The deeply rooted issues in the global fashion industry need solutions and collaboration that can disrupt the status quo. Significant positive momentum has emerged, for example, in innovative materials with lower environmental footprints, in small-medium sized companies breaking the traditional mold of linear business models and in multi-stakeholder collaboration to improve working conditions.
We all share a desire to create a fashion industry that allows people and ecosystems to thrive. But, what pathways have the most power to disrupt and transform, and does this include circular fashion?
The analysis by DRIFT shows that circular fashion does have a critical role in transforming the sector, but it also shows that there is room to improve our strategies. C&A Foundation has responded by increasingly focusing on facilitating the implementation of circular business models, as well as by thinking beyond the apparel sector in policy advocacy. In addition, Fashion for Good will build more processes that connect mainstream and niche players, so that innovation has a better chance of moving beyond experimentation in the margins.
1. How can we strengthen our collaboration with other actors to create the conditions for transformational alternatives to scale?
2. What positive dynamics of change are happening outside of the European context that we can learn from and utilise?
3. How can circular economy promote equity and inclusion in the fashion industry?
All of these questions have a common theme - additionality. We have an opportunity to build bridges between different areas of sustainability, in different geographies and in different parts of the value chain. We hope that this report provides inspiration to find more ways to work together to accelerate the transition to good fashion.
The global fashion industry has developed into a highly complex system entrenched in economic and physical structures, cultures and practices that enable fast and large- scale production of apparel and provides employment to millions across the world. Within this system, a myriad of persistent challenges has emerged over the last few decades resulting in negative environmental impacts and severe social issues. Private, public and civil society actors have condemned these issues, and the movement towards a more sustainable fashion industry is growing with increasing pre-competitive collaboration and a broadening variety of alternative practices, materials and business models that pave the way for the fashion industry of the future.
So far, however, sustainability efforts in the industry have not yet managed to add up to a transformation of the fashion system, and the fashion industry shows signs of initiative fatigue and slow progress. There is a need to understand how initiatives are reinforcing or challenging the status quo and how collective efforts in the industry can more effectively add up to transformative change.
The deeply-rooted issues in the global fashion industry call for solutions that fundamentally challenge the current status quo. For this reason, C&A Foundation and Fashion for Good asked DRIFT to develop a systems change map to better understand the dynamics of change from a transitions perspective and to provide recommendations for transformative change towards a regenerative and restorative fashion industry.
Transitions are large-scale shifts in societal systems that happen over decades, in societies that face complex and persistent problems due to historical path dependencies and lock-ins. Based on scientific research on transitions, we can see transitions as non-linear and relatively uncontrolled shifts result from the interaction between increasing societal pressures, internal crises and competing alternatives (eg punk). It usually takes decades for such pressures to build, after which, in a relatively short period of time (a few years), the status quo is disrupted, a fundamentally different way of thinking, doing and organizing becomes dominant and the system reaches a new equilibrium.
Transitions cannot be predicted, planned or managed with management approaches, as they emerge from complicated adaptive societal systems. However, it is possible to anticipate upcoming opportunities, create fruitful conditions for change and reinforce developments that together can influence the direction and speed of a transition. In order to do this successfully, we have to be careful not to isolate or over-simplify either the persistent problems the fashion industry faces or the strategies used to address them. To understand where and how to intervene to foster transformative change, we must first acknowledge the complexity of the system.
The fashion system is analyzed on three levels: the regime or dominant culture, structure and practices, including the root causes of persistent problems; landscape influences that reinforce or challenge the status quo; and niche developments experimenting with alternative ways of doing, thinking and organizing
The fashion industry is a huge economic engine and its supply networks span the globe. It is the third biggest manufacturing industry (after automotive and electronics) generates over 1.5 trillion euros annually and employs an estimated 60 million people worldwide.
over 100 million households depend on the cotton industry for their livelihoods. If the textile industry were a country, it would be the seventh largest based on GDP. Because the industry is relatively easily accessible to low-income countries and generates employment opportunities and income, it is often described as ‘an engine for global development
global clothing production and sales have doubled between 2000 and 2015, with the number of garments produced annually surpassing 100 billion in 2014. In other words, the fashion industry is not only large, it is also growing rapidly. The dominant regime can be broken down into three elements: culture, structure and practices. These three aspects of the regime include institutions, social conventions, socially accepted behavior, laws, policies and infrastructures, which together compose and define the fashion system.
The fashion market is highly competitive and demand is growing for increasingly low-cost products in large quantities. This results in a continuous and accelerated race to the bottom. Yet company profits must grow, which for a large part of the industry, means the number of items sold must increase. To meet these demands, a significant part of the industry has developed and perfected the ‘fast fashion’ model over the last decade, which has transformed the seasonal turnover in fashion into a constantly changing stream of trends and new products. The dominant business model builds on the assumption of infinite growth. Many brands and retailers argue that the inertia of the industry is due to the lack of consumer willingness to pay for sustainable products, and the rising demand for affordable clothing supports this claim. however some observe a underlying demand for guilt-free consumption, and international surveys report that 55% of people are willing to pay more for more sustainable clothing. However, research also shows that there is a considerable gap between sustainability intentions and behavior.
From a consumer perspective, clothing transcended its function as a basic need centuries ago. The way we dress and where we shop both signify and shape personal and group identity and culture. At the same time, consumer choices are influenced by marketing images that brands and retailers publish across a wide variety of media and in public spaces, promoting new products and trends. The short time horizon of trends and style-driven purchases leads to the consumer ‘need’ to continuously renew products. Producers and consumers treat garments as disposable products, which is shown by the trend of declining clothing utilization.
Structure
The fashion industry is characterized by mature production technologies1 and its physical infrastructure is based on a linear production and consumption process. The industry extracts a large amount of natural resources, and products mostly end up in landfill or incineration after use. Less than 1% of apparel waste is recycled into material for new apparel.
The fashion industry is highly divided, anonymous and globalized. The 10 biggest brands and retailers have a joint 10% global market share, and the top 10 suppliers in China have 8% national market share. The fashion industry involves numerous small and medium-sized enterprises (SMEs) throughout the value chain. This fragmentation problematizes collective action. Furthermore, traditional retailers are increasingly struggling to compete in the current market (especially compared to online retailers), leading to an estimated closing of almost 10,000 stores in 20179.
Power imbalances exist within the supply chain, between governments and companies, and between the global north and the global south. However, the levels of consumption in the global south are soon expected to outgrow those in the global north
In other words, the north-south divide of consumers versus producers no longer holds. Nevertheless, the knowledge-intensive part of the value chain is still largely concentrated in the global north, while the labor-intensive part is based in the global south
In recent years, manufacturers and suppliers in Asia have consolidated (especially in China), thereby growing more powerful within supply chains. According to one of our interviewees, most Asian manufacturing entities are multinationals that manufacture in very large volumes. They are in a position to invest and differentiate themselves. Some manufacturers even purchased their customers and are selecting who they do business with. However, some other nations in the global south – such as Bangladesh and Cambodia – depend largely on the garment industry for employment and economic opportunities. There is lack of regulation on environmental standards and little enforcement of labor regulation of the industry in most (consuming and producing) countries. Although there is increasing EU regulation in the health and safety domain, such as in the use of chemicals.
In response to the lack of enforcement or regulation, the private sector and civil society are working more closely to create, non-binding and in some cases, binding agreements to address the issues. The most notable example followed the Tazreen and Rana Plaza factory tragedies where brands and local trade unions formed the legally binding ‘Accord on Fire and Safety in Bangladesh’ The short-term business strategy in much of the industry is one of lower prices and higher turnover. As a result, manufacturers have to be increasingly flexible in switching from one product to another. The traditional design- to-sales process needs almost two years, but the fast fashion model needs four months. This leads to manufacturers subcontracting and making excessive overtime. This business model is prone to the exploitation of manufacturing workers resulting in issues like poverty-line wages, severe health and safety issues and worker repression.
The production of garments depends heavily on the intense use of non-renewable resources (e.g. fossil fuels) and intensive farming practices (e.g. using GMOs, fertilizers, pesticides and high volumes of water). There are also many externalities produced throughout the value chain (e.g. greenhouse gas emissions, freshwater contamination, over-extraction of groundwater) that are partly a result of meeting the prices demanded by much of the market.
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