The fashion industry has a major opportunity to secure a prosperous future. The industry is facing a rapidly growing demand worldwide, and at the same time many companies are stepping up their work toward more environmentally and socially responsible practices. But this is not enough. To put fashion on a path to long-term prosperity financially, socially, and environmentally, much more must be done.

The Pulse of the fashion industry is still weak. The global Pulse Score, a health measure for the Fashion Industry, is 38 out of 100. In the past year, the Pulse Score improved by six points, from 32 to 38. The Pulse Survey, covering the perspectives of decision makers from all industry segments, confirms that sustainability is rising on the corporate agenda. Of the executives polled, 52% reported that sustainability targets acted as a guiding principle for nearly every strategic decision they made—an increase of 18 percentage points from last year. While encouraging, these results also speak to the need for still more movement toward increasingly responsible practices.

This year’s progress came almost entirely from small and medium companies in the mid-price segment. Their average Pulse Score increased by 10 points. Given this segment accounts for half of the industry by revenue, progress here is particularly encouraging. However, other industry segments showed less progress in addressing their environmental and social footprints. The low-performing smaller companies in the entry-price segment remained significantly behind, making little to no progress since last year. The giant companies and luxury players still lead the way but finding solutions for the unresolved problems is becoming tougher and impact and returns are receding.