This white paper provides a systemic review of the many factors that influence the sustainability of the fashion industry, providing a holistic appraisal of the textiles and garment value chain.
The paper was prepared by Peter Kramers, a non-executive director, investor and retail executive with over 30 years’ of diversified sector experience. Believing in a sustainable fashion future and firmly of the view that the consumer model must change, has made him an advocate for fashion innovation, calling for the sector to be re-invented re-imagined and re-invested in to make it more sustainable. Peter believes we can all do more to balance people and planet with profit which motivated him to join the Green Angels Syndicate.
Fashion is a ‘dirty’ industry. The appetite to change is here and we are witnessing innovation at every level of the value chain. The time to invest is now to help the industry achieve scale whilst driving a circular sustainable future.
Peter Kramers
Executive Summary
This paper provides a systemic review of the many factors that influence the sustainability of the fashion industry, providing a holistic appraisal of the textiles and garment value chain.
Each of the containing systems is reviewed, identifying the high-level constraints and sustainability impacts. The review is supported by examples of businesses that are ‘bucking the trend’, providing a level of sustainability to that system.
The results of the review highlight opportunity in every containing system, inferring that if a concerted effort is made to invest in the industry, immense value can be released.
It argues that the most value can be released in the first and last phases of the value chain, which are Raw Materials and End of Use.
This paper does not explore the complex nature of each individual investment, nor does it identify specific companies to invest in, it does however highlight the nature of the innovation and the sustainability consideration.
1 – Industry Context
Fashion and sustainability is in itself an oxymoron! Fashion speaks to the notion that an item, colour or fabric is transient, it has relevance in a particular time period, while sustainability, in this context, talks to longevity. However, both concepts need to be adopted together to provide a future fit platform for an ever-increasing population, projected to increase to 8.5 billion with overall apparel consumption predicted to rise from 62 million tons today, to 102 million tons in 2030[1].
We must be clothed, therefore, it can be argued that we can’t do without ‘fashion’. Any fabric made into a product to be worn can be considered to be ‘fashion’ – be it apparel or footwear. Unfortunately, the fashion industry is very wasteful, with an estimated 92 million tons of waste created annually .[2]
Human beings have a cultural and emotional connection to apparel, we need to feel and look good, ‘dressing for success’ and ‘looking the part’ are all meaningful parts of our culture, identity and psychology. Yet, our consumption model must change, less needs to become more. The ‘less’ that gets manufactured must support greater levels of care for society and the environment. The industry needs to evolve and become less wasteful and less damaging to the natural environment.
According to the Quantis report, apparel and footwear account for an estimated 8.1% of Global Climate Impacts (3,990 million metric tons of CO2 equivalent)[3]. Using 2016 data as a baseline, the report states that between 2005 and 2016, the apparel industry’s impacts on global climate change increased by 35%, and they go on to project 49% increase into 2030.
This indicates that the current model is not sustainable. An industry generating more carbon than the aviation and shipping industries combined[4] needs to be re-invented, re-imagined and re-invested.
2 – The Fashion Garment Value Chain
The current linear nature of the apparel value chain, characterised by a reliance on grown/mined virgin materials, wasteful manufacturing processes and the end of life ‘throw away culture’ is unsustainable.
However, where there are wasteful practices, there are also opportunities. With a ‘$2 trillion market size, the fashion industry is one of the world’s major manufacturing sectors, offering vast opportunities for positive disruption’[5]. This disruption can and will take place at every level of the value chain.
With reference to apparel, it can be broken down into five distinct stages, namely raw materials and processing (both making up the textiles industry), followed by cut make and trim; retail/use and finally, end of use, these being the garment and fashion industry.
Each of these stages represents varying degrees of opportunity, for example, 50% of the fashion industry’s’ environmental footprint lies in the raw materials stage [6] with other major contributors being the cut make and trim and end of life stages. These areas therefore require the most urgent innovation and initiative funding.
By addressing social issues and leveraging more efficient use of scarce resources, there is a collective opportunity of €160 billion per year[7]. More importantly, there is an opportunity to build a future-facing industry ‘fit’ for purpose and ‘fit’ for future generations.
2.1 – The Textiles Value Chain
This part of the value chain has a disproportionately large impact on sustainability which is primarily driven through the base materials’ recyclability, it can also be closely linked to land, chemical, water and energy usage.
2.1.1 – Raw Materials
Recognising the role cotton and other cellulosic fibres play in deforestation, habitat and biodiversity loss, as well as its part in creating water scarcity and chemical leaching into the soil, is an important change motivator.
Driving a more sustainable model requires industry to find new sources of raw materials. These need to carry a lower environmental impact, innovations in natural waste product retrieval and new super fibre creation is critical.
Crops that are organically grown for example, reduce the need for fertilisers and pesticides. Research suggests that non-organic cotton is responsible for 16% of insecticide use, producing 220 million tons of carbon emissions.[8] Note that organic cotton is not the panacea though, the production of 1kg of organic cotton requires 3,800 litres of water.
Three others commonly used fibres in the industry include polyester, acrylic and nylon (synthetics). These fibres carry a far lower initial environmental impact than cotton, as the water, land and pesticide requirement is substantially lower. However, they rely on fossil fuel extraction and the bulk of these fibres are not biodegradable. A further drawback relates to the continual release of microfibres into the environment with recent estimates noting that half a million tonnes of microfibres are released into the environment per year[9], nullifying its initial benefits.
New and environmentally friendly sources of raw materials for the garment and fashion industry are critically needed. Ideally these raw materials should be natural fibres, created from waste products which are derived from another industry. Some such examples include: orange fibre (a by-product of the orange juice industry); seaweed fibres or Hydrogel, (a fibre consisting of 98% water, 2% silica and cellulose which is 100% biodegradable and the water used in its production can be recaptured through evaporation). Another alternative includes a fabric made of pineapple leaves, which are harvested post pineapple crop harvest.
Animal free leathers such as Fine Mycelium™ (produced by Reishi™) provides a more environmentally sustainable leather. The vegan leather market is estimated to be worth $89.6 billion by 2025, with an estimated growth rate of 49.9%[10].
The examples referred to above are in no way exhaustive and many more such examples can be cited. However, investing in these new materials is critical to reduce the reliance on resource rich fibres. Critical mass in production needs to be achieved and this can only come about through R&D and by ongoing financial support.
However, with 87% of material used in clothing ending up in landfill or being incinerated[11], even new age virgin raw material production is not the only sustainable solution. While virgin raw material production is a step in the right direction and requires innovative ideas and investment, recycling remains a critical link and input requirement. This will be addressed in more detail at the end of life stage.
2.1.2 – Processing
Within this context, processing includes spinning, dyeing, weaving and finishing. These stages are heavily affected by the design brief itself. In general, the greater the processing work required, the greater the carbon impact.
Investment opportunities can be found in chemical and technological advances, such as (amongst others) energy reduction, enzyme usage, waterless dyeing technology, the use of UV/laser light or ultrasonic to finish fabric.
During this stage, designers need to start with the end of life plan and being clear on the recyclability of the fabric blend ‘fibre recipe’. The greater the fibre complexity, the more difficult it is to recycle, the mantra that must therefore be applied, is to ‘design out waste’.
Traditional dyeing and finishing processes require high water and energy usage. Textiles dyeing globally is attributed to 20% of industrial water waste[12], in many cases due to the heavy minerals used. Processes such as sand blasting and stone-washing to soften fabric are often detrimental to the environment. Understanding these problems leads to innovation and investment opportunities that will drive future sustainability.
Current examples of successful and sustainable investment in businesses include Archroma which has advanced a waterless denim dying process. An average pair of denims requires 2,900 litres of water to be produced, with companies like ETICA already reducing their water usage by 90%.
The Dutch firm DyeCoo have created technology that uses recaptured CO2 in a closed loop system to dye fabrics and no water is used. Green Theme Technologies created a waterless bonding process to produce an anti-stain, water repellent fabric.
There have also been many positive developments in vegetable dyeing processes. Nature Coatings converts wood waste into a black dye, containing 90-100% less Polyaromatic Hydrocarbons than traditional petroleum based black dyes.
While the above-mentioned examples reference the garment and fashion industry, it must be noted that positive sustainability investment affects not only this industry, but any industry that uses fibres to create a fabric (textiles industry), including businesses such as furniture, the car and carpeting industries.
2.2 – Clothing/Fashion Value Chain
Considering that at these stages of the value chain, most input materials are ‘constructed, manufactured or available’, it follows that the sustainability of the garment produced and the subsequent carbon footprint is dependent on the design, the values/ethics in the organisation as well as the behaviours of the end user.
2.2.1 – Cut Make and Trim (CMT)
Ethical practices and social responsibility in relation to workers’ rights, working conditions, etc. are critical considerations in all stages, however this stage has the highest employment numbers and therefore heightened awareness is even more important.
Other considerations include the significant energy requirement. A large percentage of clothing production takes place in the Southern and Eastern nations, which are generally highly reliant on coal and other pollutant energy mixes and in many instances, machinery used may be energy inefficient.
Governments and leading industry bodies need to play a far greater role in driving labour acts, worker rights and manufacturing policies in order to promote ethical and sustainable practices. Investment opportunities are slanted towards reducing wastage in material, time or energy.
Talking of waste reduction, designers need to begin with the end in mind, since[13] ‘‘the design stage of a product determines 80% of its environmental impact’’. All trims need to be removable; glues, fasteners, seam taping and so on need to be responsibly sourced and sustainable, thereby opening up potential investment opportunities in other supporting avenues of business.
Some ‘soft tech’ investments could include applications that reduce pre-consumer waste (fabric offcuts). Various articles and reports have the percentage waste of original fabric produced at between 10-25%. Designing the cutting pattern to fit the flat fabric dimensions would enable a more efficient cutting matrix, thereby reducing the grade and the waste created.
Companies like Reverse Resources have created a platform for factories to share offcut fabric information with fashion brands, which enables upcycling. Individuals like Stephanie Benedetto and her colleagues at Queen of Raw are creating a market for the waste, by buying and selling unused fabric, making it quickly available online and saving an estimated 3,200 litres of water for every meter of fabric. Other more ‘hard tech’ investments include recycling of the fabric waste which will be addressed later in this paper.
While it is acknowledged that more energy efficient approaches to manufacturing processes, packaging, and ‘localisation’ (reducing the associated waste generated in the transportation and storage of finished goods) must be advanced, these considerations are not addressed in this paper.
2.2.2 – Retail
The sustainability of this element of the chain is dependent on the values of the organisation retailing the garment and that of the end user.
From an organisation’s perspective, the building/shopfitting, heating and lighting are all very important drivers of sustainable behaviour. So too are working conditions, post purchase guarantees, brand/organisational values and sustainability targets – all of which must drive responsive behaviour.
Some excellent examples of sustainable shopfitting investment avenues include: (i) Chip(s)board®, a wood replacement made from potato skins, a waste product generated from the food industry. (ii) Aeropowder, a start-up creating insulation from feathers, generated from the poultry industry as waste products, and (iii) Local Works Studio who create building material out of oyster shells. Use of these products increases the sustainability efforts of the retailer.
In 2019, Australian brand Country Road, opened its first five-star Green Star Design Review-rated store in Melbourne, which was certified by the Green Building Council of Australia. The BottleTop flagship store in London created its Regent Street store by upcycling ocean waste and 3D printed the entire shop fit. There are countless other examples of innovative and sustainable shopfitting.
The starting point of success is designing with the end in mind and being able to source sustainable materials. Critical mass and change will only be achieved where there is a desire to do the right thing. This desire however must be supported with industry innovation, R&D and investment, the louder the share of voice, the quicker the pace of change.
Post purchase packaging options are also strong drivers of carbon emissions, with the deleterious effects of single use plastic packaging being well documented. Where policies legislate the need for sustainability, innovation and funding soars. In the UK, the Department for Business, Innovation and Skills collaborated with the private sector to encourage R&D for biodegradable packaging to replace plastics. This project combines £60 million from the public sector with £149 million from the private sector[14].
2.2.3 – Customer Use
The Customer Use phase is generally accountable for the production of 20% of a garment’s carbon footprint, including washing, drying, ironing and repair. However, garment utilisation has decreased over the past 15 years by 35%[15]. This brings into question the current fast fashion model and its associated environmental costs. Increasing the productive use of the garment is the best possible mitigating factor, thereby reducing its production footprint over time.
At the heart of the debate is the question of how to increase the value perception in every garment owned, whether inexpensive or not. The answers lie in the durability, reparability and an understanding of the systemic impacts of our behaviour. What we do with the garment once we believe it is past its productive life defines its final footprint and collectively creates future footprints.
Understanding that there is an emotional, physical or psychological attachment to a garment is critical. At a certain point, the owned garment will no longer be fit for the owner’s purpose. For example, events like pregnancy, a growing child, a significant event or losing/gaining weight are all drivers of consumer behaviour.
These realities require different retail models, such as Circos™ or Bundle’n’joy which create a rental model for these ‘events’ in our lives. Rent the Runway or HireStreet enable a rental model in specific categories of product, or across multiple categories and brands, whilst peer to peer collective rental models like HURR provide the platform for the owner of the garment to list their product for rent.
However, consideration also needs to be given to those garments that are now ‘out of favour’, be it in the rental markets or owned. Alternative routes to market need to be explored, with the aim of increasing the garment’s useful life. Resale provides one of those routes; charity stores and pre-loved outlets all play a critical role. According to the House of Commons Environmental Audit Committee[16], a 10% increase in second-hand sales could cut carbon emissions per tonne of clothing by 3% and deliver a 4% saving on water. A key enabler is garment durability and longevity, garment design and construction must create a product that resists damage and wear[17], so that it can still be useful.
The impact of Western nations’ second hand/charity export of clothing to Asian and African continents requires careful consideration. Systemic impacts are severe, while it provides a quick and inexpensive clothing solution to those nations, it also takes away opportunities to develop the industry locally. The President of Rwanda, Paul Kagame noted that “We have to grow and establish our industries”, the country stopped importing garments from the USA and UK in 2019.
According to the United Nations, in 2016 the UK and USA’s global exports for second hand clothing into foreign markets topped over $1 billion. In many instances, the volume of clothing outstrips demand, resulting in those garments being committed to landfill. This is not ideal and very counterintuitive in terms of carbon offsetting, it is also not a long-term sustainable solution.
Ultimately, when the garment can no longer be worn, what is next? As it stands today, by 2030, 148 million tons of waste will be generated annually, 17.5 kg per capita [18]. This problem again drives potential opportunities in creating value out of the now ‘discarded’ garment.
2.2.4 – End of Use
Less than 1% of material used to produce clothing is recycled into new clothing and over 73% of end of use clothing is either sent to landfill or incinerated[19]. Within the UK, the WRAP organisation estimates that £140 million of clothing goes to landfill each year. We all have a collective responsibility to change this behaviour.
Following on from the theme of turning waste into opportunity, scope exists for value creation in the End of Use stage. Throughout this paper, it has been inferred that recyclability will provide a measure of sustainability to the textiles and garment/fashion industry. Converting textiles waste into raw materials for new products must be the goal. However, this change will only be achieved through investment in R&D, along with hard and soft technologies that support advances in recycling techniques.
Unfortunately, historical R&D investment in the fashion industry is less than 1% of sales, where consumer electronics is believed to be around 10% – 15% and pharma and bio-chemical at 20% – 30%[20].This Fashion for Good report also states that the industry would require $20 – $30 billion financing investment per year, to develop the disruptive technologies needed to achieve the step change required.
This part of the value chain, like all the others, requires careful consideration. From a systemic perspective, the first question is where and how do we collect the discarded garments? Once collected, how do we sort the garments, by colour, fibre type and fabric construction? Once these questions are answered; how do we recycle? Do we sort, grade then resell/export, upcycle, downcycle or recycle?
As can be expected, the answers to these questions are complex and we need to invest in simplifying the solution. Every process questioned above requires innovative ideas and these ideas represent the investment opportunities. The simpler the answer, the greater the ‘stickiness’ factor and reciprocal adoption, since we are in the early stages of this journey, the time to invest is now.
There are some wonderful examples of innovative recycling approaches, for example, Block TEXX in Australia. Founders Graham Ross and Adrian Jones are pioneering the textiles recovery journey, diverting it from landfill and turning it into a resource and feedstock for the industry, their S.O.F.T. ™ (separation of fibre technology) is highly efficient, recovering 95% of volume processed with zero waste – while doing so offsets 29 kgs of CO2 emissions for every kilogram processed.
Re: Nucell is using technology to dissolve cotton and natural fibres into a cellulose pulp which can be turned into a textiles fibre (Circulose®) and fed back into the industry.
Another brilliant example of excellence in the industry is EVRNU®, Stacy Flynn and colleagues innovated a technology (NUCYCL™) that extends the life of single use textiles fibres by extracting the molecular building blocks, creating a multi life resource.
Or, closer to home, London-based Worn Again Technologies are innovating polymer recycling technology that enables the decontamination and extraction of polyester polymers and cellulose from cotton. The process saves energy and accelerates the industry towards a waste free circular resource world.
The companies mentioned above make use of enzymes and chemicals to convert the textiles. Pure Waste Textiles uses a mechanical process to open the fabric into fibres, spinning them into a yarn. This innovative company also runs a vertical operation guaranteeing the value chain and its sustainability credentials.
More diversified fibre offers are provided by Recover Textiles covering wool, cotton and cotton blends. They have also recently created a collaboration with Mud Jeans, who keep the fibres in the loop, by leasing the garments.
Challenges in the recycling industry remain high, collecting garments and sorting fabrics is complex; fibre blends are not all equally recyclable and there is no ‘traceability’. Resale is a judgement call, therefore a costly, manual sorting process takes place.
Within fabric composition identification, there are early developments taking place in near infrared technology (EU funded), however it is still difficult to make it commercially viable.
Recycling in the fashion industry worldwide is low and the associated costs are high. Critical mass has not been achieved, however, investment will turn this curve. Based on the Pulse of Fashion Report, the industry does not fare well on the sustainability front, only achieving 32 points out of 100[21].
Evidence shows that it is not the lack of disruptive ideas that are the problem, but the need to accelerate the change – meaning investment is required.
3 – Conclusion
Accelerated change can only come about when there is investment. The hard tech innovation has a longer development timeline and, in many instances, bespoke manufacturing requirements. As identified in the Financing the Transformation report, (exhibit 5, p.13), there are two major gaps to cross, these being technology and commercialisation[22]. Both require a great deal of capital investment.
The industry is transforming and there is increasing recognition of the sustainability shortfalls. Shifts are also taking place in the customer base and it is a certainty that the current consumption model is changing, hence, less will become more.
The “less” we produce, needs to be done in a more sustainable manner. Throughout this paper, evidence has been cited where innovation is starting to drive that change. It is my recommendation that the Green Angel Syndicate review previously perceived barriers to investing in the garment and fashion industry.
It is not a question of should we invest, but rather a question of where in the value chain can we make the most impact. How do we leverage the $160 billion opportunity? And what can we do to ensure a $2 trillion industry become future fit in a sustainable way?
All five stages of the value chain represent opportunities, however, based on this paper and on the reports referenced, the most immediate hard tech value add can be found in raw material production and end of life management. Tactical soft tech solutions can be capitalised on within the Cut Make and Trim and Use/Resale processes.
The closing imperative – we will only provide a sustainable clothing solution to a soon to be 8 billion worldwide population through innovation, collaboration and investment. Systemic thought leadership needs to be applied to each of the inputs of the value chain and the investment decisions must therefore enhance the sustainability and circularity of the industry.
References
[1] Global fashion Agenda and the Boston Consulting Group, Inc (2017) pulse of the fashion industry
[2] Global fashion Agenda and the Boston Consulting Group, Inc (2017) pulse of the fashion industry
[3] Quantis, Measuring Fashion, Environmental Impact of the Global Apparel and Footwear Industry Study (2018)
[4] House of Commons Environmental Audit Committee, Fixing Fashion: Clothing Consumption and Sustainability
[5] Financing the Transformation in the Fashion Industry, Boston Consulting Group, Fashion for Good (2020)
[6] Financing the Transformation in the Fashion Industry, Boston Consulting Group, Fashion for Good (2020)
[7] Global Fashion Agenda and the Boston Consulting Group, Inc (2017) Pulse of the Fashion Industry
[8] Ausra Vasileva , https://www.raw-ganic.com/, Organic Cotton Saves Water and Reduces Carbon Emissions
[9] https://www.ellenmacarthurfoundation.org A New Textiles Economy Full Report Updated 01/12/17 p.68
[10]https://www.infiniumglobalresearch.com/ Infinium Global Research, Vegan Leather Market
[11]Lauren Chiu, https://www.stylus.com/, Sustainable Fashion How to Make, (March 2020)
[12] Chloe Frost, https://www.stylus.com/, Sustainable Fashion How to Source, (March 2020)
[13]Emma Watkins (1), Jean-Pierre Schweitzer (1), Eeva Leinala (2), Peter Börkey (2): Policy Approaches to Incentivise Sustainable Plastic Design Environment Working Paper No 149 pg 26 https://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ENV/WKP(2019)8&docLanguage=En
[14] Emma Watkins (1), Jean-Pierre Schweitzer (1), Eeva Leinala (2), Peter Börkey (2) Policy Approaches to Incentivise Sustainable Plastic Design Environment Working Paper No 149
[15] A New Textiles Economy Full Report Updated 01/12/17
[16] House of Commons Environmental Audit Committee, Fixing Fashion: Clothing Consumption and Sustainability
[17] The Sustainable Clothing Guide by The Waste and Resources Action Programme (WRAP)
[18] Global Fashion Agenda and the Boston Consulting Group, Inc (2017) Pulse of the Fashion Industry, pg 11
[19] A New Textiles Economy Full Report Updated 01/12/17
[20] Financing the Transformation in the Fashion Industry, Boston Consulting Group, Fashion for Good (2020)
[21] Global Fashion Agenda and the Boston Consulting Group, Inc (2017) Pulse of the Fashion Industry
[22] Financing the Transformation in the Fashion Industry, Boston Consulting Group, Fashion for Good (2020)