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EFF SOURCE Fashion business success without compromise

27 July 2016

3 Things That Will Transform the Fashion Industry for the Better

Contributor Tamsin Lejeune

reformation periwinkle dress

The pace of change in the fashion industry towards better social and environmental practices is frustratingly slow while the opportunities for improvement remain open. Ethical Fashion Forum Founder and Mysource CEO, Tamsin Lejeune, looks at three key things that could truly transform our industry for the better. Image: Reformation

Naomi Klein’s No Logo, published in 1999, alerted the world to the exploitation in fashion industry supply chains.

Almost 20 years later, the pace of change is frustratingly slow. I’m not alone in feeling the frustration – there is a growing sense amongst those leading the sustainable fashion movement that it is time to stop chipping away at the edges. We’ve done our time, chipping at edges. Time for some real impact. I see three huge opportunities ahead to drive transformative change:

1. Creating a level playing field

For too long it has made better commercial business sense to build supply chains that drive financial profit at the expense of people and the environment. Things are changing. More and more businesses are proving that sustainable practices create the best model for long term financial profit. Examples at the front line including Reformation – whose revenues have been tripling year on year – and Kering – which is investing heavily in supply chain innovation and valuing environmental loss alongside financial profit (See Puma’s Environmental Profit and Loss Account).

The visionaries have designed the ultimate way of levelling the playing field in 3D P&L (3 dimensional profit and loss). This is an enormously inspiring concept that involves all companies valuing their social and environmental impact on a par with financial P&L. Thus a companies annual accounts represent a true picture of the value they have created – or the losses they have made. 3D P&L is an ambitious concept – and one that, if implemented, will transform business practices on an unprecedented scale.

2. Real leadership – from our industry’s leaders

All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. – John Kenneth Galbraith

As climate change and global inequity grow in status as the “major anxiety of our time” , we are seeing fashion industry leaders step up. Roland Mouret backed and launched the climate change film “Ten Billion”, Stella McCartney is building on her beliefs in the sourcing practices of her brand, Vivienne Westwood has become an outspoken advocate for sustainability, and Francois Henri Pinault changed the name of his global empire to ”Kering” (pronounce it) as a statement of his commitment to a more caring way of doing business.

Yet, the vast majority of business leaders in the fashion industry do not see “the major anxiety of our time” as a part of their responsibility. For them “business as usual” means at best putting in place a CSR (corporate social responsibility) or ethical trade department with a remit, but little power to drive better practices, and at worst, taking no responsibility at all for driving better practices in their supply chains.

Values led leadership is linked to gender. According to 2013 U.S. Trust Insights on Wealth and Worth, successful women are more likely than successful men to own a business with the goal of making a positive impact on the world. Despite the fact that businesses with more women in leadership perform significantly better financially, with 41% higher return on equity and 56% better operating results (McKinsey), women led business is not getting funded – less than 7% of Venture Capital financing goes to companies led by women.

More real leadership will transform our industry. Investment in values led leadership, including more women led business, will result in better returns for investors. It will also create a launch pad for better practices in our supply chains.

3. Legislation, policy, and industry commitments

The UK’s 2015 Modern Slavery Act makes companies accountable for slavery occurring along their whole chain of operations. For the first time this creates legally binding legislation relating to transparency in industry supply chains. After years of voluntary commitments and initiatives, from the Ethical Trading Initiative to the Sustainable Apparel Coalition, which are limited to those companies that wish to engage, the Modern Slavery Act requires all large businesses to be accountable.

Creating binding regulation for an industry as intensely global as fashion has obvious challenges. However, the opportunities for intelligent legislation on a national level are enormous.

On an international level, there are also untapped opportunities to drive better practices. The UN Global Compact offers the foundation to build a much more binding and impactful coalition of businesses focused not just on doing no harm – but also on how they can build value throughout their supply chains.

The rapidly growing B Corp movement is inspiring in its potential to drive change through serious commitments by industry. B Corp is to business what Fairtrade certification is to coffee. B Corps are for-profit companies certified by the nonprofit B Lab to meet standards of social and environmental performance, accountability, and transparency. And if B Corp were to join forces with the UN Global Compact? Now we’re talking.

Collaborating as an industry and as a society through policy is the hard but essential route to achieve transformative change. It’s time to stop chipping away at the edges, and that means getting serious about legislation, on a global scale.

Let’s stop chipping at the edgestweet us with the hashtag #StopChipping and share your thoughts on how we can enable real change in the fashion industry. If you are in London – come and meet other leaders and pioneers in the Sustainable Fashion space at our next monthly meet-up.

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