With many a debate raging over the level of progress made on key environmental and development issues at the UN’s Rio+20 conference, SOURCE contributor Katharine Earley considers some of the positive actions to emerge and reviews the major sustainability challenges facing the fashion industry moving forward. This article includes insights and observations from ethical fashion expert Ilaria Pasquinelli, Veja’s UK Director Aurélie Dumont and James Hulse of the Forest Footprint Disclosure Project. It also features a case study of Veja’s ethical business model.
The UN Convention on Sustainable Development, or Rio+20, was due to unite world leaders, business leaders, NGOs and civil society in defining a roadmap to reach the (currently) utopian ‘green economy’. The scene was set, the world’s media gathered to capture history in the making and a fanfare of social media commentary exploded around the globe, trumpeting the momentous nature of the discussions. Meanwhile, responsible businesses, politicians and environmentalists waited with anticipation to hear the definitive outcomes of the much-heralded global conference, 20 years on from the original Rio Earth Summit.
Divided opinion on Rio +20
Opinion has been highly divided as to the success of Rio+20. Fashion and environmental professionals alike have used the words ‘disappointing’ and ‘frustrating’ to describe the inertia and lack of clear progress on key issues, such as climate change, water scarcity and food and energy security. Some have made reference to a corporate ‘beauty parade’ of sustainability achievements. In retrospect, many have debated whether the goals of the summit were in fact wildly ambitious, given the short three-day timeframe for 132 countries with hugely divergent agendas and economic backgrounds to agree a common way forward to benefit people and planet.
The UN Secretary General, Ban Ki-moon, stated post conference that “we saw a further evolution of an undeniable global movement for change in Rio”. Given the stark absence of several major world leaders (including those of the US, UK, Russian and Germany), the sharp criticism from Greenpeace and others on the perceived weak nature of the final text, and lack of progress on defining the Sustainable Development Goals, are we really any closer to creating a green economy in the context of sustainable development and poverty alleviation? And where does the fashion industry stand in all of this?
Changing attitudes within the fashion industry
“In the fashion industry we are beginning to see a change, with major players now starting to treat sustainability as a strategic element,” explains Ilaria Pasquinelli, Board Director, Ethical Fashion Consultancy. “I have seen a shift in the industry in the past year alone, with fashion brands seeking to find solutions to integrate sustainability into their business strategies. Conversations around sustainability in our industry have matured, meaning fashion professionals will increasingly be involved in sustainability issues, and ethics will not be confined to CSR departments.
“However, the lack of governmental participation in Rio+20 is a critical issue, particularly for the fashion industry,” continues Pasquinelli. “The global clothing supply chain is highly complex and lacks a common set of rules and regulations, which creates plenty of loopholes for businesses to avoid taking responsibility for their carbon, environmental and social footprints. There is a growing need for clarity and a level of standardisation that we do not currently have in place. This is where the role of government will be crucial.”
Rio +20 and the fashion industry
While the role and responsibilities of the fashion industry was not included in the forging of the final text, it did enter many a discussion at the various Rio side events. Veja’s François Morillon accompanied the French delegation to the summit and presented at a side event on sustainable practices in the Amazon, where he spoke about Veja’s emphasis on sourcing rubber exclusively from communities of sustainable rubber tappers. Representatives of the Brazilian state of Acre also attended, along with companies, NGOs and French government ministers. Their discussions focused on the need to use the economy or financial incentives as a means of fighting deforestation, by making it more commercially attractive to preserve the the forest than destroy it.
Meanwhile, many industry representatives attended the “Changing the World Through Fashion” Summit hosted by the Nordic Fashion Association, where delegates heard from well known speakers such as Katharine Hamnett, who spoke of the real ‘fashion victims’ – from the farmers dealing with pesticide poisoning to taxpayers in the US shouldering the heavy cost of the United States’ cotton subsidies.
It was not all doom and gloom, however. Delegates heard from Holly Dublin, Special Advisor on Sustainability at PPR that “the industry is clearly starting to heed the social and environmental costs associated with doing business as usual,” as she spoke of Puma’s ground-breaking ‘Environmental Profit and Loss Account’. Meanwhile, Jonas Eder-Hansen, development director of the Danish Fashion Institute, who had just attended the Sustainable Apparel Coalition gathering in Hamburg, also voiced an optimistic opinion for the future, explaining that currently one third of the clothing and textile industry’s global output is throwing its weight behind the Sustainable Apparel Index, suggesting that the fashion industry is beginning to take its impacts seriously.
Positive steps forward at Rio+20
Elsewhere, beyond fashion circles, progress was also made. The UK’s Deputy Prime Minister Nick Clegg announced that all companies listed on the London Stock Exchange would be obliged to report their carbon emissions from the next financial year. Furthermore, 50 companies committed to becoming ‘deforestation free’ by 2020, while the Global Canopy Programme launched ‘Think PINC’, a global framework to transform Brazil into a ‘sustainable agricultural power’ (while respecting its enormous biodiversity).
An important dialogue also took place on the importance of the ‘natural capital’ constituted by the world’s rainforests. Ministers, NGOs and business leaders (including Puma), gathered to declare their support for the Natural Capital Declaration, which aims to ensure that the financial services sector actively factors in the value of natural capital when creating their products and services.
“One of the positive elements to emerge from Rio+20 was the focus on companies’ use of natural capital,” explains James Hulse, Director, Forest Footprint Disclosure. “Within the fashion industry, much of the focus has been on cotton and water use, but two commodities have started to receive more attention recently due to their links with deforestation: leather and packaging.”
The Forest Footprint Disclosure (FFD) project works with companies to reduce their impact on deforestation. An increasing number of high street and luxury brands are now participating in order to improve the sustainability of their supply chains. Many of these companies are members of the ‘Leather Working Group’, a multi-stakeholder association that aims to improve performance in the tanning industry.
“The Leather Working Group is actively working on the pressing issues created by deforestation in the Amazon, although there are no easy solutions to the problems of achieving traceability and meeting sustainability criteria,” continues Hulse. “Nike was the FFD clothing sector leader in 2011. The company is currently setting the standard for supply chain traceability. As investors and policy makers focus more on natural capital, companies will need to rapidly address these issues in their supply chains if they are to stay ahead of the curve.”
Key sustainability challenges for the global fashion industry
The environmental and social challenges post Rio+20 remain as stark as ever for the global fashion industry, with environmental degradation caused by rampant cotton farming becoming increasingly apparent, and concerns growing over the substantial quantity of water and colossal amount of pesticides used to grow it. Cotton accounts for 2.4% of cultivated land worldwide but accounts for up to 24% of pesticide use.
The demand for cheap clothing will only intensify as the global population continues to expand. Meanwhile, escalating demand for food crops may threaten to reduce the amount of land used for cotton farming, sending cotton prices soaring. And who will bear this cost?
“One of the major issues will be the increasing need for food caused by population growth and the relative risk of losing land for other crops, such as cotton,” comments Pasquinelli. “Cotton prices are likely to rise again as land available for cotton farming is reduced, and therefore the fashion industry, particularly high street retailers, will need to make decisions as to who will pay for these rises. Surely, consumers will not want to shoulder the cost, after years of decreasing retail prices? As a consequence, interest for alternative fibres will most probably rise.
“In addition, as the ‘middle class consumer segments’ of emerging markets grow, fashion consumption will also rise, prompting an increase in production in these countries,” continues Pasquinelli. “This means that it will be extremely important for textile and garment factories to invest in more sustainable industrial processes.”
Some of the solutions being suggested by leading fashion professionals are collaboration, innovation and maximising the role of the economy. Policymakers must create the regulatory and economic framework needed to transform business and manufacturing practices within the industry, with experts including Pasquinelli highlighting that simplicity and standardisation will be key to promoting change.
Less mainstream natural fibre varieties and new generations of synthetic fibres will undoubtedly become more important, while innovation in bamboo yarns and fabrics along with polyester recycling may also prove to be good alternatives to cotton, if demand creates sufficient demand to upscale these methods.
Transparency and the importance of a social conscience
All too often in global fashion supply chains, raw materials suppliers become obscured at the bottom of the chain, with little pressure being forced back down the chain to spur them into action (or only when raw materials become a political issue). Manufacturers are keen to move away from virgin raw materials and prioritise recycled materials in order to meet the growing resource constraint, as noted during a recent Guardian Sustainable Business Supply Chain discussion. Aurélie Dumont, UK Director of sustainable footwear and accessories manufacturer Veja, believes that transparency will be absolutely vital going forward.
“It’s fundamental that manufacturers have visibility over every element in the supply chain, from the cotton farmers to the finished product,” explains Dumont. “This is harder for larger companies, who are often very far removed from their raw materials suppliers. Additionally, both fashion businesses and consumers need to ask themselves how workers can be fairly compensated all the way down the chain – from the farmer who grows the cotton to the weavers, spinners, designers, manufacturers and retailers. Something has to change, otherwise how will all these people’s costs be covered if we continue to mass produce cheap clothing?”
Dumont explains that another of the main challenges facing the fashion industry is social, citing workers’ rights in developing Asian economies (such as Bangladesh and China) as a major cause for concern. Meanwhile, transport is another key issue, with many fashion supply chains reaching all over the world, producing significant emissions from multiple air, sea and road journeys.
The Puma ‘Environmental Profit and Loss Account’ presents an in-depth report of the company’s carbon emissions and water consumption, and has been lauded as a pioneering attempt to attribute a cost to the impact a business has on its supply chain. Crucially, it also allows Puma to accurately target its key areas for improvement by impact and region.
Action on sustainability within the fashion industry
“The fashion industry needs to make a monumental change that will only be possible if companies change their business model and treat sustainability as a strategic element that affects their long-term vision,” comments Pasquinelli. “Sustainability has long been considered as a ‘nice to have’. In order to create an impact we need a disruptive change, and this can only be achieved with the full engagement of fashion leaders.”
Pasquinelli explains that she has recently visited Brazil and met with both Veja and fellow French ethical brand Tudo Bom?, explaining that both brands have really shaped their business model to reduce poverty, build capacity, improve environmental conditions and achieve commercial success.
Veja: an ethical business model
Veja was founded by Sébastien Kopp and François Morillon in 2005 with the aim of creating a desirable sports shoe while respecting and fairly remunerating its farmers and raw materials suppliers. This is partially achieved through Veja’s ‘no advertising’ stance. The company believes that at least 70% of the cost of fashion goods is often attributed to marketing and advertising. This together with its many sustainable sourcing initiatives, sets Veja apart as one of a ‘new breed’ of ethical fashion brands – which, Dumont explains, still account for just a small proportion of the fashion industry as a whole – dedicated to reversing traditional business models and driving a new kind of business forward, whereby the environment and workers’ rights are respected.
“Sébastien and François had heard a lot of ‘words’ about proposed changes in the systems of production used by fashion supply chains, but hadn’t seen enough action – they were determined to change this,” explains Dumont.
Veja sources all its raw materials sustainably and ethically in Brazil. It worked with the WWF to establish links with rubber tapping communities in the Amazon. Veja uses eco-tanned leather (dyed with minerals and vegetables) and organic, Fairtrade cotton, farmed by 350 Brazilian growers. New for the 2012 autumn/winter season, the company is also using sustainably dyed suede and wool. It uses water-based glue, and ensures that its packaging is cut to fit the size of the shoes.
With a strong focus on positive social and environmental outcomes, Veja creates employment among developing communities both in Brazil and in Europe, through its work with the Atelier sans Frontières (whereby disadvantaged communities are offered the opportunity to pack and load boxes). Workers are paid above average, which is made possible by Veja’s stance on zero advertising, while there is also a keen focus on sustainable transport, with goods being shipped from Brazil to France by boat and then onwards from the French port of arrival to Paris by barge.
Veja’s Paris headquarters has switched to renewable energy supplier to Enercoop, and uses a co-operative bank in France, while its UK HQ is also reviewing its CO2 emissions and how best to reduce them.
Rubber tapping project and WWF partnership
The WWF was Veja’s partner in setting up its sustainable rubber sourcing operation. The 36 communities with whom the company now works follow a process called called ‘Folha desfumada liquida’ (FDL), which avoids the need for rubber to be processed in a factory prior to the manufacturing stage. Veja bought 14,000kg of rubber from these communities in 2011.
The only problem with the process is that it is fairly slow and manual, which lowers productivity. Also, contrary to rubber tree plantations (which are take the form of grids, as they were introduced artificially by British colonialists to the former British colonies), the rubber trees in the Amazon forest are dotted around randomly, meaning more time is needed to move between them. However, Veja believes that the environmental and social benefits outweigh these concerns. Additionally, working in partnership with a leading NGO has been very beneficial.
“NGOs bring a deep level knowledge of a particular subject area and often have experienced teams working on the ground – this can be very useful to manufacturers,” continues Dumont. “The manufacturer then brings a market for the product and the financial power to turn the project into a commercial success.”
Commercial growth via sustainable practices
Veja made €5.2m of sales in 2011, a substantial increase from €313,000 in 2005. Its shoes are sold in France, UK, Spain, Italy, Germany, Greece, Japan, Hong Kong, USA and Canada. It now produces more than 121,000 adult pairs of shoes a year. Importantly, the quality and desirability of the product has led to a good reception from retailers and customers. Veja will be selling via Asos for the first time this year, while its ‘Kids’ collection is now selling in Liberty and Selfridges and its range of leather accessories is growing.
This article was published on the Ethical Fashion Forum’s SOURCE Intelligence website.