Making fashion sustainability profitable remains huge opportunity
2025.02.06
A new report suggests the fashion, textile and apparel industry's biggest challenge over the next few years is accelerating progress on a closed loop and regenerative system - but it also dubs it the sector's "biggest commercial opportunity".
The report titled 'Policy to Profit: How New Rules Create Commercial Wins for Fashion' and published by B Corp boutique marketing firm Grounded points out the financial benefits of climate-related opportunities seen by the world's largest companies have more than doubled since 2020. These firms now average over $3bn each, which equates to the world's largest business seeing $5tn in potential gains.
It asserts "the ultimate business plan to save the world is attainable" as the United Nations Development Program says over $4tn is needed to close the world's financing gap for achieving Sustainable Development Goals.
The report says there are three key things across three phases that will drive business and commercial strategy:
Design/manufacture phase: Minimise the use of finite and fossil fuel-based resources. Re-design, innovate and scale around renewable, recycled or bio derived inputs instead
Use phase: Keep feedstock, textiles, garments and apparel in use for longer - whether through more sustainable textile marketplaces, such as World Collective, or through repair and re-commerce, such as Thredup
Recovery phase: Close the loop through recovery, collection, recycling, re-manufacturing or refurbishment.
The report describes the recovery phase as the most challenging aspect to circularity. It says: "The last yard of closing the loop requires industry-wide transparency, reverse logistics, infrastructure, investment and easily accessible consumer collection points and behaviour change."
Partnership and collaboration will also be critical as working with organisations across the fashion supply chain can help keep the ambition loop going. It also provides a game-plan for how to better integrate policies and regulation into a commercial, brand and innovation pipeline.
Plus, there is a new wave of ESG policy and legislation that fashion brands, retailers and manufacturers will need to comply with to avoid falling behind.
Grounded explains the new and incoming ESG policies that are coming through mainly from the EU and California aim to hold businesses accountable for their impact and contribution to environmental issues such as carbon emissions, water usage, chemical pollution and waste management.
EU's Corporate Sustainability Due Diligence Directive (CSDDD)
California's Climate Corporate Data Accountability Act (SB 253)
EU's Directive on Empowering Consumers for the Green Transition (EmpCo) and Proposed Green Claims Directive
EU's Ecodesign for Sustainable Products Regulation
California's Responsible Textile Recovery Act of 2024 - SB 707
California PFAS Prohibitions
EU Forced Labour Regulation
US Uyghur Forced Labor Prevention Act
The report lists some "failsafe" considerations and drivers of governance, environmental stewardship and commercial innovation, but highlights its AI bot Gaia can also provide more specific recommendations to individual brands and retailers on request.
Mitigating risk
Evaluate the policies to check what's required with a legal counsel
Educate across departments on ESG policy requirements
Understand where the brand does business
Evaluate corporate structures and supply chain connections
PFAS - consider that you may need to prepare for elimination and secure testing services
Know the high-risk materials and where they are in the supply chain
Document all public-facing statements concerning ESG.
2. Taking the first steps
Think ahead about how to support future ESG initiatives
Support all ESG claims with third-party accreditations and certifications
Stay alert to new policies that are being discussed
Perform a landscape assessment to identify potential paradigm shifts
Grounded suggests building out an insight-driven framework that enables any brand, business, social enterprise or non-profit to identify the biggest opportunity for triple bottom line impact at a corporate, culture, category, brand or community level.
The report concludes: "Your sustainability value proposition (SVP) that can drive both commercial and cultural innovation is at the centre of the flywheel - at the intersection between purpose, people (which is the biggest intention gaps for all key stakeholders) and then the planet (the biggest environmental, social or governance based risk and opportunity that you face.
"Hopefully, this is a good starting point to prompt discussion and illustrate how your business can start to take the necessary steps to create your own flywheel of impact to help accelerate better design, use and re-use across the industry.
"The flywheel of impact can be run as a cross-functional workshop in just one day."
"Making fashion sustainability profitable remains huge opportunity" was originally created and published by Just Style, a GlobalData owned brand.
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