By Jessica Zand
Valued at $3 trillion, the textile industry plays a significant role in the global economy, accounting for 2% of global gross domestic product. However, industry growth has been offset by the ways through which clothing is designed, produced, and consumed—non-renewable resources are used to produce clothes that are made cheaply and disposed of quickly. Overconsumption of cheaply produced clothing and underlying environmentally unsustainable practices have led to more than $500 billion in annual losses.
Within the fashion industry, fast fashion is notorious for its negative impact on the environment, exploiting consumer desire for instant gratification. Fast fashion companies depend on rapid cycles of production and distribution to transport clothes from the design stage to retail channels in a matter of weeks. This process differs from the “slow fashion production process,” which takes up to nine months to finalize product ideas. In addition to highly responsive supply chains, fast fashion firms also have low replenishment rates. More specifically, with consumers valuing high differentiability, it is critical for fast fashion firms to eliminate the need to replace distinct items that run out of stock in retail. Increasingly fast cycles of prototyping, larger quantities of poor-quality garments, and widening assortments of designs are the norm in the fast fashion industry.
On the production side, in a little over a decade the number of fashion seasons has increased from two per year (Spring/Summer and Fall/Winter) to 50 to 100 micro seasons, drastically increasing air, water, and land pollution. Forbes projects the fashion industry to be responsible for approximately 10% of global CO2 emissions, 20% of industrial wastewater, 11% of pesticides, and 24% of insecticides.
To create high levels of throughput in response to consumer demand, textile production relies on 98 million tons of non-renewable resources every year. The depletable resources utilized include oil for synthetic fiber production, fertilizer for cotton growth, and chemicals to dye and finish fibers. Clothing manufacturing also entails the use of around 93 billion cubic meters of water annually.
By employing fast manufacturing time scales and providing inexpensive clothing, the fast fashion industry encourages a mentality of disposability among its consumers. Clothing is treated as replaceable commodities, fueling revenues and landfill growth. The United Nations Economic Commission for Europe estimates that the average consumer purchases 60% more clothing than they did 20 years ago, but only wears each garment for half as long before disposal. With fashion trends changing daily, it has become increasingly difficult to wear items for longer periods of time, especially when new items are cheap.
The appeal of trendy clothes creates a pressure on retailers and manufacturers to provide apparel more frequently, fabricating a dangerous cycle of continuously increasing consumption and production. In the process, the environment is exploited, placing pressure on natural resources. At the current rate of manufacturing and clothing utilization, the textile industry alone could use up more than 25% of the carbon emissions budget set by the Intergovernmental Panel on Climate Change (IPCC) for all industrial emissions.
Outsourcing also enables faster production timelines and greater volumes. Many fast fashion brands outsource manufacturing, breaking down traditional creative design processes into a more collective, less-centralized process spanning several countries. This shift has placed design decisions in the hands of manufacturers. In Turkey, for example, Zara factories also have innovation responsibilities. After fabrics are produced, manufacturers interpret and produce creative designs. Traveling representatives from Europe or the United States provide feedback on these prototypes, which are then finalized and produced. Sustainable fashion brands do not bundle up design decisions and manufacturing; for example, Everlane designs all clothing in California before manufacturing begins in Spain, Italy, and eastern China. This system allows factories to focus solely on production, generating garments of higher quality.
Some companies within the industry are making an effort to change. In 2017, H&M factories were revealed to emit major pollutants from viscose, a chemical-heavy and highly volatile substitute to cotton and polyester. Viscose is a low-cost alternative to silk and is largely responsible for the pollution of China’s largest freshwater lake, Poyang Lake. H&M’s response to public backlash regarding toxic chemical use came in 2018, with a sustainability report that spoke of environmental awareness. The company strives to become “climate positive” by 2040, meaning that H&M wants their production process to eliminate more greenhouse gasses than it emits. H&M hopes to achieve this goal through a more “circular and renewable science-based approach,” and has undergone dramatic operations changes in recent years. The percent of recycled, sourced cotton (certified organic) has increased by 61%, and garments gathered through its collection initiative has increased by 8,308 tons.
In addition to general concern for environmental ethics, it is vital for today’s fashion markets to switch to more environmentally sustainable business models to maintain profits. By 2030, companies could see a decrease in earnings of more than 3%, a loss of $52 billion for the overall industry. A key driver of this decline will be negative effects on brand reputations due to environmental footprints. Non-governmental organizations such as Greenpeace and Fashion Revolution continue to expose the detrimental environmental impacts of fast fashion production. It is estimated that the industry could grow by an additional $192 billion by 2030 if more firms successfully take on environmentally friendly initiatives. By switching to a sustainable textile enterprise, all constituents can benefit.
Profitability and environmental sustainability are not mutually exclusive. When companies use recycled materials, they cut costs and reduce engagement with resource price volatility. Recycled materials are cheaper and could lessen the $100 billion annual loss due to landfill incineration processes. Patagonia—a popular outdoor clothing brand—uses soda bottles, manufacturing waste, and secondhand garments to produce new clothing, generating $400 million in annual revenues. Patagonia’s investments in reusable materials allows the firm to reap the dual benefits of consumer trust and higher margins.
The business benefits of a circular economy are becoming more accepted as companies rethink traditional supply chains. The 2015 Nielsen Global Sustainability Report revealed that brands that demonstrated commitment to sustainable practices increased profits by 3%. With growing climate change awareness, a greater number of consumers are willing to pay more for sustainable clothing.
A company that remains unresponsive to the global climate change discussion remains blind to a real business threat. A 2018 report by the Shelton Group found that 86% of consumers support corporate activism and want companies to address social issues. In Singapore and Malaysia, growing attention to environmental issues has led to a decline in fast fashion demand. H&M’s first-quarter report for 2018 revealed a 1% and 10% drop in sales for Malaysia and Singapore, respectively.
A popular argument against sustainable fashion involves price. Low-income consumers often cannot afford the higher prices that come with sustainably produced clothing, which utilize ethical manufacturing practices and higher wages. Scaling up short-term clothing rentals, such as subscription clothing, is a promising business opportunity that addresses issues of affordability. Successful examples already exist: in the United States, Rent the Runway draws in more than $800 million in retail value per year, and Houdini Sportswear offers customers second-hand sportswear for 25% off the retail price. By introducing more rental systems to the market, businesses can draw in more profits.
Globally, businesses cannot afford to continue to design and manufacture clothing in environmentally hazardous ways. It is essential for more fashion companies to adopt sustainable practices and disrupt the current linear pathway of production, which offers negative value.