http://www.environmentalleader.com/2014/10/06/assessing-the-environmental-impact-of-the-fashion-world/
White Papers
Assessing the Environmental Impact of the Fashion World
For
the third year, more than a thousand decision makers and thought
leaders from 34 countries gathered for the Copenhagen Fashion Summit.
From governments and global brands to princesses and pioneers, each
attendee had one thing in common: the vision of a sustainable future for
fashion.
Meanwhile, Sustainable Fashion Academy’s Global Leadership Award in Sustainable Apparel (GLASA),
founded to inspire courageous leadership in the fashion industry, met
to discuss natural capital accounting and incubate ideas we will use to
tackle the challenges facing our planet.
One of these ideas is the potential of
natural capital accounting to help the apparel sector accelerate its
environmental impact reduction.
Few sectors are more emblematic of today’s
consumer-driven growth model than the fashion industry. Ever more
frequent overhauls of fashion ranges, psychological inducements to
promote impulse buying, consumers who see shopping as their primary
leisure activity, and of course – low prices.
The world’s resources cannot keep up with our
increasing demand for throw-away fashion. Cotton, for example, a key
input to the apparel industry, is responsible for 2.6 per cent of the
global water use. However, a gap already exists between water supply and
demand. If we do nothing to correct this imbalance, by 2030 demand for water will exceed supply by 40%.
Furthermore, an estimated 17 to 20% of
industrial water pollution comes from textile dyeing and treatment and
an estimated 8,000 synthetic chemicals are used throughout the world to
turn raw materials into textiles, many of which will be released into
freshwater sources. And it is not only the production of raw material
that is water-intensive, the wet processing of clothing, such as
washing and dyeing, also consumes huge amounts of water.
The apparel sector presents a significant
opportunity for the adoption of natural capital accounting. Image and
brand value is everything, making companies highly sensitive to
reputational risk due to NGO campaigns and regulatory pressure. More
positively, fashion often serves as an extension of personal values. So
companies are well-placed to shape more sustainable consumer behaviour.
Natural capital is the environmental
resources from which we make goods and services. It includes minerals,
land and forests, as well as services such as a stable climate and clean
air that sustain our ecosystem.
These natural goods and services are often
freely provided to business and society by a healthy planet and the
result is that our natural capital is being used at an unsustainable
rate and being damaged. Climate change is the leading example. Manmade
carbon emissions are damaging the planet’s ability to maintain a stable
climate, resulting in global warming, rising sea levels and extreme
weather. The over-abstraction of water resources by agriculture and
industry, as well as rising populations, is also critical.
Natural capital accounting puts a monetary
figure on environmental resources so that its value can be recognized.
Companies, governments and investors can start to take environmental
externalities into account in everyday decision making and compare these
to other impacts using a common metric.
The merits of natural capital accounting were debated, from the practical (what will it take for natural capital accounting to become embedded in the everyday financial decision making of companies?) to the philosophical (could
applying a monetary metric to sustainability issues exacerbate
capitalist attitudes? might pricing negative impacts imply that
corporations can ‘buy off’ the environmental damage they cause?)
But the world’s increasingly urgent
environmental problems means we do not have time to wait. Richard
Mattison, chief executive of natural capital analysts Trucost said: “We
face a tipping point. The huge increase in middle class consumers across
Asia is creating both an opportunity and a problem for traditional
business models. Asia is viewed as a growth market with huge increases
in demand but traditional forms of production come with a rising
environmental cost that is unsustainable and unacceptable. For example,
demand for water is predicted to exceed supply by 40% over the coming
10-15 years. Business as usual is broken. We need to revolutionise our
approach to design and production, decoupling growth from environmental
impact. The time to do that is now.”
Trucost has been working with the Sustainable
Fashion Academy to develop the apparel sector’s thinking on natural
capital. This resulted in a white paper which
was launched in Copenhagen. It makes a series of recommendations on how
to build on existing initiatives and accelerate uptake.
It’s people who make the clothes that we wear
When the Rana Plaza factory collapsed in the
Bangladesh capital last year more than 1000 garment workers were killed,
twice as many were injured and 800 children were orphaned.
Sixty million people globally work in the
fashion industry, yet somewhere along the line – we seem to have
forgotten that the clothes we buy are made by people. Livia Firth, owner
of Eco Age, said, “It’s a case of out of sight, out of mind. We cannot
keep eating from this big, cheap fashion pile without thinking about who
made our clothes.”
Sadly, Rana Plaza is not the only example of
wide-scale factory deaths, nor the only example of social inequality
along the value chain. Negative social impacts occur at every stage,
from the farmers who grow the cotton, to those who stitch the logos. For
making a $100 pair of trainers, the factory worker will receive just 50
cents. If you buy a pair of jeans for £15 – what do you really expect
the working conditions will be like for those that made them?
Inspiring efforts to put social capital back
on the map ranged from enterprise brands to SMEs. A GLASA nominee ‘Pants
to Poverty’ were not content with measuring profit alone – so went one
step further by combining social capital accounting with business
accounts, creating an integrated 3D Profit and Loss statement – a full
picture of the business’ impact on people, profit and planet. Ben
Ramsden, founder of Pants to Poverty and Pi Foundation said “It is our
hope to launch this process and support its emergence as a new standard
for corporate reporting. The economic analysis for our 3D P&L was
done by our project partners Trucost and GIST Advisory, world leaders in
business impact valuations. Together, we are proving that not only is
this possible but that business is better in 3D.”
Thirsty crops – why shareholders are finally putting sustainability on the agenda
Fortunately eco-warriors and sustainability
managers were not alone in Copenhagen, other attendees included
investors, many of whom, are finally pushing sustainability to the top
of the corporate agenda. Why? Because nature is biting back.
In 2011, drought struck Texas, forcing
farmers to abandon millions of acres of cotton and corn. The price tag –
$5.2 billion in losses. China’s 2010 drought resulted in knock-on price
increases of cotton of 150%. H&M was one of the many companies
affected, announcing a 30% drop in profits, after deciding to
internalise the inflation. Perhaps it is unsurprising then, that
investors are pushing companies to take a strategic approach to water
risk and uncover the true cost of their natural capital dependencies.
Cotton – an essential global commodity and
the largest single source of fibre for global apparel – is used by
nearly every person on the planet on a daily basis. For millions of
people in some of the world’s poorest countries, cotton is also a vital
link to the global economy.
However, it is associated with significant
natural capital dependency, heavily reliant on water for irrigation,
land requirements, and chemicals which can result in pollution to land,
water and air. The most material impact of cotton farming is water
consumption, with $83 billion natural capital costs globally.
Over 53% of cotton fields in the world
require irrigation, and the majority are in regions where water is
scarce. The impacts on the Aral Sea, Central Asia are a notorious
example: in the period 1960-2000, the Aral Sea lost approximately 70% of
its volume as a result of diverting water to grow cotton in the desert.
See table below for cotton’s water use by region.
It is therefore unsurprising that the sector
has particularly felt the effects of natural capital-related issues,
such as increasingly volatile prices of materials like cotton, due to
droughts and floods, in the form of top and bottom line impacts.
Activities already undertaken in the sector
such as the Better Cotton Initiative have begun to work with farmers to
improve cotton farming through better management, organic practices,
responsible agrochemical use and other techniques. There is enormous
opportunity for improving yields, quality and profitability for farmers
while reducing environmental impacts. The benefits of better risk
management thus manifest themselves in a range of positive environmental
and societal shifts. For example, a field study in India showed that
application of improved practices resulted in agrochemical reductions of
81%, water reduction of 49%, chemical fertiliser reduction of 18% and a
15% increase in farmer profitability.
Businesses that will stand the test of time
will be those who understand the importance of a strategy which takes
into account natural capital at its true cost. If they won’t do it for
the planet – then let’s hope they’ll do it for the profit. As with
increasing stakeholder pressure for ‘better’ cotton – that will be good
news for investors, farmers, brands and of course, nature.
Clothing the Loop – Wasted Wardrobes
One of the most resource-intensive industries
in the world, the $1.2 trillion global textile and apparel industry is
built on complex linear supply chains. Lack of visibility over what’s
happening further down that chain has often resulted in toxic pollution,
unethical labour practices and escalating waste, with the rise of ‘fast
fashion’ sending materials hurtling towards end-of-life quicker than
ever. In the U.S. the average person discards 32kg of clothing annually.
The Agency estimates 85% of these wind-up in landfills or incinerators,
and that’s just America. Sadly, the story around the rest of the world
isn’t much different.
China’s textile industry processed 41.3
million tonnes of fibre and accounted for 53% of the world’s total
production. Millions of tonnes of unused fabric at Chinese mills go to
waste each year when dyed the wrong colour. In 2010, 234 tonnes of
textiles went into landfill in Hong Kong alone. Meanwhile, customers in
the U.K. have an estimated $46.7 billion worth of unworn clothes
lingering in their closets.
Educating Consumers & Designers
It is shocking facts like these that brought
closed-loop-textiles to the tip of everyone’s tongue in Copenhagen.
Helena Helmersson, Head of Sustainability at H&M, spoke about their
eco-efforts, including their new in-store garment collection programme
which gathered 5,000 tonnes of used clothes last year. Meanwhile,
Vanessa Friedman, chief fashion critic of the New York Times had another
serious criticism to make. Fashion, by nature, is about this season,
it’s about the latest – out with the old, in with the new; new cuts, new
colours, new fabrics, not only every season but every month. “Designers
are effectively running on a creative treadmill that is unsustainable”.
Vanessa harked back to the days of her Nan, who bought a couple of key
items of quality clothing and loved them for life. This, is what we
should be doing today – building a timeless wardrobe which doesn’t need
monthly revamps just because Vogue says so.
Further Down the Chain
Dutch aWEARness, creates clothes from 100%
recyclable polyester. It uses 95% less water & 64% less energy
during production than standard cotton
One company that has mastered the intricacies
of textile recycling is London-based LMB. The company has found a
goldmine in Britons’ annual one million tonne apparel disposal, and
either recycles or finds an alternative use for everything from saris to
flares. Over in the Netherlands, Dutch aWEARness, creates clothes from
100% recyclable polyester. It uses 95% less water, 64% less energy and
produces 73% fewer carbon emissions during production than standard
cotton. Once the products reach end-of-life, they are transformed back
into new clothing, with no loss of quality.
We’re not there yet, but with product
innovation, consumer education, pioneering brands and a little attention
to the supply chain we might just begin to see less clothes travel from
cradle to grave and many reincarnated time and time again.
Jacqueline Jackson is an account director
who joined Trucost in 2014. She is responsible for managing corporate
client relationships and business development, specializing in
technology, telecommunications, media and retail. She has extensive
experience of working with public and private organizations to assist
with business strategy and delivery. In 2011 she founded an e-Commerce
site, providing designers who up-cycle the portal to promote sustainable
fashion and arts to a global market. Jacqueline has an MFA in Fine Art
from the University of Oxford. This article was republished with permission from Trucost.
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