Fashion Industry Health Check | Closing The Loop



Let’s look at the facts.

The global population isn’t getting any smaller. In fact, it is predicted to rise to 8.5 billion by 2030 according to the United Nations.

Clothing is a necessary staple. For many, it is now more – having evolved into a status symbol of who you are and what you represent. Today, it is not unusual to update that symbol monthly, weekly or even daily.

To date, the current apparel consumption sits at 62 million tons. Already, we are producing more product than the earth can absorb. This pressure will only increase.

Take into account the population growth and by 2030 the overall consumption of apparel could jump by 63 percent to 102 million tons.

Brands in the fashion industry thrive on this growth, but it is at risk if “business as usual” continues.

If, for example, every company continues to sell cheap cotton tees at an increasing rate, resources will diminish and drive up costs. The environment and livelihoods of suppliers will erode, yields will fall and manufacturers will begin face a never-ending chain of setbacks.

What does that mean for the health of our global community?



Pulse of the fashion industry.

This year Boston Consulting Group (BCG) and Global Fashion Agenda (GFA) released a report that assesses the current state of the global fashion industry in relation to sustainability.

The report, Pulse of the Fashion Industry, exposes the overall health of the fashion industry while presenting various challenges for companies that ultimately threatens industry growth.

Looking beyond the standard production and consumption figures, the report assesses how sustainable the industry is based on environmental, social and ethical costs.

The conclusion is that the industry is in a weak state, scoring a mere 32 out of 100 with the end-of-use phase needing the most help.

Still running on a linear fashion model, most brands have not yet realized the potential that is being lost at the end of the value chain. Alone, 4 billion euros could be saved if today’s garment collection can be tripled to reach 60% by 2030.

For this to happen, consumer use and education are important to consider as the life of the garment does not end once it has left the hands of the business. A collective push will be needed.

“In the past decade, the number of garments purchased per consumer has more than doubled, and some consumers throw them out after only a couple of wears.”  Global Fashion Agenda & The Boston Consulting Group


The economic reality.

The fact is that people will still need to be clothed. The population is increasing and the earth cannot provide more than what physically exists. At a certain point the economic returns will begin to decrease and all that will remain is what’s left over from a linear production cycle – waste – if nothing is done.

Economic growth along with social and environmental responsibility are not opposing ideas. Although the report may have concluded that the industry is operating at a very weak level, the industry also has an opportunity to address the social and environmental issues at hand. That could even mean generating an additional 160 billion euros in annual value.

That could even mean generating an additional 160 billion euros in annual value.

One of the key solutions being looked at is shifting the linear production cycle to a closed loop production. However, for this to be effective, everyone from the investors to the production to the consumers will need to be on board.


Consumer education.

The answer to the waste reduction, is not solely shifting responsibility on to consumers. If companies continue to rely on consumer demand, a habit ignited with the marketing era, the industry will struggle to improve. Brands convinced people that they need to be “on trend” and it is therefore the brands who will need to convince people to shop mindfully. It will be up to the brands, as leaders, to shift the norm.

Rather than turning away, businesses have the chance to build even greater loyalty from their customers. Incentives to return or repair used clothing, for example, will draw customers back. By providing a solution with a reward, customers will not only continue to return, but they will develop more conscious habits around garment care and disposal.


The labels as leaders.

An industry-wide collective push will be needed.

In addition to education around end-use, there is also an incredible challenge for the fashion industry to orchestrate change within the complex web of global production and supply chains. Highly fragmented, collaboration will be essential.

With public companies more likely to follow shareholders’ expectations for short-term value maximization, it will require incredible leadership and support from top executives and investors. Mentalities will need to shift.

While it is easier for independent and family-owned brands to take leadership in change, there are still not enough doing so. In fact, the report found that the small to medium sized brands as a whole are less sustainable than corporate giants.


The challenge.

Even when their intent is good, smaller brands tend to lack the network and resources to make any significant improvement on their footprint. Unless they are working with local suppliers, they have access to little transparency along their supply chains.

The industry is in need of new insights that help solve such complex problems and to truly close the loop, both the technology and the economics of recycling need to improve dramatically. More high-quality data revealing a measurable scale of environmental impact of fashion products needs to be made available to everyone. Without measurements, it will remain a challenge to accurately assess true impact and where the focus needs to be.

A standard needs to be identified to help with reaching a commercial scale that will bring financial viability. It will require technological disruption, industry-wide collaboration and a willingness to invest for change to happen.

It will require technological disruption, industry-wide collaboration and a willingness to invest for change to happen.

For now, businesses need to learn from the case studies available. They need to be willing to act as disruptors of an old-school production cycle for the health of their bottom line as well as the ecosystem that supports their success.

For more facts and figures on the current state of the global fashion industry, read Pulse of the Fashion Industry. Also, keep an eye out for a follow-up industry fibre report due to release in autumn 2017.