Corona Textiles, Fashion, Sports and Footwear

Fashion Industry and the Corona Crisis

In a global crisis, retailers across all sectors are forced to cut costs and shift priorities. That pressure can lead to sustainability initiatives being put on the backburner.

Environmental organisations and tech companies will be watching to see if matters like climate change and workers’ rights will continue to receive investment in the months ahead.

As the industry grinds to a halt, some analysts believe there’s opportunity for brands to not give up but to further reevaluate production processes to be more sustainable.

By conventional calculations, the odds that fashion will continue trying to reduce its environmental impacts in the face of the coronavirus pandemic seem bleak.

With revenue plummeting at every level of the supply chain, brands and suppliers might be forced to focus on paying bills rather than making investments.

Workers are being laid off, and it’s unclear if brands that have been exploring major changes to make their businesses more sustainable will put them on the backburner, whether to protect profits or to simply keep the lights on. 

“If wealth evaporates, if businesses have to do significant layoffs, concerns about sustainability will go by the wayside.

It’s something that we care about when we have the luxury to care about it — when basic needs are met,” says Sucharita Kodali, vice president and principal analyst at Forrester Research. 

But some industry experts think, cautiously, that the challenges of climate change, plastic pollution and workers’ well being are too urgent to ignore, and that sustainability efforts won’t be going anywhere.

Rather, this can be a moment of reevaluation and transition for the industry — and that transition, if handled right, can spell opportunity.

Whether or not the industry treats it as such will be determined in corporate offices — or executive-level Zoom meetings — in the weeks and months ahead.

Katrin Ley, managing director of the sustainability accelerator Fashion for Good, sees grounds for optimism, both for the adoption of better technologies and for the industry broadly to ramp up its sustainability efforts.

“The current situation provides an opportunity to reevaluate practices and may accelerate positive changes that have already been in motion,” she says.

Stacking up sustainability

Whether or not sustainable investments will be prioritised moving forward will likely hinge on one key question: whether public and industry opinion now categorise sustainability as a basic need. 

H&M would not comment on the future of its sustainability commitments, saying in an email, “All aspects of this extreme situation are now being carefully evaluated to be able to mitigate the negative effects.

However, it’s too early to say what impact this crisis will have on our business and the industry.”

Several other companies, including Burberry, PVH and Kering, declined to comment or did not respond to similar requests.

Technology startups that are tackling some of the industry’s biggest challenges, such as the ability to recycle fabrics, will be watching to see how the industry’s financial decision makers react, says Luke Haverhals, founder and CEO of Natural Fiber Welding, which recycles used cotton and improves the quality of low-grade cotton.

“Overall, interest remains high. What is a big unknown is whether or not those that control the money will retract,” he says.

Generating sufficient investment was a challenge before the current crisis, and the pandemic is not likely to help, given what Haverhals says is a scarcity of smart investors with deep industry knowledge and the passion to take on the largest problems.

“Most people in the headlines seem to be quite satisfied with recycling ocean plastic into fast fashion while ignoring microplastic pollution, emissions footprint, et cetera and then patting themselves on the back for all of the perceived ‘progress’.”

For Lewis Perkins, president of the Apparel Impact Institute, a good indicator of how serious a brand is about sustainability is who runs the efforts.

“The people running sustainability in businesses 10 to 15 years ago were coming out of marketing,” he says.

Marketing is an easier budget cut for companies, he adds, than work that is part of more transformative change in the supply chain.

“If your sustainability programmes are deeply entrenched into your core business, it’s less likely to go.” 

For Infinited Fiber Company and Tyton Biosciences, it’s also too early to tell what the long-term impacts will be.

Trials and testing continue, but the bigger commitments from brands are “in a bit of a holding pattern”, says Ann Sarimo, chief marketing officer at Infinited.

“There’s definitely caution when it comes to decisions related to more significant investments.

Brand partners with significant business in China are clearly assessing their next steps.”

Whether or not the brands proceed with trials and partnerships will signal where priorities lie, says Peter Majeranowski, Tyton president and co-founder.

“We are at the very beginning of a major test to see if sustainability really is as central an issue as many brands and groups claim.”

Shift in business models

Coronavirus has halted much of the industry, leading some analysts to believe retailers and brands could re-emerge after the pandemic with blank slates, allowing for some direction change.

“This global pause on everything may make the brands [that are doubling down on sustainability] even more desirable for people,” says Majeranowski.

“I’m hopeful that this will change behaviour and people’s views towards the environment but also how they live.”

If that holds true — or at the least, if the demand for sustainable products that was already growing doesn’t dissipate — then it could be more of a gamble to abandon their sustainability plans than to stick with them despite the related costs.

“For many pioneering brands, investments in sustainability and innovation are of high strategic importance and therefore budget cuts could negatively affect financial performance in the future,” says Ley.

It could also involve fundamental changes in what and how brands sell to customers.

“More people may realise we don’t need new fashion and apparel as much.

This movement had already begun, but the coronavirus may amplify it,” says Kate Larsen, a former Burberry executive and founder of social enterprise advisory SupplyEsChange.

She points to the rise of resale, and companies like Levi’s and Nudie Jeans that have been integrating repair into growing business models for years, and Burberry, which has always repaired its trench coats. (Whether health-related concerns growing out of the pandemic will impact the growth of rental and consignment remains to be seen.)

“This is a period of slowdown and reflection and of learning to live with less,” she says.

“Can fashion houses move on sustainability by stepping up to support the repair and share movements?”

The supply chain disruptions may also prompt brands to reevaluate their dependence on distant and global suppliers.

If brands restructure their supply chains as a result, that can be another opportunity for transformation.   

“The current crisis has shown a spotlight on the need for agility.

If companies are rethinking how and where they produce things, hopefully sustainability can be built into that,” says Sarah Willersdorf, managing director and partner at the Boston Consulting Group.

If bringing on more sustainable manufacturing partners, or helping a new supplier become more sustainable, cuts into margins, the payoff is that brands diversify their supply chain and reduce environmental impact in the process.

Supporting suppliers who want to improve their operations will be especially important as they deal with their own financial struggles resulting from Covid-19.

Mostafiz Uddin, owner of a denim factory in Bangladesh, says he was planning to install solar panels on his factory and make other changes to reduce his footprint.

“Now, forget it. Because of this coronavirus issue, now it’s a dream,” he says. 

The Bangladesh Garment Manufacturers and Exporters Association says many manufacturers have been working to reduce their impacts through things like solar panels and more efficient washing and dyeing machines, and hundreds of factories are registered for LEED green certification.

But the group’s president, Rubana Huq, is concerned for the future of those efforts.

“We are fearing that the world will slide back to cheap clothes with slashed discount tags, yet once again.” 

(So far, there’s been little indication that brands are willing to lend that support, and are instead leaving suppliers on the hook for cancelled orders.)

Restructuring could also involve reshoring some aspects of brands’ production, an attractive way for them to eliminate or reduce vulnerabilities inherent in relying on a disparate supply chain.

US-based apparel brand American Giant and footwear brand Tidal New York, for example, source materials and manufacture in the US, and have not felt the impacts from the coronavirus that other brands have experienced.

Tidal has enough inventory to get through over a month of production and has been relatively insulated from coronavirus impacts so far — and if they do face disruptions, co-founder Tim Gibb says the company is positioned to get operations back up to speed in a matter of days.

Reshoring may also reduce carbon emissions and other environmental impacts.

A lifecycle analysis in 2016 showed that regional supply chains — along with the use of better agricultural practices that can restore soil health and increase carbon storage potential — are crucial to reversing the carbon footprint of clothing.

“It would be really exciting to see brands diversify their supply chains and consider working within their bioregion,” says Jess Daniels, communications director for the California nonprofit Fibershed, which promotes regional textile systems.

“I never want to step into disaster capitalism, but I do wonder if the economic impacts of coronavirus will help more people see the importance of strengthening the resources in our home community.”

Fibershed advocates for closer relationships between brands and suppliers, which a number of sustainability and labour advocates agree are important.

Brands may be able to preempt disruption if suppliers can tell them about emerging challenges before they become severe; and by knowing their suppliers better, they can engage more on sustainability measures and have more details to share with their consumers. 

“Brands that have invested in building relationships with their suppliers across their supply chain will have better insight into the impacts for their own business and will, therefore, be best able to weather the shocks brought on by coronavirus,” says Maxine Bédat, founder and director of the nonprofit New Standard Institute.

Gary Cook, global climate campaigns director for the environmental advocacy group, would like to see brands use their leverage to help partners and suppliers reduce their carbon footprints, or to work with governments in manufacturing countries to implement more stringent environmental standards or incentives. 

Cook doesn’t think the current crisis will ultimately hurt the industry’s efforts on sustainability.

The real question is whether the efforts were enough to begin with. “I’m just as concerned as I was before,” says Cook. “If brands were serious about their commitments, this shouldn’t throw them off course.”


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Will Covid-19 disrupt fashion’s sustainability commitments?

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