Stop talking triple bottom line and start business as a force for good: a look at the fashion industry

Europe's World

Climate & Energy

Picture of Megan McGill
Megan McGill

Programme Manager for Circular Transformation at the C&A Foundation

John Elkington famously coined the term ‘triple bottom line’ in 1994 and, nearly 25 years later, infamously asked for it to be recalled. He argued that its original intention – the ‘transformation of capitalism’ – had completely fallen short. While there has been a major growth in sustainability efforts, businesses continue to focus on incremental change. 2030 seems like a more unrealistic date for the achievement of SDGs with each passing day.

This is certainly evident in the fashion sector. For example, apparel and footwear account for an estimated 8% of global climate impact (almost as much as the European Union’s climate impact). If its current trajectory continues, the fashion sector will use an estimated 26% of the world’s carbon budget associated with a 2°C pathway. And although it provides jobs to millions of women and men in developing countries, these jobs are often in exploitative and hazardous conditions.

If the industry is to become socially inclusive and fulfil its aim to protect the natural environment by decoupling resource use with growth, then it needs a new storyline – one that stops merely talking about reducing negative impact to one that actively merges economics with sustainability.

There are three strategies that can make this transformation a reality. Each strategy creates a system of feedback loops that enables positive action to be taken by companies, workers, civil society members and policymakers. First, they can operate at company level, by moving from linear to circular business models. Second, they can operate at industry level, through the public disclosure of data that can be used to hold decision-makers to account. And finally, third, they can operate at the public level, through enforcing and changing governmental policy.

On the company level, the fashion business model is currently oriented around the goal to sell as many products as possible, and for a significant part of the industry, at the lowest possible price. It’s a largely linear system that involves the endless extraction of virgin materials followed by manufacturing carried out at such low cost that it often translates into unacceptable working conditions and environmental degradation.

The opacity of business practices in the fashion sector makes it near impossible … to ensure both labour rights and the protection of the environment.

If, on the other hand, there were an incentive to sell as many uses of a product as possible, then a cycle of continuous improvement in product design, manufacturing standards and product recovery would be created. Eventually, a circular business model replaces a linear business model, and we start to see the absolute decoupling of resource use and growth.

We are starting to see transformations in the industry, with small to medium-sized companies (SMEs) like Rent the Runway – an online fashion company that rents out designer clothing – leading the transformation. The global innovation platform, Fashion for Good, has scouted over 50 start-ups that offer platforms or services that enable the implementation of these circular business models.

At the same time, a handful of the largest industry players are partnering with organisations like Ellen MacArthur Foundation, Circle Economy, London Waste and Recycling Board, QSA Partners, Forum for the Future, World Resources Institute and WRAP to start their journey towards developing circular business models.

As for the industry level, Peter Drucker’s famous saying, “you can’t manage what you can’t measure”, holds true when trying to change the practices of a whole industry. Transparency, or more specifically, the public disclosure of data that can be used to demand specific changes, is more relevant than ever. The opacity of business practices in the fashion sector makes it near impossible for interested parties, (of which the brands are often inclusive), retailers and manufacturers to ensure both labour rights and the protection of the environment.

There are notable examples of how transparency can lead to measurable positive outcomes. One such example is the Bangladesh Accord on Fire and Building Safety, where fire and safety inspections and corrective action plans are publicly disclosed, with more than 90% of safety issues being corrected as a result. Another noteworthy example is Canopy’s annual public ranking, which ranks the world’s top rayon-viscose producers on the basis of the progress they have made thus far on eliminating endangered forests from their supply. The sustainable sourcing of the viscose fibre market has consequently increased by 80%.

If the fashion sector continues to prioritise incremental improvements over transformational change, it will overshoot planetary boundaries

The potential for transparency to create transformative change is vast, but only if used strategically. One-off publications of aggregated data are not enough to be able to demand specific changes. Sarah Ong, Programme Manager for Labour Rights at C&A Foundation, explains that data should be disaggregated, cover a significant part of the market and be kept up-to-date. All of these criteria should be met for transparency to effect change.

Finally, on the public level, moving from single positive actions to industry-wide change requires effective governmental policy and the enforcement of existing policy. However, advocacy journeys are long and regularly require agility and flexibility.

For example, the UK Parliament’s Environmental Audit Committee recently created strong momentum towards supporting the fashion sector’s transformation through a number of legislative recommendations, such as an extended producer responsibility scheme, mandatory environmental targets, tax incentives that slow down product obsolescence and, finally, in strengthening the implementation of the Modern Slavery Act. The UK government, however, rejected all the Committee’s recommendations, leaving much advocacy work to be done.

Fortunately, there are more positive signs at the EU level. For example, the European Commission has been engaging with expert organisations to create a circular textiles strategy. Furthermore, the recently announced 2019-2024 agenda highlights the benefits of a circular economy. An initiative led by Anti-Slavery International to create a pan-European approach to tackling forced labour and child labour in supply chains is successfully moving the issue up the agenda of European Parliament Committees, and Members of Parliament are voting in favour of recommendations for improved trade policies and supply chain transparency and due diligence.

Going forward, if the fashion sector continues to prioritise incremental improvements over transformational change, it will overshoot planetary boundaries and may never deliver on fair working conditions and living wages. Just as with climate change, the strategies for turning business into a force for good are there; it’s merely a question of courage. The industry must dare to challenge itself and disrupt the status quo.

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