IN a recent study titled "Sustainability in Fashion", Roland Berger, the only management consultancy of European heritage with a strong international footprint, analysed the sustainability imperative for the fashion and footwear industry.
This specific focus was driven by the fact that fashion and footwear account for up to 10 per cent of global greenhouse gas (GHG) emissions.
Globally, fashion and footwear consumers have become increasingly conscious of sustainability. This is starting to influence their behaviours and choices for fashion.
The Covid-19 pandemic and the growing frequency of weather catastrophes have made consumers more aware of the fragility of the environment and the impact of the modern way of life.
Governments, especially in regions where global leading brands are headquartered, have formulated very ambitious goals for GHG emission reduction and are now changing norms and standards to force leading brands take positive action.
Suppliers in Southeast Asia will be key players in the upcoming transformation as their operations contribute to a large part of the emissions of the industry.
"The sustainability imperative in apparel and footwear is not only a western issue… all Asian players in the value chain have a role to play.
"From suppliers of raw materials to fashion stores — consumers in Asia are becoming increasingly concerned over environmental issues.
"Global apparel and footwear brands must engage their Asian suppliers in substantial transformation plans to achieve their sustainability commitments," said Roland Berger senior partner, consumer goods and retail (Southeast Asia), Julien Bourdiniere.
Engaging in a sustainability programme in fashion requires an in-depth review of the end-to-end product value chain, from raw materials production to the use and recycling of the product by the end-customer.
Multiple levers are available to fashion brands, which include reviewing their energy strategy (for a better efficiency and more renewable sources); working with suppliers to select low-impact raw materials and energy sources, through guidance, incentives and often co-investment and reviewing their logistics network and inventory policies with vendors to minimise the carbon footprint.
However, these new sustainability policies can generate a major risk of product cost increase and may become prohibitive given the current inflation of energy and raw materials costs.
When analysing the sources of GHG emissions in the overall industry, fashion retailers were found to be directly responsible for only six per cent of total industry emissions, whereas 71 per cent of total emissions came from upstream operations.
With global brands like Nike, adidas or H&M having the majority of their products sourced from China and Southeast Asia, suppliers from Vietnam, Indonesia or Bangladesh, as well as regional logistics service providers and quality control companies will play a crucial role in executing the plans.
"It is imperative for Asian players to act decisively on decarbonisation; they need to play a pivotal role in orchestrating the industry supply chain towards its net-zero obligations," said Roland Berger partner for consumer goods and retail (Southeast Asia), Hugo Texier.
The study highlights how fashion and footwear brands should tackle the issue and accelerate their move to a sustainable transformation of their operations.
According to the study, this can be done by firstly making sustainability a real corporate commitment, and recognising that it should no longer be the topic of an isolated department, but a major driver in all business decisions.
Whilst the organisation's chief executive officer is expected to inspire and sponsor an ambitious sustainability agenda, all departments and all members of the management have a role to play.
"At Roland Berger, we believe that the first step is to have a complete transparency of GHG emissions in the value chain, in order to drive new behaviors in their supplier's network," said Bourdiniere.
Second, by implementing a new collaboration model with suppliers and other partners involved in upstream operations. For instance, defining new KPIs to measure and report progress, demanding a new level of transparency in the supply chain, or implementing joint programmes to produce more wisely and limit overproduction.
This transformation is a comprehensive and mid-to-long term initiative, which is both complex and imperative.
Roland Berger has developed a complete set of tools and ready-to-use assets in its "Decarbonisation toolbox" which aims to secure and accelerate the outcomes of GHG emission reduction plans by brands and their suppliers.
To do so, brands and suppliers can meet Roland Berger consultants at the upcoming COP27 summit or engage with their local Roland Berger partner.
The study can be accessed here.