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Sustainability to Become 'Requirement of Doing Business' Says PVH Chief

Emanuel Chirico spoke exclusively to BoF as the Tommy Hilfiger and Calvin Klein owner outlined a suite of ambitious new social and environmental targets.
Zendaya and Tommy Hilfiger walk the runway of PVH-brand Tommy Hilfiger in March | Source: Getty Images
By
  • Sarah Kent

LONDON, United Kingdom — In fashion's competitive business environment, sustainability initiatives can be a tough sell, but the investment will pay off long-term, says PVH Corp.'s Chairman and Chief Executive Emanuel Chirico.

"Some of these initiatives start off being more expensive, and then as it becomes more of a requirement of doing business, it becomes more and more economic as you go forward," Chirico said in an exclusive interview with The Business of Fashion in which he highlighted growing consumer demand for better business practises.

In the meantime, those who are taking action must force greater transparency across the industry to prevent bad actors from getting away with ignoring sustainability in order to undercut competitors. “From a financial point of view, you don’t want somebody who’s quote-on-quote cheating, or cutting corners, to have a competitive advantage so they can sell goods for 10 percent lower than you can,” added Chirico.

The executive made the comments as PVH — which owns brands including Tommy Hilfiger and Calvin Klein — outlined a suite of ambitious new social and environmental targets Monday.

Among other things, the company committed to reduce emissions across its supply chain 30 percent by 2030. The goal — part of the company's commitment to the UN Fashion Charter for Climate Action — marks a significant change in the scope of the company's ambitions. Until recently, most brands' emissions targets focused only on their own operations, even though the bulk of the industry's emissions are caused further down the supply chain.

The company's new targets also have a strong focus on workers' rights. PVH is the only US company so far to join the Action, Collaboration, Transformation, or ACT, initiative. The coalition of nineteen major brands, including H&M Hennes & Mauritz AB and Inditex SA, and the IndustriALL Global Union, is pushing for industry-level living wage agreements in large manufacturing countries.

Living wages are “a real challenge, because that’s one that totally focuses on the bottom line,” Chirico said, noting that the company’s goals on this issue would probably be among the hardest to achieve.

Across the industry, pricing practises remain opaque, and intense competition has pushed many brands to relentlessly squeeze costs at the factory gate. Even though wages have improved in many manufacturing countries over the last decade, the fashion industry is still fuelled by the labour of millions of mostly young, female workers who are not paid enough to provide for themselves and their families.

PVH's new targets are part of a fresh wave of industry initiatives to tackle fashion's social and environmental impact amid growing awareness of the issue among consumers and regulators. According to BoF and McKinsey & Company's latest State of Fashion report, nine out of ten Generation Z consumers believe companies have a responsibility to address environment and social issues.

With its new goals, PVH is significantly stepping up its sustainability commitments, after setting its first emissions reduction targets just two years ago.

But it's still unclear whether the industry at large will adopt more sustainable business models. Last week, the Global Fashion Agenda and Boston Consulting Group noted that efforts to improve fashion's environmental and social impact are stalling, notwithstanding progress by major brands in recent years.

“These [goals] are ambitious, and some of them I’m sure we won’t hit exactly,” Chirico said. “Some of these initiatives are going to require not only our efforts and focus, but industry-wide change.”

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