Does Fashion Take Sustainability Seriously?
Fashion sustainability is a complex, widely debated topic that demands deep analysis of all involved layers.
ESG, which stands for Environmental, Social, and Governance, is a set of criteria that measures a company’s sustainability and social impact. These criteria are used to evaluate how conscious and responsible an organization’s practices are in three main areas: Environmental, Social, and Governance.
The Environmental aspect refers to how a company manages the environmental impacts of its operations. The Social aspect involves managing relationships with employees, suppliers, customers, and the community. Lastly, Governance refers to a company’s corporate governance practices.
ESG criteria are important for companies that want to be seen as socially conscious and responsible. However, how does this apply to the fashion industry?
ESG in the Fashion Industry
The connection between ESG and the fashion industry is complex.
Fashion is one of the most impactful sectors in terms of sustainability, both due to the amount of natural resources it consumes and the enormous amount of generated waste. According to data from the European Parliament, the textile sector was the third largest source of water degradation and land use in 2020. It is estimated that textile production is responsible for about 20% of the global pollution of clean water from dyeing and finishing products.
The need for ESG practices in fashion is clear when considering the environmental, social, and governance impacts that the industry exerts globally. Despite technological advances and positive initiatives, the question arises: do ESG practices in fashion represent a true transformation or are they merely superficial?
Sustainability in Fashion
The fashion industry is the third most polluting industry in the world, only behind the fossil fuel and agriculture sectors. To give you an idea of the problem, according to Climate Trade, the fashion industry produces about 10% of global carbon emissions, more than all international flights and maritime shipping combined.
The need to reduce these impacts is clear. Practices such as reducing textile waste through recycling and reusing materials, using eco-friendly fabrics like organic cotton and recycled materials, and adopting more efficient and less polluting production processes can be solutions to mitigate the damage. However, the question remains: how far are companies willing to invest in real change?
Although there are companies that stand out for their sustainable practices, many are still superficial. The adoption of sustainable initiatives to improve brand image without truly committing to profound change is known as “greenwashing”, and it is more common than you might think.
According to data from World BIO Marketing Insights, in 2021, 60% of companies that claimed to have sustainable actions were actually using the greenwashing strategy. This practice not only deceives consumers seeking sustainable products but also hinders real progress towards sustainability.
Social Responsibility in Fashion
The social aspect within ESG is not much different. The term Corporate Social Responsibility (CSR) refers to a company’s responsibility towards the society surrounding it.
Ideal practices include ensuring fair and safe working conditions, offering fair wages, promoting diversity and inclusion, and investing in local communities. However, it is no surprise that some fashion brands are involved in scandals of abusive labor practices, such as slave labor and child labor.
After the collapse of Rana Plaza in 2013 in Bangladesh, where more than 1,100 workers died and about 2,500 were injured due to unsafe working conditions and corporate negligence, there was an expectation for a change in the stance of international brands regarding the safety and labor of their employees. But did this really happen?
Zara, Shein, H&M, and many others are just examples of brands that have been accused of exploiting their workers. Unfortunately, this reality is still present today.
Despite the existence of initiatives, the lack of transparency and unfair practices still prevail. Many companies are involved in “socialwashing”, selectively promoting their social actions while omitting persistent problems and harmful practices that continue to occur in less visible parts of their operations.
According to data from ESG Dive, 18% of private companies and 31% of public companies that engaged in greenwashing since 2018 also participated in social washing. To what extent are companies willing to sacrifice human rights and promote an abusive production chain in search of financial returns? Where do we draw the line between profit and ethical responsibility?
Corporate Governance in Fashion
Ethical corporate governance within ESG is essential to ensure that a company’s environmental and social practices are sustainable and responsible. Ideal governance practices include the publication of detailed reports on the environmental and social impact of the company’s activities. They also involve the implementation of strict ethics, compliance policies, the maintenance of independent and diverse boards of directors. Strong governance includes transparency, accountability, and adherence to rigorous ethical standards.
However, the sector faces significant challenges in implementing responsible and transparent governance. Many governance efforts are superficial and do not translate into real changes in the operations and corporate culture of companies. Without effective governance, environmental and social initiatives are mere marketing strategies. After all, if positive and correct actions are being taken, why not disclose them?
The Future with ESG
The adoption of ESG practices brings numerous benefits to fashion companies. These include building consumer respect and trust and attracting investors interested in sustainable businesses. Additionally, they involve complying with stringent environmental and social regulations, thereby avoiding fines and penalties.
However, the challenges are considerable. Implementing sustainable practices can be costly, particularly for small companies. Additionally, achieving true transparency in ESG practices can be difficult. Many sustainable initiatives are often superficial and inadequate to combat large-scale negative environmental effects.
The adoption of ESG criteria can transform the fashion industry, promoting a more conscious and responsible future. Fashion companies must move beyond superficial marketing and genuinely integrate ESG practices into their daily operations. But when will this change actually happen?
Learn more about sustainability in fashion in our article “Does Fashion Take Sustainability Seriously?“
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