The fashion industry has a complex value chain. All actors, including customers, need to play a role to cut Greenhouse Gas Emissions.
Sustainability in the fashion industry’s supply chain represents a great challenge. From a global standpoint, the supply chain sees each brand with several suppliers and sub-suppliers.
The supply chain is responsible for the most significant amount of emissions. Based on the Mckinsey report - Fashion on Climate, we are aware of the fact that currently, over 70 % of emissions come from upstream production.
- 38% comes from Material Production
- 15% from Wet Processes
- 8% from Yarn Preparation
- 6% from Fabric Preparation
- 4% from Cut Make Trim.
To effectively claim sustainability, fashion brands face the challenge of ameliorating the environmental and social impact of the supply chain.
The great sustainability challenges of Supply Chains in Fashion
The suppliers that produce raw materials or manage the wet processes are often not direct suppliers of fashion companies. Therefore, they are not fully aware of how the sourcing of the raw materials is managed.
This hinders fashion companies from efficiently quantifying the environmental and social sustainability of their products. Having control of the supply chain is critical to enable control of environmental and social responsibility.
Moreover, the supply chain’s complexity is increasing at a fast pace especially due to economic risks, but also to the difficulties associated with sourcing raw materials as well as the fact that several countries are facing a state of crisis due to climatic changes, pandemic events and socio-political issues.
For example, it has become more difficult to obtain raw materials from other countries in the last few years.
This is why the supply chain in fashion is so important, and we need to talk about it.
“If abatement efforts continue to expand at the current rate, the industry can maintain GHG emissions at 2.1 billion tonnes in 2030. In net terms, this represents an abatement potential of around 636 million tonnes"
However, this is not enough. At this pace, the industry will miss the overarching goal of avoiding exceeding the 1.5 C° degrees threshold objective by 50% (set by the Paris Agreement). Due to this, working on renewable energy and improving material processing are top priorities for fashion brands to drastically reduce their emissions.
On the environmental impact of material production
Previously we have said that 38% of emissions originate from material production. An important thing to consider is that each type of material faces distinct challenges.
Taking the example of cotton, there exist environmental issues linked to the use of pesticides and social issues bound to the manpower and to their civil rights
Moreover, in the case of polyester, other issues occur. Importantly, the dependency on the unsustainable use of fossil fuels and the pervasive production of microplastics.
Altogether, it is highly challenging to consider the environmental impact caused by the supply chain of raw materials. Depending on the industry, this will be highly case-specific because different materials have different roles and use across the supply chain.
As an example, the production of viscous is achieved through a chemical process prior to the dying process.
Here, the lack of data appears as the factor that mostly hinders our understanding. The reasons are mainly two:
- Companies are not fully aware of the impacts of their supply chain, resulting in no data gathered to estimate their CO2 emissions.
- Often the supplier itself does not measure the environmental impact of its activity.
Working with average data creates a lot of confusion and a lack of transparency
Cotton implies massive water consumption. Some sources say that we need 2.700 litres to produce a single t-shirt, though it is not clear how the underlying data is collected.
These sentences create confusion among potential customers and do not bring any added value regarding the sustainability of the industry.
How is it possible to understand the environmental sustainability of a cotton t-shirt?
The first step is to make a difference between the consumption of water vs. the use of water.
Consumption implies that a company takes the water resources and exhausts them with no environmental offsets. On the other hand, the use of water means that part of the water resources is either reutilized in the process (e.g., recycling and/or purification) and/or environmentally offset.
Sustainability also depends on the country’s characteristics. If the country lacks water resources, is rain sufficient or does the cotton require artificial irrigation? This is another issue.
Having an intensive water consumption process in a country at a high risk of drought has more impacts than having a water-intensive process in a country without drought issues, raising social problems.
Therefore, we cannot rely on average data: sustainability depends on the characteristics of the area, which makes this problem more or less evident.
How can we integrate sustainability into the Supply Chain?
There are two different approaches
- Working with suppliers that incorporate sustainable practices
- Helping one’s suppliers to become more sustainable.
Both approaches have pros and cons.
If a brand chooses a sustainable supplier, it is incentivizing them, but sometimes the price increases, there is a higher lead time. So companies could not choose this option because of the drawbacks which need to be taken into account.
The second approach consists in helping one’s current supplier to become more sustainable. However, does the company have the knowledge and the ability to drive change in the supply chain? In fact, this process can be extremely long and complex.
Accompanying suppliers in this path is not easy and an influential commercial strength is needed to drive change.
How fashion brands can improve their supply chain
The first step for a brand is to know its supply chain and analyze the environmental impact of its suppliers.
At Cikis Studio we individuate the most important suppliers of brands and start collecting surveys of how the suppliers are working on sustainability.
In this way, the analysis of suppliers in terms of sustainability performance can be started.
Only then it is possible to define a strategy.
It is a long process because suppliers need time to answer, data analysis can be time-consuming and so on. It is difficult but a strong starting point is fundamental.
The fashion sector is already improving traceability
Both big companies and small companies are moving in this direction.
They use software that helps them with traceability, which in turn needs a person to manage them and investments to develop it. It’s an expensive and time-consuming activity, a multi-year process.
On the other hand, controlling the supply chain will help companies not only to improve their sustainability but also to reduce their economic risk. In fact, supply chain traceability is not only about sustainability… It is also about fashion companies managing their economic risks.
What if a brand does not have the commercial power to drive innovation?
Some fashion companies do not have the commercial strength to drive innovation in the supply chain. In this scenario, they should follow the initiatives of international organizations.
WWF organizes several initiatives on environmental issues. For example, together with Ralph Lauren, they are running a project on water-saving in cotton production.
In this framework, an organization cooperates with stakeholders and other brands to address a specific issue.
This is related to the assessment of the supply chain because the issues of a specific company depend on the activities of its suppliers.
Many companies, especially big ones, are integrating sustainability in the decision-making process in terms of suppliers. Sustainability performance is part of the evaluation of suppliers.
The role of regulation in environmental issues in the Fashion Supply Chain
Regulation is coming into place with the EPR (Extended Producer Responsibilities). In the future scenario, brands will be involved in the treatment or disposal of post-consumer products and the Environmental impact will be far more visible for customers.
Also, more regulations on Greenwashing are emerging. In Italy, there has been a verdict on this topic. Miko was accused by Alcantara of using greenwashing for their product, without proving it. Greenwashing has been judged as an unfair commercial practice.
Greenwashing in the future will be more and more dangerous in legal and marketing terms. For this reason, companies need to work seriously on their sustainability before making claims.
Adidas as well has been accused of greenwashing for the Stain Smith shoe claim.
Overall, brands and companies need to be proactive and anticipate the regulation, in order to reduce the economic risks and lead the environmental change.
The role of Product Design in the environmental issue
Product design regards not only the production processes but also the end of use. Today recyclability is very low in the fashion industry. Most garments end up in landfills or incinerators. Maybe surprisingly, it is important to work on this aspect also at the design level.
For example, the choice of materials is important. There are several sustainable solutions in the market. However, even if brands choose sustainable suppliers, they require a high level of customization that is unfeasible for a process that intends to be sustainable.
If a fabric is to be recycled, there are some limitations to consider. And sometimes fashion companies choose the unsustainable solution because of the higher possibility of customization.
The power of collaboration is the way to a more sustainable supply chain
It’s important to have a dialogue between brands and suppliers. Sometimes there is an asymmetry of information. It’s important to spread knowledge, so a brand can make the right sustainable choice fitting with their needs.
Also, standardization of requests will play a key role because of the fact that standards often change (between brands and countries) and this represents a critical issue for suppliers. It is in this context that the international framework plays an important role.
In the end, brands need to incentivize the supply chain to be more sustainable and work on these innovations.