COP27’s top takeaways for fashion brands – Glossy

cop27’s-top-takeaways-for-fashion-brands-–-glossy

During the biggest climate conference in the world — COP27, which wrapped up in Egypt last week — it became more apparent that the fashion industry still has work to do right-track its environmental impact. But experts are optimistic that sustainability initiatives and environmental impact awareness will remain focuses for the industry in the coming year, based on the groundwork that’s been established. 

Here, we outline three ways fashion brands can forward sustainability in 2023, according to the experts on the ground at COP27.

Start acting on fashion’s ‘brain print,’ not just it’s footprint

Rachel Arthur, sustainability consultant and founder of sustainable community platform FashMash, said there needs to be a shift in the narrative around fashion’s environmental impact. The industry’s emissions are said to account for 2-8% of total global emissions, but that’s just one piece of the pie. “The industry has a much larger brain print,” said Arthur, explaining that fashion has a broader impact, on people’s lifestyles. Its focuses on constant consumption, trends and exclusivity fuel wider consumption habits, she said.  “That responsibility, whether you’re a fast fashion brand or a luxury brand or anything in between, is huge, in terms of the change that we can be making.” 

“Looking into 2023 and beyond, the industry needs to take more ownership in starting to turn things around,” said Arthur. “Fashion can point consumers, businesses, other sectors and policy makers toward a lifestyle that will keep us within that 1.5 degree target” set by the Paris Agreement to curb planet-changing climate effects. 

Consumer behavior is starting to shift, with campaigns by Vestiaire Collective and Ebay urging consumers to shop resale as opposed to new products, and more consumers opting to avoid greenwashing companies and their products. And fashion is influencing outside sectors including science through investment and proof of concept. For example, Hermès made a bag from mycelium in collaboration with MycoWorks and Pangaia has a growing list of material partners. 

Among announcements at COP27 was a new partnership between retailers including H&M, Kering and Inditex with non-profit Canopy. Together, the brands have committed to purchasing over half a million tonnes of low-carbon alternative fibers for use in clothing and packaging, to reduce their emissions.

“​​We don’t currently have big, commercial-scale production at this point, with the notable exception of our Renewcell mill [opened November 14],” said Nicole Rycroft, founder and executive director of Canopy. “But these purchasing commitments by brands [could] change that by sending a clear signal to investors that the market is ready to source these game-changing solutions. We anticipate that we’ll have at least 10-20 of these mills between now and 2025.”

COP27 speaker Debbie Shakespeare, head of sustainability, compliance and core PLM at manufacturer Avery Dennison RBIS, said fabric recycling should also be a brand focus. “If we recycle fabrics on an industrial scale, the costs of recycled material will come down, and brands will be able to make real progress toward their Scope 3 sustainability goals. What will be required is a reliable information bridge that allows all parties to understand the provenance and material make-up of every garment, as well as [obtain] information on how to recycle.”

Resolve tension between antitrust and ESG commitments through open conversation

Transparency could become a cornerstone topic of sustainability conversations in the industry, to ensure they don’t violate antitrust laws. The antitrust factor came into play this year.

In May 2022, Reuters reported that several fashion companies that had signed the Forum letter and created the Rewiring Fashion proposal in May 2021 had been raided by E.U. antitrust regulators for antitrust violations. They included Selfridges, Rodarte, Thom Browne and more than 50 others. Both the letter and proposal were focused on limiting global brands’ practices of releasing multiple collections a year, as well as repairing the damaging impact of the fashion calendar on brand sales. For one, runway designs are directly copied by fast fashion brands.  

This issue poses a conundrum for the industry: How can sustainable production and systems change happen without changing the way the market currently functions? While the answer is still being considered, fashion brands and houses will have more luck enacting change if conversations are conducted out in the open alongside governmental reform. 

“Growing the fashion industry will grow its greenhouse gas footprint at the same time, unless we carve out more sustainable models for production and consumption,” said Shakespeare. “That means fully embracing circularity, investing in innovation and scaling proven innovative solutions.”

At the same time, regulations from the U.S. through the Fashion Act and the sustainable textile strategy regulation set by the E.U. Commission in May are affecting brands’ long-term planning. The E.U. standards and regulations will apply to all goods produced within and imported into the E.U. starting in 2030, and the recently amended Fashion Act could be passed as soon as next year. The Fashion Act will apply to every fashion retailer and manufacturer doing business in New York that has annual worldwide gross receipts exceeding $100 million.

Overall, the industry is aiming to coordinate and develop new ways to decouple revenue from resource extraction through de-growth. “All across the value chain, from raw material procurement to the supply chain to consumer facing revenue streams, sustainability is an alternative source of value creation. That value could be in the risk reduction, margin enhancement, speed to market or new channels of distribution [it provides], like resale,” said Frank Zambrelli, executive director of the Responsible Business Coalition at Fordham’s Gabelli School of Business. “Companies have begun recognizing that their products need to be built and priced with the idea of selling them more than once, with materials that help them reach both their financial goals and the ESG targets, for investors to reward such behavior with higher valuations.”

According to management consulting company Bain and Co., purpose-led brands “create a virtuous cycle that forms the heart of a new, self-reinforcing model of purpose-driven capitalism” by shining a light on an existing ESG issue. They pique consumer interest in their products, spur retailer demand, and attract and motivate high-quality employees. In turn, that leads to higher growth and greater interest from investors. This year, sustainable activewear brand Tala raised $5.7 million in seed funding from investment companies Active Partners and Venrex. And Material Exchange, the platform for sourcing from sustainable suppliers, closed a $25.3 million Series A funding round led by venture capital firm Molten Ventures.

Co-opetition: See cross-brand collaboration as the norm

Brands like Puma are already talking about co-opetition, or cooperating with a competitor to achieve a common goal. “Across and within industries, leadership is becoming attuned to the [fact] that certain elements of fashion industry transformation simply cannot happen without partnership,” said Zambrelli. 

“Every company will be reliant on their partners, vendors and suppliers to assist them and each other in achieving publicly facing greenhouse emissions targets,” said Zambrelli. “The next few years will see a revolution in collaboration, as stakeholders find new ways, products, services and information systems that facilitate these partnerships [facilitating] greater sustainable and financial success.”

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