Influential leaders, CEOs, presidents and public figures descended on Davos earlier this month for the World Economic Forum’s annual meeting after a three-year hiatus. The post-pandemic winter forum called on activists, civil society, businesses and academia to take urgent action on a range of interrelated issues including the global economic crisis, war, climate, human rights, income and gender inequality.
In roundtables and retreats held on and around the popular high street, I saw the clothing industry being reprimanded with hard-hitting information about the declining environmental and human rights practices and unhealthy consumption of cheap global products. south. Climate activists’ cries of greenwashing have drawn comparisons with billion-dollar companies like banks and financial institutions that have signed up to net-zero commitments but continue to invest heavily in fossil fuels.
Academics, NGO leaders and industry insiders weigh in on fashion’s impact on the environment – responsible for 4 percent of carbon emissions, 20 percent of global wastewater generation, 35 percent of microplastic pollution in the oceans from man-made microfibers, and 80 100 percent of the clothes are ground or burned. With only 2 percent of manufacturing workers earning a living wage, 98 percent of the 75 million people in global supply chains live in systemic poverty and exploitation.
The discussion was productive and focused on increasing the industry’s capacity to create net positive social and environmental impacts through collaboration, new business models, material innovation, policy controls and greater accountability.
Here are the top trends for apparel and retail industry executives to consider in the coming year:
‘De-progress’ is not an option: additional lines of protection are required.
Industry insiders and nonprofits lament that completely overhauling the fashion industry’s business model, reversing its explosive growth and changing consumer behavior toward disposable fashion, is simply unrealistic. Consumers have been described as addicted to aggressive marketing, cheap goods and addicted to trending fashion, with a growing middle class in emerging markets driving purchases and corporate shareholders continuing to demand strong year-on-year growth in line, which means Overproduction and overconsumption are enemies in the war against waste.
Industry stakeholders need to implement consumer protection and guidelines around deep discounting and seasonal sales – 10 out of 27 European countries have laws against predatory pricing. There have even been calls for new regulations on advertising – such as warnings from the tobacco industry – that describe the negative environmental and social impact of clothing and provide consumer advice on how to wash clothes to limit microfibre emissions, for example.
While circularity can slow growth, Gen Z’s returns are not sustainable
Speakers asked that a systems-thinking approach to fashion should decouple industrial development from the production of new raw materials so that materials can be reused and recycled. Fast fashion does not have a life cycle that can withstand more than two returns, so clothes end up in landfills. The seismic environmental impact among Gen-Z—about 50 percent of purchases and costing the industry $75 billion annually—requires rethinking the pre-purchase e-commerce experience. Retailers are focusing more on revenue management to increase margins, the main issue being more than improved product efficiency and volume, but also digitalization tools that enable brick-and-mortar imitations and help consumers see clothes tailored to them before they buy.
Permanence is ‘passing’, ‘rebirth’ has entered.
Sustainability strategies should move beyond harm reduction to regenerative and “nature-based” approaches, aligned with the UNSDG’s broader ecological focus. Scientists and environmentalists discussed ways beyond organic certification to focus on water and land for cotton production and regenerative farming methods that support biodiversity restoration. Corporate leaders are being asked to address the interconnectedness of crises: climate change, nature loss and social inequality.
Reducing focus on supply chains and ‘friend-shoring’
Chinese Vice Premier Liu said that his country is open to the world after three years of epidemic isolation, and emphasized international cooperation, economic stability and re-globalization. India and ASEAN were championing “buddy-shoring” at Davos, where market-oriented democracies have made the most positive progress in growth, manufacturing and digitalisation, and China’s shrinking and shrinking population. For the first time in decades, as well as threats to human rights. World Trade Organization chief Ngozi Okonjo-Iweala encouraged US importers to explore trade outside Asia and bring in Africa and South America to de-risk supply chains.
Retailers should support innovative startups despite the risks in their early stages
Current venture capital investors in the room insist that “the clock is running out” for innovation. Retailers and brands need to provide rapid corporate support to early-stage technology companies, from materials science for new eco-textiles to artificial intelligence for supply chain transparency and employee voice, to unlock large amounts of late-stage venture capital for growth. In the early stages of corporate adoption, despite the risks, startups cannot succeed in customer demand, feedback and product development. The real danger today is that as capital and the airport dry up, industrial innovation will be stifled in the long run.
As one young activist concluded at the forum, in a brave new world for the clothing industry, there are no bad choices for consumers, every purchase is a positive for the planet and the workers in the supply chain. Without a silver bullet to solve the environmental and social crises facing the industry, we must engage in collaboration and dialogue to move the industry forward and build a new industry playbook.
Jag Gill is a technology entrepreneur in supply chain and sustainability and CEO and co-founder of Vertru Technologies, a technology company using artificial intelligence to identify risks in blockchain and supply chain.