We noted last year that pressure would continue to build on apparel retailers to display enhanced levels of environmental consciousness as we all emerge from the pandemic with a very different view of the world at large.
While the fashion industry is fully engaged with the 2015 Paris Agreement, actions to date still fall some way short of reaching the holistic goals set for global warming reduction. For this industry in particular, the market is growing as world populations increase and therefore the number of fashion consumers too. This demographic trend may not move the goalposts entirely, but it certainly makes the challenge at hand more complex to solve.
In simple terms, the Greenhouse Gas Protocol (GHG) has defined three areas of focus for companies when analyzing what can be addressed to reduce and offset their carbon footprints:
- Direct emissions from owned controlled sources
- Indirect emissions generated from purchased services
- All other indirect emissions that can occur in any place in the value chain (upstream or downstream)
Overlaying these scopes to the apparel industry, it is clear that positive progress in these areas will help retailers define clear and achievable objectives that synchronize with global targets fixed by the Fashion industry charter for Climate Actions (UNFCC). The feasibility of any proposed actions can only be fully understood through granular assessment, aiding prioritization and the effectiveness of the implementation plan that follows.
Here, we begin our own analysis of these GHG areas for emissions reduction by focusing on the actions for apparel retailers that can be taken closest to home.
1. Define a sourcing strategy that minimizes impact
Transforming sourcing protocols post-pandemic will tap into many of the trends that have emerged or accelerated due to COVID-19. The concept of nearshoring is not new, but the additional impetus of drastically reducing air miles and other transportation impacts in an industry that traditionally boasts rosters of suppliers across multiple continents cannot be ignored. The cost on a company’s books here is not just a financial one, which may have historically been the driver for supplier selection, and transparency in the supply chain can also be improved with closer geographical collaboration. A holistic review of suppliers can also reveal options for rationalization, bringing more marginal gains in CO2 reductions as aggregated transportation costs and emissions are brought down with a streamlined network of sourcing partners.
2. Improve the Product To Market process
Another CO2-intensive process in fashion is bringing a new product to market. Here, digitalizing the design and approval process between product design and supplier (for example, creating digital samples using 3D software platforms such as CLO) can make a huge difference. Collaboration is key, and consideration should be given to financially support suppliers’ investments in new digital tool adoption, or the software houses themselves.
Prior to this, more robust consumer insights can be garnered through mutualization of inventories and late-stage reassortment to maximize sell-through. Parts of new collections can be tested with consumers before making full supplier orders, reducing potential wastage and levels of unsold stock. And why not present discounted pre-order options on certain items if customers are prepared to wait a little longer?
3. Up the game on supplier monitoring and selection
The strongest supplier relationships proved to be priceless for fashion retailers during the crisis in 2020. While pivoting to a largely virtual trading environment presented an immense challenge, the security of materials supply to manufacture and honor orders helped businesses progress in such trying times.
Now, as the recalibrated retail world emerges from limbo in 2021, a sharp assessment of social and environmental responsibility needs to be undertaken in collaboration with supplier partners. There must be strict monitoring of compliance against a code of conduct, self-assessment of practices, training, plus the introduction of broader global sourcing principles by the procuring company that must countersigned by the supplier; for example, through the use of the Supplier Ethical Data Exchange, Sedex.
4. Make a shift to sustainable or organic materials
In the pursuit of greater confidence to proclaim brand authenticity and its associated sustainable virtues, specificity surrounding materials is critical. The expectation from consumers for recycled or organic materials to be used in production processes is growing and the implementation of this shift can bring carbon emission benefits for the manufacturing company too. Key challenges will involve securing supply, as availability is squeezed by market competitors seeking to travel the same path, while securing a level of quality that doesn’t compromise the end product is also key. Cost will, of course, play a significant factor where the provenance of such materials comes at a premium.
5. Lean into logistics
The emissions-reduction trail continues as products make their way to consumers, from the optimization of delivery packaging in terms of size and recyclability/reusability to the physical route to the end consumer in this accelerated age of ecommerce.
Companies should raise their capability to deliver to customers from the closest store location that is carrying the required stock. Enhancing flow management, delivery route optimization and low-emissions modes of transport for delivery are all prominent foundations to fundamentally rethink. Collaborative logistics with other businesses could also deliver more marginal CO2 gains.
Flexibility in return locations should also mirror the above options, while reverse recycling logistics for items such as carton waste all promote a more considerate and eco-friendly approach.
Click & Collect as an alternative option to delivery is now becoming table stakes too, incentivized as a “free” service. It is also one that will carry the additional brand experience and impulse purchase benefits in-store as brick and mortar opens fully once again.
6. Design a truly sustainable store
The physical fashion shopping experience will return and stores must also embrace and enhance the mission to reduce emissions. A host of energy management levers present themselves, from energy-efficient lightbulbs to standby mode for all appliances and overnight low-power activation, to more effective sewer maintenance or automatic water output control units.
Eco-friendly cleaning products in-store and longer-life staples such as garment hangers will all deliver a tangible window for consumers to see a brand’s efforts in practice, while digital challenges such as cloud storage space clean-ups and the use of sustainable search engines make further progress in the background, all contributing to the environmental success story that can be shared.