The Pulse of the Fashion Industry 2018 – Full Report  

The Pulse Report was co-developed with Boston Consulting Group (BCG), a global management consulting firm and one of the world’s leading advisor on business strategy, and Sustainable Apparel Coalition (SAC), the coalition that has developed the Higg Index, a suite of tools that standardises value chain sustainability measurement for all industry participants.

 

The fashion industry has a clear opportunity to act differently, pursu- ing profit and growth while also creating new value for society and there- fore for the world economy. It comes with an urgent need to place environ- mental, social, and ethical improvements on management’s agenda.

 

In recent decades, the fashion industry has been an engine for global development. One of the world’s largest consumer industries,1 generating €1.5 trillion in annual apparel and footwear revenues in 2016,2 it employs around 60 million people along its value chain.

 

To continue the growth trajectory, the fashion industry needs to ad- dress its environmental and social footprint. The earth’s natural resourc- es are under pressure, and the fashion industry, although not the most obvious contributor, is a considerable one. Social conditions—also in the fashion industry—are far from those set forth in the United Nations’ goals for sustainable development. With current trajectories of production and consumption, these pressures will intensify by 2030 to the point of threat- ening industry growth itself.

 

With resources becoming even scarcer, the industry will face rising costs from labor to materials and energy. Based on conservative projec- tions, fashion brands’ profitability levels are at risk in the range of at least 3 percentage points if they don’t act determinedly, and soon.

The facts show a clear need for acting differently. The good news is that by changing practices, the industry can both stop the negative impact and generate a high amount of value for society, while also protecting profitability. We estimate that the world economy would gain about €160 billion annually if the fashion industry would successfully address those environmental and social issues.

 

As of today, the sustainability ‘pulse’ of the industry is weak. The new- ly developed global Pulse Score, a health measure for the sector (see page 28 for more details), is only 32 out of 100. The industry is not yet where it could and should be. The spread of performance is also quite large. The best performers on sustainability are the very big players as well as some mid-sized, family owned companies, while over half of the market, mainly small to medium-sized players, has shown little effort so far. The rest of the industry is somewhere in between. This is confirmed by the Pulse Survey (further information on pages 35/36), where two-thirds of polled fashion executives have not made environmental and social factors guiding principles for their companies’ strategy.

 

Fashion brands with targeted initiatives will be best placed to improve their environmental and social footprint and counteract the rising costs of apparel production. They will pull ahead of their competitors with innovative ways of doing business and efficient production techniques that minimise the use of water, energy, and land, as well as hazardous chemicals. By realising better working conditions and improving workers’ safety, they will minimise their operational and reputational risks and create significant value for themselves and the world economy. These initiatives will improve the overall industry Pulse, raising the average and creating inspiring best practices for the low performers to learn from.

 

However, even if the entire industry caught up to the best practice front-runners, it would not be enough. Under optimistic and ambitious assumptions, only less than half of the €160 billion could be captured.4 The industry needs coordinated action beyond today’s solutions. This report explains the size of the challenge and the need for innovation, collaboration and supporting regulatory action to close the gap.

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Purchase the report to continue reading. Global Fashion Agenda is a non-profit organisation and your contribution will help Global Fashion Agenda continue its mission to accelerate impact in the fashion industry.

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Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

The Pulse of the Fashion Industry 2018 – Full Report  

The Pulse Report was co-developed with Boston Consulting Group (BCG), a global management consulting firm and one of the world’s leading advisor on business strategy, and Sustainable Apparel Coalition (SAC), the coalition that has developed the Higg Index, a suite of tools that standardises value chain sustainability measurement for all industry participants.

 

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.

Donate to continue

Purchase the report to continue reading. Global Fashion Agenda is a non-profit organisation and your contribution will help Global Fashion Agenda continue its mission to accelerate impact in the fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

The Pulse of the Fashion Industry 2019 – Full Report  

The Pulse Report was co-developed with Boston Consulting Group (BCG), a global management consulting firm and one of the world’s leading advisor on business strategy, and Sustainable Apparel Coalition (SAC), the coalition that has developed the Higg Index, a suite of tools that standardises value chain sustainability measurement for all industry participants.

 

The 2019 Pulse Score, the final pulse taken, shows that the fashion industry has improved its social and environmental performance since 2018 —and at a slower rate than the previous year. Despite this improvement, the fashion industry remains far from sustainable.

Furthermore, the findings demonstrate that fashion companies are not implementing sustainable solutions fast enough to counterbalance increasing negative environmental and social impacts of the rapidly growing fashion industry. If the Pulse Score stays on its current trajectory, the gap between industry output and the Pulse Score will only widen.

Jonas Eder-Hansen Chief Operating Officer
"Today, only 20% of textiles are collected globally. To achieve a circular fashion system it is essential that we capture the valuable resources currently being lost. Setting up a garment collection scheme is a pragmatic step in the right direction."

Donate to continue

Purchase the report to continue reading. Global Fashion Agenda is a non-profit organisation and your contribution will help Global Fashion Agenda continue its mission to accelerate impact in the fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Global Fashion Agenda and McKinsey & Company present research and a fact base to complement the priorities outlined in the CEO Agenda; which intends to guide and mobilise industry players in taking bold action on sustainability. This COVID-19 edition of the CEO Agenda presents six opportunities for fashion executives to rethink and rebuild a sustainable more resilient fashion industry. 

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Introduction

Our mission at Global Fashion Agenda is to mobilise and guide the fashion industry to take bold and urgent action on sustainability. The past year challenged global structures, especially regarding necessary rapid environmental progress and the lack of secure social protection schemes: COVID-19 hit the industry unprecedently, demanding real-time actions and long-term sight. Industry players had to shift focus on job recreation and the fair distribution of risks and profits along the value chain. In addition, long-standing systemic racism and the Black Lives Matter movement called for racial equity and dignity for marginalised and black communities.If we fail to take coordinated action on the greenhouse gas emissions causing climate change, we can expect to see increasingly common crises such as heatwaves or rising sea levels damage complex ecosystems that are vital to our future.

These systemic issues are apparent in the reality of climate change, exemplifying an intersectional environ-mental crisis that is set to produce socioeconomic impacts over the coming years, foremost affecting marginalised communities and people of colour. Fashion leaders are urged to focus their efforts on diversity, equity and inclusivity along the value chain to positively contribute to a just society and communities globally.When picturing a post-pandemic fashion industry, it is not built from scratch but inspired by existing tools and technologies that will move from ideation to reality and from pilots to wide-scale adoption.

Some shifts such as production to demand, increased product lifetime values, a less season-dependent design and product flow, textile-to-textile recycling or resale will be accelerated, while long-known best practices such as collaborative partnerships between all stakeholders in the value chain may become building blocks of business operations. Placing value-driven practices at the core of business will enhance capabilities for change management, allowing headway in the transformation of potential financial, social and environmental risks into untapped business opportunities and points of engagement with suppliers, customers and the investment community.Fashion’s leaders have to seize the opportunity to re-evaluate the lexicon of fashion. By rethinking and rebuilding, we maybe able to devise a new approach to fashion that is progressive, purposeful and people-centred, one that restores andrecovers from perturbation, creates meaningful, new jobs and ultimately increases resilience to mitigate the impact of crises in the future.Together, we must work towards a thriving industry that creates prosperity for all people and communities by working within planetary boundaries, reversing its impact on climate change and protecting biodiversity. With theFashionCEO Agenda, we call on fashion brands and retailers as well as industry players to pave the way to a just and resilient future

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Executive Summary

Since the Industrial Revolution, GHG emissions have contributed to atmospheric warming that has lifted global temperatures by around 1.1 degrees, with significant regional variations. The warming has precipitated more frequent and severe risks, including flooding, fires, droughts and storms, leading to socioeconomic impacts on, e.g. liveability and workability, food systems and natural capital. With temperatures set to continue their upward trajectory, it is likely these adverse impacts will become more severe over the coming years.

 

This research shows that the global fashion industry produced around 2.1 billion tonnes of GHG emissions in 2018, equalling 4% of the global total. This is equivalent to the combined annual GHG emissions of France, Germany and the United Kingdom. Around 70% of the fashion industry’s emissions came from upstream activities such as materials production, preparation and processing. The remaining 30% were associated with downstream retail operations, the use-phase and end-of-use activities.
 

Adding to the challenge of reducing its GHG footprint is the expectation that the fashion industry will continue to grow as a result of shifting population and consumption patterns. If no further action is taken over the next decade beyond measures already in place, the industry’s GHG emissions will likely rise to around 2.7 billion tonnes a year by 2030, reflecting an annual volume growth rate of 2.7%.

 

This research analyses two scenarios for the industry’s abatement efforts:

  1. Current pace trajectory.
    If the industry continues to embrace current decarbonisation initiatives at the current pace, emissions will be capped at around 2.1 billion tonnes a year by 2030, around the same as they are now. This would leave levels at nearly double the maximum required to stay on the 1.5-degree pathway.
  2. Accelerated abatement.
    To align with the 1.5-degree pathway over the next 10 years,
    the fashion industry should intensify its efforts. In practice, that means embracing accelerated abatement, which is estimated to reduce annual emissions to around 1.1 billion tonnes, around half of today’s figure. The immediate focus of accelerated abatement should be upstream operations, where around 60% of emissions savings are possible, in particular from increased use of renewable energy, through collaborative efforts supported by brands and retailers. Actions relating to brands’ own operations have the potential to deliver around 20% of the reduction, with the remainder coming from changes in consumer behaviour. By 2030, these efforts will need to have created a significantly reformed fashion landscape, in which, for example, one out of five garments are traded through a circular business model.

The good news for the fashion industry is that many of the required actions can be delivered at
a moderate cost. Around 90% of the accelerated abatement can be delivered below a cost of around USD50 per tonne of GHG emissions. Around 55% of the actions required will lead to net cost savings on an industrywide basis. The remaining actions will require incentivisation in the form of consumer demand or regulations to deliver abatement. Additionally, around 60% of the abatement will require upfront capital, where brands and retailers will need to support and collaborate with value chain players to invest for the long-term benefit of society and the environment.
 

The scale of change required implies a need for bold commitments. Stakeholders throughout the value chain should be willing to make bold commitments, followed by equally bold actions, transparency, collaboration and joint investment. Brands and suppliers need to step up engagement with policy makers, support the roll out of renewable energy and drive end-of-use collections for recycling.
 

Beyond 2030, the challenge becomes even greater. To stay on the 1.5-degree pathway, the industry needs to go beyond this vision of accelerated abatement to fundamentally redefine business models and current imperatives of economic growth and rising consumerism. For a prosperous future and an habitable earth, the industry’s ingenuity and creative spirit will be required to decouple value creation from volume growth and to move from commitments to actions.

Data & Impact Partner

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Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.

Data & Impact Partners

Opening Address

At GFA, we are all for making it happen and for shaping the agendas of all stakeholders. In fact, the aspiration to shape the course of change in the fashion industry is the reason GFA and this report exist. Imagine a fashion industry that is not only exciting and bountiful, but sustainable and inclusive as well. Imagine fair pay and secure work environments for everybody who works in fashion. Imagine a substantial reduction of resource consumption and emissions. Imagine innovative new business models that decouple growth from production and allow for self-expression outside of garment ownership. In short, imagine a fashion industry that has a positive impact on everyone and everything it touches.

Just imagination? On the contrary, we believe that the imagination is only the beginning of a possible reality if we dare to make new pathways and bear the challenges along the way. The fashion industry has the power to inspire top talent, engage fashion lovers, attract potent investors, and win the support of communities worldwide. It is a net-positive fashion industry that will continue to prosper despite disruptive forces that range from digitisation and automation to the coronavirus pandemic and geopolitical tensions.

The fashion industry is already advancing towards a more sustainable, more inclusive, and more resilient future, but the current efforts will not suffice to align the industry with the target to limit global warming to 1.5 degrees and achieve the Sustainable Development Goals laid out by the United Nations. But it’s not too late. It’s time for bold commitments, decisive actions, and rigorous follow-through.

As fashion leaders, you have the power to shape the course of change. You have the power to bring about a net-positive fashion industry that puts back more into society, the environment, and the global economy than it takes out. This report features the progress the industry has made so far. Many of the solutions and tools that fashion needs to improve already exist. It’s time to use them ambitiously. Now, as policies to promote a sustainable fashion industry emerge, it’s more essential than ever to take bold and urgent action. Think of this report as your companion on your journey. Dear fashion leaders, please join forces with your peers to create a meaningful change for a prosperous fashion industry. Indeed, if you do, everyone wins.

Federica Marchionni, CEO, Global Fashion Agenda

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Participate in the consultation

Fashion Industry Target Consultation

The Fashion Industry Target Consultation is a multi-stakeholder project led by Global Fashion Agenda and the UN Environment Programme to identify and converge existing industry aligned targets to establish a holistic industry route of travel towards a net-positive fashion industry.