Transcript
Fashioning sustainability 2013 . R edes ign ing the f ash ion bus iness 2 Global growth in the fashion industry has for some time been centered on continuously creating new brands, new product ranges and new products to drive sales and growth. Season cycles have shortened, and many high-street brands are now continuously presenting new styles and ranges branching out from the traditional two main seasons to shifting as often as every other week.Consumers have been responsive as indicated by the global per capita consumption of fibers which has in-creased in real terms by 20% 1 . The development has been coined Fast Fashion signifying a production and consumption pattern according to which products are produced, consumed and discarded – literally – fast. The business model is one of which efficiency in sourcing and production in terms of costs and time to market is of essence to drive and meet consumer demand for new styles at the right price.This development in the light of global population and economic growth with a growing global middle-class driving demand for food, housing, energy and clothing is contributing to resource scarcity: A scarcity exacer-bated by climate change and compounded by pollution of the natural environment, leading to pressure on pro-ductivity.Resource scarcity is causing sluggish resource and factor markets, contributing to unprecedented price volatility and rationed access to production capacity. Both factors are directly impacting on business performance even in the short term. Sustainability intersects with business when cotton, oil and other commodity prices display volatility, and the access to resources and production capacity becomes rationed and cuts into profits. It may otherwise go lar-gely undetected in business operations. Companies that read the signs have an opportunity to harness sustain-ability as a driver for change – A change where we make more with less! Change – where changing makes sense This report looks at how industry may harness sustainability as a driver for change – A change that makes sense – A change in the fashion industry business model, reducing business risks through resource independence and enhancing profitability through reduced costs, new markets and products 3 Fashioning sustainability 2013 Key results To better understand how the fashion industry manages the challenges of sustainability, Deloitte has in partner-ship with the Danish Fashion Institute undertaken an analysis based on a qualitative study and a quantitative survey of the Nordic fashion industry – the first of its kind. The analysis shows that there are opportunities for the industry to deepen and broaden management of su-stainability to increase value, reduce lead times, costs of raw materials, wastes and transport while increasing customer engagement and loyalty. But there is a wide gap between today’s reality and the industry’s opportunity to leverage sustainability. The report’s finding shows that: ã Management of sustainability in the fashion industry is mainly focused on overall commitments to sustain-ability and less so on acting on the commitment and showing the results ã Resource scarcity and limitations in access to produc -tion capacity are hurting business, but 7of 10 busines-ses are not focused on managing the environment and natural resources ã The supply chain sustainability strategies that most companies focus on are based on the first generation approaches looking to control suppliers, which have shown limited results in terms of impacts ã The supply chain sustainability strategies are not focu -sing on co-operative and collaborative approaches involving stakeholders which make them inadequate in terms of addressing the major challenges of social development, resource depletion and pollution in the primary production ã 9 out of 10 companies in the fashion industry are not putting a high degree of effort into engaging with consumers with regard to sustainability. Sustainable consumption strategies are new for many companies, and for most they are still a non-existent phenomenon. Looking into the future… Fashion is changing fast – and the fashion industry needs to do the same when it comes to sustainability. New approaches and new ideas are needed if we are to address the significant sustainability challenges facing the industry.Firstly, there is a need to address the question of a dwindling natural resource base through more focus on environmental issues in the supp ly chain, reuse of materials and closed loop thinking.Secondly, in the quest for transparency and the demand for results on investment sustainable supply chain management require new, more stakeholder based approaches.Thirdly, the resource challenge also represents a unique opportunity for engaging consumers through sustainable consumption initiatives and dialogue.With this report we outline the sustainability challenges and opportunities facing the fashion industry. We invite you to engage in the discus sion and are looking forward to hearing your reflections, thoughts or questions. Anne Mette ChristiansenPartner Deloitte The fashion industry is one of the world’s largest industries, while also one of the world’s most polluting. Fundamental change in the dominant business model is happening, and further change is necessary. Furthermore, the fashion industry is an important change agent that reaches far beyond its own realms – not only because of its size, but also thanks to its ability to constantly affect consumer behavior and attitudes through its extraordinary communication platforms.Through NICE (Nordic Initiative, Clean and Ethical), Danish Fashion Institute and its Nordic partners have a shared vision to position Denmark and the Nordic Region as pioneers of sustainable fashion while making sustainable fashion desirable, attractive and relevant to the general public. In order to support the vision, this report combines a deep dive into both ends of the fashion value chain (manufacturing and consumption) to take stock and provide inspiration for a redefined fashion industry. Jonas Eder-HansenDevelopment Director, Danish Fashion Institute 4 7 billion people today 9 billion by 20503 billion people more in the middle class by 2030 Fast Fashion growth: 40% H&M 47% Inditex 69% Bestseller 20% per capita increase in global fiber consumption – 15 kg per capita consumption in the Nordic region with just 3% recyclingWith current levels of consumption of natural resources we need the regenerative capacity of 1.5 Earths, by 2050 we will need 2.3 Earths Cotton and oil prices reach all-time highs and cotton price volatility at 50% above 30-year average7 out of 10 fashion companies are not focused on managing environment and resources like water and cotton neither at home nor in the supply chain8 out of 10 fashion companies are not using to cooperation and collaboration when managing the supply chain sustainability 2 out of 3 fashion companies are not focused on engaging consumers with regard to sustainability
