Fashion CEOs set sustainable priorities as gaps between goals and action remain

Leaders from fashion companies including Nike, H&M and Kering outlined priorities for a sustainable industry at this year’s Fashion CEO Agenda, while suppliers urged for the bridging of gaps between words and actions.

The 2021 agenda introduced five areas of social and environmental sustainability that industry leaders have to focus on: respectful and secure work environments, better wage systems, circular systems, efficient use of resources and smart material choices.

After three previous editions, the framework of the Fashion CEO Agenda presented last week will be a lasting one, as future reports will measure progress on the guidelines set this year. “It’s about defining a common direction for all stakeholders in the industry to truly drive systemic change,” said Helena Helmersson, the chief executive officer of Swedish fashion giant H&M Group, said during an online panel last Wednesday.

Fashion CEOs set their agenda ahead of EU legislation

From sustainable collections to goals for reducing carbon emissions, the fashion industry has accelerated its environmental efforts over the past year to meet increasing consumer demand for greener apparel.

EU policy makers are also introducing various initiatives in 2021 to require textile companies to act more sustainably moving forward. The approaching legislation will include efforts such as the EU Textile Strategy, the Sustainable Products Policy Initiative and the Sustainable Corporate Governance Initiative.

These guidelines help suppliers who are wondering where to start in their efforts to become more sustainable, said Roger Lee, the CEO of one of the world’s biggest apparel manufacturers, Tal Apparel Ltd. He also called for common sustainability measures in the fashion industry. Adhering to increasingly diverse metrics can become complicated and overwhelming for suppliers, said Lee. He sees the potential for the Higgs Index from the industry lobby Sustainable Apparel Coalition to become the most common standard.

More collaboration needed?

“No one here alone has the capabilities or the leadership position to make these kinds of meaningful changes but I also think that if we put together different capabilities that we have, we can really create a strong momentum,” said David Schneider, co-CEO of Berlin-based online fashion retailer Zalando.

Despite calls for more collaboration, suppliers still feel the gap between words and actions needs to be closed to compensate for their investments in more sustainable production methods.

“Eighty percent of the brands still don’t really put the money where their mouth is,” said Lee. “No one has said: ‘because of what you’re doing, I am going to pay you 10 cents more. But people are talking about it, so I am very hopeful about the future’,” he added.

His remarks were echoed by Miran Ali, managing director at Dhaka-based Tarasima Apparels Ltd. Ali, who is also the vice president of the Bangladesh Garment Manufacturers and Exporters Association, pointed out that many suppliers were left to fight for themselves during the pandemic.

“The covid crisis has shown us that there is a massive gap of collaboration and cooperation between retailers and their suppliers. And this gap has to be breached,” Ali said in a video stream during Fashion CEO Agenda. His company employs more than 50,000 people and supplies the H&M Group among others.

Since the start of the pandemic, the situation in textile producing countries worsened as garment workers were laid off or governments reduced minimum wages. A report by industry forum Global Fashion Agenda and consulting company McKinsey estimated last year that only 30 percent of fashion companies supported their suppliers by providing payments for raw materials and fabrics as well as prepaying orders.

Much remains to be done, it seems, for executives in the fashion industry. They need to fulfill existing supply chain commitments and drive investment in technologies that create a more sustainable industry.

“The CEO and the top management have a crucial role in this,” said Achim Berg, senior partner at McKinsey. Executives need to lead the change, integrate it into the strategies and the key performance indicators of the companies. “I think a sustainability department on its own won’t do the job,” Berg said.