote a circular economy, and has a multitude of policies and systems in place to ensure they’re doing everything they can to protect the environment and people who work at or interact with the company.

Nike, similarly, has done a lot to improve their supply chains over many years, using innovation as a driver for sustainability.

Rather than increasing factory audits to ensure that workers are wearing protective gear, Nike engineered a non-toxic glue so protective gear is no longer needed.\

Nike’s flyknit sneaker vastly reduced the amount of material needed to construct a shoe, meaning lower costs and less waste.

Other brands, from Adidas to Puma, have followed suit.

On the luxury end, Eileen Fisher has been a staple of sustainable clothing for decades, sourcing environmentally friendly materials, offering a buyback program, upcycling old materials into new garments, and sharing the wealth with all of her employees by offering a comprehensive ESOP.

Looking to the Future to Protect the Planet

With our Planet Earth’s environmental situation growing ever more dire, it is critical for the fashion industry — now! —  to encourage and make major changes — but convincing individual corporate leadership that this is a worthwhile investment is no small feat.

Because of the higher costs typically associated with implementing sustainability initiatives (or at least the perception of higher cost), overhauling a company’s entire supply chain is quite challenging.

Many fashion companies do not find it feasible in this competitive pricing environment to raise their prices or cut into their margins, especially when they continue to see the industry growing at such a swift pace year-over-year.

Perhaps more and more companies will consider Nike’s successful approach. That is, increasing spending in R&D as opposed to marketing, which has major potential to decrease costs and increase margins in the long-term, while improving their ESG efforts at the same time.

In my opinion, it’s going to probably take some form of public sector intervention or a mass consumer revolution or some similar dramatic action to influence the bulk of the fashion industry to move toward a truly sustainable future – and one of those things might happen sooner than later.

The leaders in corporate sustainability in the industry will be the major beneficiaries when the tide turns.

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Reilly SakaiReilly Sakai is a sustainability analyst at G&A Institute; she began her work with us as one of our outstanding analyst-interns in grad school. She is completing her MBA program in Fashion & Luxury at NYU Stern School of Business, where she is specializing in Sustainable Business & Innovation, and, Management of Technology & Operations. She has been working with NYU’s Center for Sustainable Business on an independent study that explores environmental sustainability in apparel manufacturing.

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