LONDON, United Kingdom — Last year, the global fashion industry produced 114 billion pieces of clothing. Americans consume more than 20 billion garments per year, or 64 items per person every year. These are mostly cheap, disposable clothes, manufactured in enormous quantities, using a vast amount of natural resources, often by workers toiling away in unconscionable conditions at a huge social and environmental cost.
This fundamentally extractive model, decades in the making, is now being put to the ultimate test by the coronavirus crisis, which has crushed consumer demand and already put millions of workers out of work, from the factory floor to retail stores, making plain their longstanding suffering, all against the looming threat of a climate emergency rendered so vivid in catastrophic wildfires in California and Australia just a few months ago.
Fashion is now one of the world’s most destructive business sectors, alongside energy and transportation. No longer able to hide behind aspirational marketing campaigns, its secret is out in the open, catching the attention of government regulators, consumers and a growing group of stakeholders who are holding the industry to account.
While the pandemic didn’t create the current crisis in fashion, it most definitely accelerated it. Plenty of fashion companies and retailers will not see the other side. But for those planning for long-term survival, they must take greater responsibility in overhauling a business model that is fundamentally rooted in the exploitation of both people and our planet.
A People Business, a Finite Planet
Fashion is one of the largest employers in the world, with more than 100 million people working in factories, creative studios, boardrooms and shop floors. The majority of these workers are women and girls, many of whom are working as artisans, garment workers and textile weavers in the Global South. The Global Slavery Index estimates that 40 million people are living in modern slavery and many of these work in the supply chains of international fashion brands.
But the problem doesn’t stop there. For years, fashion companies have relied on outmoded business models with a linear “take-make-dispose” approach, where value creation is maximised by producing and selling as many products as possible. And this model applies at all ends of the fashion spectrum, from luxury to fast fashion.
Continuing to produce this many garments, and then throwing them away, is beyond what finite planetary boundaries will allow. More than 70 percent of clothes still end up in a landfill. According to the Ellen MacArthur Foundation, “an estimated $500 billion value is lost every year due to clothing being barely worn and rarely recycled. If nothing changes, by 2050 the fashion industry will use up a quarter of the world’s carbon budget.”
How to Build a Responsible Fashion Business
They say it is during a crisis that our values are really tested. Over the past few months, scores of international fast fashion brands have cancelled orders and frozen payments to sub-contracted factories in India, Bangladesh and Vietnam, leaving millions of people destitute. Brands including Arcadia (Topshop), Gap, JC Penney, Primark and Urban Outfitters are being tracked by the Workers Rights Consortium, which says they have not committed to pay in full for orders completed and already in production.
The ensuing economic and social crisis is breaking open stark inequalities in the fashion system, one in which huge global corporations are placing the burden of a once-in-a-lifetime crisis on those who are least able to afford it. As the Financial Times’ Tim Harford argues, we must find solutions to “reduce emissions, restore natural ecosystems and sustain human flourishing and freedoms.”
Part of the answer may lie in what some business leaders call “stakeholder capitalism,” the idea that responsible businesses should serve the interests of a wider set of stakeholders. They invest in their employees, protect the environment and deal fairly and ethically with their suppliers.
The Business Roundtable of almost 200 CEOs of publicly-traded US companies recently redefined the purpose of a corporation. “Many Americans are struggling. Too often hard work is not rewarded, and not enough is being done for workers to adjust to the rapid pace of change in the economy. If companies fail to recognise that the success of our system is dependent on inclusive long-term growth, many will raise legitimate questions about the role of large employers in our society,” they wrote in a statement released last August.
Only one American fashion or retail executive, Macy’s Inc CEO Jeff Gennette, has signed on to the letter, but apparel companies like Patagonia have pioneered this approach in fashion, demonstrating that this stakeholder-focused model can work. Not only does it create economic value, it lowers costs, spurs innovation and drives employee engagement and retention.
I hope you enjoy our new BoF Professional special edition, Can Fashion Clean Up Its Act?, which in these unprecedented times, comes in place of our regular Spring print issue.
Over the coming month, follow our series of in-depth analyses, podcasts and digital events laying out the scale of the challenge ahead of us.
It will take visionary leadership, imagination and collaboration to create a more just, inclusive and sustainable fashion industry. This will require allocating investments even now, when budgets are tight. We also need effective government policy, alignment from fashion educators, concerted commitments and actions by fashion companies to address carbon impact and workers’ rights across the entire value chain, and a new lexicon for engaging with customers in an honest way that excites them about a more responsible fashion industry. Nothing will be easy or straightforward, but we need it now more than ever.
Imran Amed, Founder and Editor-in-Chief