The value of the global fashion industry is $3 trillion (TL 40.51 trillion), accounting for more than 2% of the world's gross domestic product (GDP). Relatedly, the fashion industry’s carbon footprint became larger than that of international flights and maritime shipping combined in 2021. So, will 2022 be the legislative year of the fashion industry?
It is important to note that the fashion industry is responsible for 10% of all greenhouse gas emissions, with textile production alone estimated to release about 1.2 billion tons of greenhouse gases into the atmosphere every year. In addition, vast amounts of water are also needed to produce the clothes we wear and, accordingly, the fashion industry is responsible for 20% of global wastewater. This is enough water to sustain the United States for almost 15 years.
According to the "One Green Step" report of Garnier, a mass market brand of French cosmetics company L'Oreal, 73% of United Kingdom fashion consumers wants to be more sustainable in 2021. Relatedly, in the U.S.-based management consulting firm McKinsey & Company’s 2022 State of Fashion report, consumers increasingly want to know where the materials come from, how the products are made and whether stakeholders are treated fairly. In response, more and more companies are working to expand their sustainable product lineup and increase supply chain sustainability. But how? It is like saying "I’ll give up smoking by 2050, but will continue to buy a pack a week," or smoke even more.
Published by the Changing Markets Foundation, the Synthetics Anonymous report assesses brands across the spheres of fast fashion, luxury fashion and online retail based on their sustainability claims. The brands analyzed are Asos, Boohoo, Forever 21, George at Asda, Gucci, H&M, Louis Vuitton, Marks & Spencer (M&S), Uniqlo, Walmart, Zalando and Zara.
In this report, H&M was highlighted as a particular concern; its Conscious Collection was found to contain more synthetic materials than its main collection, with labels on many items failing to reveal what percentage of these materials were recycled. This is a quite shocking reality.
The Atacama desert in Chile has become a dumpster for the global fast fashion industry, with over 100,000 clothing items laid to waste, many of them unsold items with the price tags still attached.
When we think of industries that are having a harmful effect on the environment, manufacturing, energy, transport and even food production might come to mind. But the fashion industry is widely believed to be the second most polluting industry in the world.
Reportedly, "the fast fashion concept," the mass production of cheap and disposable clothing, has made the fashion industry one of the most polluting industries worldwide, just after oil and agriculture.
According to McKinsey, some 3/5 of all clothes worldwide are trashed within one year after production. This reality leads us to reconsider one more time the environmental, social and corporate governance (ESG) targets.
ESG in fashion
Do we invest money into practices that lead us deeper into environmental crisis, or into the solutions that could get us out of it? To answer this question for big companies, an integrated ESG strategy can guide positive change.
Meanwhile, ESG metrics help evaluate firm performance based on sustainability priorities. The "E" stands for "environment," reflecting a focus on aspects like resource use and pollution. The "S" stands for "social," which looks at issues like a company’s treatment of its own employees or labor practices within its supply chain. The "G" stands for "governance," which draws attention to questions such as gender diversity within the board of directors.
The international rendezvous of government and industry leaders has also become a catalyst for criticism about so-called "greenwashing" in the fashion industry.
According to the Governance & Accountability Institute, the proportion of S&P 500 firms reporting their ESG performance surged from under 20% in 2011 to 90% by 2019. And the contents of their ESG reports have grown drastically during this time. Now, more than ever, this applies to the fashion industry.
Through more sustainable fashion
Popular terms such as sustainable, eco-friendly, 100% natural or ethically produced should be used with caution. Several jurisdictions have strict transparency requirements in place around the use of such labels. For instance, under German case law, the extent of the information duty depends on the type and promotion of the product and its effects on the environment. The use of ambiguous words, such as the terms mentioned above, requires an explicit explanation if the concrete meaning is not apparent from the circumstances of the particular case. The unspecified use of such words carries the risk of the term being considered misleading.
Some major players have shifted into secondhand sales. In 2019, Levi Strauss & Co. launched a secondhand site, and even Gucci recently launched a luxury secondhand online store as well. There's certainly a lot going on in the world of fashion, and ESG is disrupting the sector with a vengeance.
ESG issues, or environmental, social and governance issues, are becoming a mainstream consideration globally. The questions raised by ESG issues have never been in focus to the extent that they are right now. Today more than ever, people are looking at the world and wondering how they can make it a better place.
The 'S' in ESG
Many of us remember that the retail company Primark was one of the brands connected to the 2013 Rana Plaza factory collapse in Dhaka, Bangladesh that killed over 1,100 and injured 2,500 more. Ever since this human rights disaster, fashion companies have been in steadfast competition to market their social values.
A number of reports have emerged in the post-pandemic era that indicate the pandemic has made people more socially conscious. For example, American finance company MSCI Inc.’s 2021 Global Investor Study found that 57% of investors thought social issues had become more important to them in the period.
While some businesses, such as Amazon and Marks and Spencer have reacted by increasing their standard hourly pay, not all have followed suit.
Consumers should be careful
Consumers must be cautious of the oversimplified exaggerations of the fashion market. In 2019, a fashion product claimed as being "made from recycled paper" was ruled misleading by German judges because only 80% of the product’s components contained recycled materials; the court found that, based on the wording of the claim, German consumers would expect this product to be 100%.
Advertising with ESG claims requires legal diligence in order to comply with existing advertising laws. In this regard, advertisers should always aim to avoid the inclusion of misleading claims or false statements. Any claim that may be regarded as objective by consumers must be substantiated to comply with existing laws. This also helps consumers to be more ethical buyers and be more conscious stewards of the planet. To know the marketing tricks of fast fashion will help consumers slow down their desire to change our wardrobes and styles in accordance to the whims and attitudes of fast fashion.