Sustainability and Diversity Are Parallel Issues — and Here’s Why Fashion Can’t Recover Without a Fix for Both

tdonaldson and Tara Donaldson
·16 min read

Fashion might like to believe sustainability and diversity aren’t two sides of the same systemic issue, but the reality is, they are.

The root of the industry’s issues is exclusion. And a focus on profiting from people without humanizing them — which, consequently, could now see out-of-touch companies increasingly separated from their coveted capital.

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In this era of brands seeking to call themselves socially and environmentally conscious, it’s worth considering this: how sustainable can a company be if it’s only focused on the consumer narrative, that tale that tells of planted trees for every tee and fiber spun from corn husks into the gold standard of organic? And, by the same token, how diverse can a company be if it’s briefly highlighting Black designers but still mistreating the garment workers, the overwhelming majority of whom are people of color, in its supply chain?

Both are global — and systemic — issues the industry needs to address in ways that extend well beyond greenwashing and, what we can call amid the similar trend of making surface-level statements in support of diversity, often without the adequate, holistic commitments to change — colorwashing.

With each, companies have been made aware of the challenges and been forced to act in one way or another. For sustainability, fashion is being called to task for its strain on environmental resources, overproduction and waste, and it has responded with water-saving initiatives, emission-reduction goals and chief sustainability officers. On diversity, fashion was called out for its exclusion, lack of diversity at the leadership level and underrepresentative marketing. It responded in much the same way, albeit the center word in the C-suite title began, instead, with a “D.”

But these still-siloed entities within organizations will have to become part of a bigger corporate strategy commitment because fashion can’t successfully carry on without palpable progress on both.

“Often, these things go hand in hand, the environmental impact and the people impact,” said Áslaug Magnúsdóttir, founder of new-to-the-scene, made-to-order women’s fashion brand Katla and cofounder and former chief executive officer of Moda Operandi. “If we look at dyeing processes in the industry, they’re hurting the environment but they’re hurting people. And, unfortunately, we also know that this negative impact on the industry is affecting people of color more than it is other people, whether it is because they’re the ones working in the factories or they’re the ones living in the neighborhoods that are most impacted by bad environmental practices in the industry.”

Recent months have brought to light one reality about fashion: people of color haven’t had a seat at the table, whether upstream or downstream. Whether garment worker or designer. On both sides, these critical components of fashion’s progress are increasingly asserting their right to the same weigh-in as anyone else.

And in the midst of an almost-post-pandemic era, fashion, which has been rocked by the dampened demand resulting from store closures and shifting consumer priorities, will need a real fix to sustain its recovery. As brands and retailers have been reminded countless times, there’s a bottom line benefit to bringing more people and perspectives into the fold and ensuring — across the supply chain — that those people are considered.

“Ultimately, what the consumer wants is an authentic, honest brand to identify with, so for those who only focus on their downstream message and ignore their upstream relationships, I think that’s the first of several gaps in recovery for fashion,” said John Thorbeck, chairman of consultancy Chainge Capital. “It really attaches to the pre-pandemic problems. I think there’s been a lack of alternatives — the alternatives have been tried as a way to regenerate growth and profit: nearshoring, digitalization, personalization, store experience, new calendars, pricing, resizing or closing stores, automation, cutting skus or assortments, none of these have what it takes. These are only partial fixes to a system problem.”

What’s more, as Doug Stephens, a retail futurist and author better known as the Retail Prophet, outlined, success in the after COVID-19 era will require that brands and retailers fully realign themselves to address the system’s problems.

“Generally speaking, thriving in the post-pandemic era will demand that we see the pandemic not as a cataclysm but as a catalyst for positive organizational change,” he said. “The consumer, their expectations of retail, and the competitive landscape have all been irrevocably altered. We’ll expect more fluid, pleasant and human-feeling interactions online and far more inspiration, information and entertainment in stores.”

To do it means every retail company will need to become a content company, according to Stephens. “Content becomes the primary product. And that means that companies have to determine if they have the production skills and creative horsepower to develop and maintain a rich, daily stream of content that supports their archetypal positioning.”

And that means they’ll need compelling connections on both ends of the value chain — and that’s one area where fashion has been lacking.

Upstream, the global supplier community is now organizing itself in a fight for its rights and against the kind of buyer-led terms that left it vulnerable when the pandemic prompted brands and retailers to skip out on placed orders or push out payment terms, leaving factories that pay for things like fiber and fabric up front, starving for funds when COVID clamped down.

Suppliers in nine normally competing nations across Asia and beyond (Vietnam, China, Cambodia, Myanmar, Pakistan, Bangladesh, Turkey, Indonesia and Morocco) are banding together for the first time in a new initiative on “Manufacturers Payment and Delivery Terms.”

“The global supplier community sees itself as not just in service to Western retailers, but really needs a fairer balance and participation. The supplier community is not at the table.…How many times do you have the high-profile CEOs who are declaring their commitments to this or that but the supplier community is really not represented?” Thorbeck said. “You have all of these high-profile forums for sustainability, Global Fashion Agenda, the G7 Fashion Pact, but the supplier community is not represented. And I think that’s going to change — not just in terms of purchasing terms, but also in terms of more of a united and more balanced participation in recovery.”

Producers in the initiative, started by the STAR, or Sustainable Textile of the Asian Region, network, supported by GIZ Fabric Asia; the International Apparel Federation, or IAF, and the Better Buying Institute and announced in February, represent roughly two-thirds of global clothing and footwear exports, so it’s no small cohort to exclude.

“You can never really have a sustainable industry if you continue to have so much misuse of buying power,” said Matthijs Crietee, secretary general of IAF, which represents apparel associations and companies from more than 40 countries. That, he added, feeds transactional behavior and a kind of “what can I squeeze out of my supplier?” ethos that breeds an imbalance heavily in the buyer’s favor — again, leaving the makers, those traditionally marginalized or underrepresented, out of the room where it happens.

“A lot of the improvements that we want in this industry simply are inaccessible because where is the trust? Where is the money coming from to do investments in sustainability? If the prices that you get hardly, or not even, cover the costs of compliance of production, how can you expect to make improvements?” he continued. “If you make investments, but you also act as the bank financing your buyers’ collections because the payment terms are so long, then you actually have to spend the little margin that you get on financing costs. Where are the improvements coming from? If you really want the type of partnerships between brands and retailers and their suppliers, that requires a long-term vision, making improvements, making investments that, in the longer term, can help to increase revenue and improve margin. And you can only do that in the context of a more equal, trustworthy buyer-supplier relationship.”

That relationship, the same one that would see suppliers stocking extra fabric for the kind of quick replenishment that could facilitate the fluidity Stephens mentioned and lead to improved sales, is also what will help fashion players be nimbler, and better able to bring supply and demand into closer alignment more quickly.

It’s also the thing that will help companies curb waste — one among many of fashion’s issues Katla is trying to tackle with its on-demand manufacturing m.o.

“At the heart of what we’re trying to do at Katla is to minimize waste in the industry, and this is important both from an economic standpoint as well as from a sustainability standpoint,” Magnúsdóttir said. “I think we’ve all known for a long time that there’s so much waste in the industry, there’s 30 to 40 percent overproduction, on average, every season and tackling this problem makes a lot of sense financially but it also is critical from an environmental standpoint.”

The industry’s production process isn’t entirely dissimilar from a consumer buying a 30 to 40 percent surplus of groceries for their home every quarter. At some point (probably before long at all) after maybe donating some to neighbors and throwing out the rest, they’d start to buy less, try to get a read from those in the household about what they want to eat, how much they want to eat, whether they even like certain things. No one would continue to over shop and yield the same results for years. Or decades.

But now that COVID-19 has put fashion in a greater capital crunch, the industry has little choice but to get smarter — fast.

“I think [fashion companies] are really trying to rethink how they are manufacturing or addressing their consumers,” Magnúsdóttir said. “I realize that for companies that are already big and established, totally rethinking their supply chain is a huge issue and can take a very long time. But for Katla and other younger brands, I think it’s critical to think about this from the outset and try to design really a new way of producing and selling fashion.”

At Katla, that looks like getting a read on consumer data in the design phase; making quality, classic garments to order out of certified, sustainable materials, and labeling each garment with a tracking number consumers can search to find out the ingredients in their items as well as how and where each was made.

It’s creating a better supply and demand match and garnering greater loyalty among consumers.

“We are a direct-to-consumer brand, which means that we are getting immediate feedback from our customers and we are leveraging that. But, additionally, we are trying to draw from external data as well. Prelaunch [in January 2020] we had an area of the site where our customers could come on and react to different images and inspiration and so we learned about the things that they were reacting to through that and, over time, I really want to develop this more, this capability,” said Magnúsdóttir. “That was one of the great side benefits of the trunk show [at Moda Operandi], putting product on the site without having to take inventory we felt we could take risk in terms of designers and really try to discover new ones. By removing these inventory issues there’s a lot of freedom to do things.”

It could mean the freedom to feature smaller brands and designers (as Moda does), the kind that don’t always have the capital for scale or the access to big platforms to promote their product. Often, as reality bears out, these are designers of color.

While inventory and diversity opportunity don’t, on the surface, appear linked, allowing one to facilitate the other could prove the extra nudge for companies to more broadly improve on inclusion even if they aren’t inherently inclined to do the right thing.

Shelly Xu, founder of zero-waste brand Shelly Xu Design, or SXD, who counts former stints at Instagram, McKinsey & Co. and Prada, is rethinking what that “right thing” is for fashion, and tapping into the liberation from excess inventory and waste to embrace good design that’s good for people and planet and also just makes good business sense.

“Personally, just from traveling around Asia, I know how big a problem waste is,” she said. “And I feel like I’m in a unique position to solve it because when I look at a lot of Asian designs or Eastern designs, they start with the fabric and they start by acknowledging that we have limited resources on our planet. And then if you look at designs like the kimono, how it’s made, how it’s cut, it actually follows the flow of the rectangular fabric and thinks about how do you create this efficient garment that’s beautiful, versatile but also zero waste. And I just thought, ‘what if we can explode that idea and shift the way we think about creating clothing in a way that we actually address the limited resources that we have on this planet,’ so it’s about maximizing beauty under creative constraint rather than creating whatever way we want without thinking about constraints at all, which I think is how we design today.

“A lot of luxury brands are so led by design, which is awesome, but I started to think well, ‘what if we infuse a little more logic to it?’”

At SXD, Xu and her team are cutting the complexity out of clothing — as well as the cost. Fabric is upcycled, garments are simplified to reduce steps in sewing, no waste is waste and, so far, the brand’s jackets are “about 55 percent more cost effective.”

“It’s so crazy to me that waste is one of the biggest costs that goes into making clothes — fabric is one of the biggest costs that goes into making clothes yet we have so much fabric waste,” she said. “I actually think, in terms of getting over this slump and helping these fashion brands, a big part of it is to think about how do you use this waste [and] actually not see them as waste but really important resources that you can creatively use to make great products. I really think that this can be one of the key ingredients to helping people create the next generation of products.”

Downstream, it has been a win with consumers who like the design and designers who are sharing in SXD’s open source patterns. Upstream, climate refugees (those who have been forced to leave their homes because of the effects of climate change on their environment) in Bangladesh Xu uses in her manufacturing are making four times the local wage.

“For so long the cost advantage in fashion is just cheap labor — it’s like, ‘how do we maintain cheap labor so that we can produce things at a cheaper cost?’ And we are focused on creating a more humane way for cost advantage. I think a lot about how do we have better design, how do we have more efficiency in the manufacturing so we don’t have defects, all those other things that allow us to have that sustainable cost advantage instead of having to pay people so little,” said Xu, who has also taken particular note of the contributions garment workers have to make beyond pushing fabric through a sewing machine.

“There’s so much creative energy from other parts of the world that we’re not really using right now in the industry. I feel like there’s so much creativity and talent in Asia, from Africa, from all these other countries that I feel like have been ignored or usually are not seen as leaders in great fashion that I actually think we should harness that talent more.” (It’s the same thing designers from these regions are saying to fashion, too).

To do so would mean creating more opportunities for garment workers, considering their contributions, bringing them to the table. That’s one way companies begin to make diversity holistic, ingrained, normalized.

Just as approaching sustainability as a series of boxes to tick isn’t enough of a leg for fashion to stand on, nor will approaching diversity in the same manner.

“In 2021, you can’t still think of diversity as affirmative action — not that there’s anything wrong, diversifying is taking affirmative action, but it can’t be limited to doing it just to try to reach some level of 10 percent of this, that or the other,” said Michael Hardy, Esq., executive vice president, general counsel and one of the founding members of the National Action Network, one of the leading civil rights organizations in the U.S.

We are at a time, he said, where sufficiently diverse communities have the training, the education and the wherewithal — both upstream and down — to occupy positions of leadership and sit in decision-making roles.

“Just having faces or colors is not really what you need. To do diversity you really want to be figuring out how to normalize, if you will, the integration of qualified people in the industry,” Hardy said. “That helps the company raise its level of performance and normalizes the opportunities for people that can really benefit the company and can have the ability to access and compete for those types of managerial positions or leadership positions.”

It’s what Crietee also says of suppliers: “The best solutions to supply chain problems come from input of all the supply chain partners and not just one of the partners.…It’s also a question of the industry’s infrastructure being a little bit immature in this sense that [suppliers] weren’t represented because they have less resources.”

“If you’re not looking to diversify at that level then you are not looking out for the best interest of your company,” Hardy added.

Both sustainability and diversity have been uniting factors in that fashion has rallied around each with positive and purportedly supportive statements but, as Thorbeck notes, the last year has also amplified the degree of challenges the industry is facing “and the really poor performance against those challenges.”

“That hasn’t stopped the marketing language from changing and as U.S. brands, in particular, move to more social messaging, social branding, I think we’re in for a tidal wave of greenwashing,” he said. “And sorting out who are the committed and who are the clever is the atmosphere that we’re in and I think that that’s high-risk.”

For those in fashion that don’t grasp that change is a prerequisite to recovery, it may be a short road ahead.

“When we do finally emerge from this crisis there will be those companies who have used it reflectively to retool their businesses for the new era. There will be more that take nothing from the crisis and retreat to the comfort of ‘normal,'” Stephens said. “This key difference will separate those who thrive from those who cling to life.”

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