COVER STORY: Fashion sector turns to digital to drive sustainability

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COVER STORY: Fashion sector turns to digital to drive sustainability

The fashion industry is one of the biggest polluters on earth, close to 100 million garments of clothing are made a year, but not all of these reach the consumer, in fact three out of five of these garments will end up in landfill, rather than a wardrobe.

As consumer and employee attitudes - and funding policies based on ESG principles become more aggressive, industry leaders say the sector needs to restyle its intentions and make sure every facet of its operation is sustainable. Technology will play a central role and organisations are now developing new tools and software to help the fashion industry reduce their footprint.

Consumers are also educated and sensitive to issues such as greenwashing and know when to call BS when a brand's marketing campaign clashes with its real-world behaviour. The spotlight is on these companies to either alter their behavioural hemlines or risk being discarded like last year’s style.

Supply chain

The fashion industry supply chain is not as simple as picking the cotton, sending it to the manufacturer, making the garment and sending it to a store.

There are so many hands involved says Kate Dillon, founder and CEO of SheLion who has experienced it first hand. Dillon wanted to create an end-to-end product made in Australia and chose something simple as a sweatshirt, however, she said it wasn’t as straightforward as she first thought.

“I had no idea that up to 300 people touch a garment like a sweatshirt to make it, if it's entirely made in Melbourne, which was a huge eye opener,” Dillon said. “It is not simple at all, to someone who was not totally naive and did have some design background.”

Brian O’Kelley, CEO and co-founder at Scope3 an organisation focusing on the decarbonisation of the global economy said fashion brands need to understand their supply chains from an environmental, social and governance (ESG) point of view.

“You have all of this ESG, not just environmental, but some of the social concerns about employee rights and how employees are being treated. One of the questions for the fashion space is how do you deal with a trend, like fast fashion where trends are changing faster and faster?

“Does that mean you need more control over your supply chain or do you need to have more options? It's an interesting tension that I think most companies are trying to battle,” he said.

Fashion brands are still struggling with understanding the visibility of their supply chains, according to Laura Rainier, senior director analyst at Gartner. 

“There's a real challenge to visibility and driving that visibility all the way to the source, and that remains a challenge for the industry. You're seeing much more robust due diligence processes and interesting programs that begin to address some of the root causes of challenges in the supply chain,” she said.

Rainier said it remains quite difficult for most businesses to trace their products all the way to the source, although new solutions are being developed.

“There are technology solutions that are emerging, including blockchain focused solutions that are, beginning to address some of these challenges,” she added.

Nifty NFTs

McKinsey’s The State of Fashion 2022 report highlighted this year brands will be pushing harder on circular business models, greener materials and more sustainable technologies.

The report said blockchain will be the underlying technology for digital “product passports”.

“These contain coded information that can add value, support supply chain transparency and ensure authentication — a significant advantage tackling counterfeiting.

“Online business models were a standout success story of the pandemic. We expect that companies will continue to invest in digital innovation and experiment with fresh approaches to creativity and commerce in 2022,” the authors write.

Natalie Johnson is the CEO and founder of neuno, an online fashion house dedicated to making fashion digital through NFTs. In another role, she was the brand manager for a large Australian fashion house and saw how wasteful the fashion industry can be.

“When I was a buyer, we had KPIs and if we had 75 to 80 percent sell through that was considered good. So you are buying in your category hundreds of thousands of units and as long as you sell at 75 percent you were considered doing a good job,” she said.

“You're buying knowing you're going to be throwing 25 percent away. It's just such an inefficient model and NFTs challenges that business model,” she said.

From seeing that waste and trying to launch her own sustainability brand she found herself enamoured with NFTs and launched neuno. Johnson believes NFTs are the future and could possibly be an additional revenue stream for fashion brands.

“The revenue stream sitting in that omnichannel that might actually deliver them more money and physical products over the next five to ten years," she said.

“We want [the fashion houses] to focus on what they do best. They have hundreds of years of heritage for some of these companies. We want them to focus on design but let's try and get their designs into the hands of new generations that might never come into your store, because it’s intimidating, it’s thousands of dollars but they might buy digital assets from you,” she added.

Circular economy

AirRobe is a business thriving off and encouraging the circular economy. It encourages consumers to resell, rent and recycle their past fashion purchases, seamlessly automating away the clunky, manually listing process entirely.

Its retail partners include The Iconic, P.E Nation and Rebecca Vallance.

Hannon Comazzetto, CEO and founder at AirRobe said when consumers buy a product on their partner retail sites, they can see the estimated resale value of that item and can add it to their AirRobe wardrobe to potentially resell at a later date.

Comazzetto said when she speaks with her customers, they say AirRobe makes it easy for them to be a part of the circular economy and how conscious they’re becoming of the impact they make on the environment.

“Another interesting thing we've been learning is just how much consumers are now starting to think about what it is they're buying and making smarter, more economic purchases, through thinking about what the resale value of an item might be,” she said,

“Rather than buying a throwaway item you couldn't sell in the resale space. They're seeing, that there's actually financial benefit in spending a bit more, and then wearing it several times, but then later being able to resell the items.”

She added, “It's both being able to get access to a beautiful garment, but also then being able to recoup back, you know, and have a lower cost of ownership for that investment pace.”

While the circular economy may seem like an economic barrier for fashion brands, Rainier at Gartner suggests it’s better for those fashion sites to cannibalise themselves than be cannibalised by someone else.

“As a result, those organisations that are able to implement circular economy solutions are going to be more effective in the long run,” she said.

“In addition, if the circular economy is implemented effectively, we can identify ways to incentivise the right type of behaviour, incentivise the production of more durable longer-lasting goods and products that are ultimately able to be remade and recycled into new products.”

The shadow of modern slavery

There are darker aspects to fashion sustainability as well. Dr Stephen Morse, founder and CEO of Unchained Solutions said modern slavery in the fashion industry is “hidden in plain sight”.

“Modern slavery is all over the fashion industry, sadly, and we see indicators of modern slavery indicators being low pay, no pay, informal contracts or short contracts, people's documentation being confiscated excessive overtime, health care benefits being withdrawn and all sorts of threats and coercion,” he said.

“A lot of indicators from one of slavery exists in various components that make up the fashion industry, which has a very long supply chain.”

Morse said everyone from governments to NFPs and those in the private sector all have a role to play in stopping modern slavery as they all bring different strengths to the table.

“For those who are investors, we need to think differently about what we want from investments and ESG reporting is building on that. It's not just looking for the financial return, but we're also looking for value propositions and purpose,” he said.  

“What is the social impact, the environmental impact and the governmental impact, the governance impact on the business issues that we make?”

Technology does have an important role in identifying and stopping modern slavery in the fashion industry, however, there still needs to be a human touch, Morse explained.

“It needs to be a combination of technology and having human beings expressing empathy, looking into the nuances of the complexities, which often technology can't do on a social spectrum,” he said.

“To combine that with the use of technology to increase the voice of those who are being exploited. To increase the transparency and traceability and to advance the process of due diligence. We’re seeing examples of that, but we need to see a bigger commitment to that.”

Future planning

Design schools are already implementing sustainable courses and ideas to ensure the future generation is well equipped to deal with every aspect of sustainability.

In Australia, the Australian Fashion Council (AFC) has created FashTech Lab, a partnership with five technology companies to create a workflow for the Australian Fashion Industry using 3D design technology.

According to the AFC, this new workflow will help fashion businesses adopt 3D design technology in an effort to reduce overheads, costs, textile waste and carbon emissions through the design and sampling process.

Leila Naja Hibri, CEO of the AFC said, “Today, the fashion industry is one of the biggest polluters in the world. These tech solutions, when combined together in a systematic workflow, will not only aim at reducing textile waste and carbon emissions, they will also help fashion brands conserve precious resources in time and money through newfound operational efficiencies.”

With all of these new tools and platforms, Dr Emily Brayshaw, research associate - Faculty of Design, Architecture and Building at UTS said with the role of technology in fashion it’s ultimately up to people to decide how it will be utilised.

“It's about human-centred design, anything like technology, anything like fashion, it's all made by humans, for humans to use. We need to rethink how we're using these technologies, we need to identify and rethink and be innovative about what we have,” she said.

Consumers want to do the right thing when it comes to sustainable choices Brayshaw said, “We increasingly, we want to make these good decisions. The role of designers and the role of these fashion industries is to support consumers in these choices that we want to make, rather than just going, here's your plastic tray, lap it up,” she added.

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