01
Keynote: The State of Fashion 2019
Jenny Cermak, McKinsey & Co
“Sustainability” is trending - but we still need to define what that means.
Three of BoF/McKinsey’s 2019 trends are directly related to sustainability
‘The end of ownership’
‘Getting woke’
‘Radical transparency’
No one knows industry insight like BoF and McKinsey, with The State of Fashion reports a fixture for understanding shifts in the fashion and retail landscape. Jenny Cermak of McKinsey & Co took Legacy Summit delegates through the most recent findings.
“Uncertainty” is one of the keywords CEOs have been using to describe the fashion and retail industries in the past 3 years; a state of constant volatility has been accepted and executives have moved towards a more proactive stance, with a growing appetite for sustainable development and innovation. As Jenny explained, business “must be able to stand for something. It’s an expectation, not a differentiator.”
Of the top 10 trends identified in the BoF x McKinsey report The State of Fashion 2019 three are directly related to sustainability. “An increasingly important priority is sustainability and transparency, reflecting rising concerns on the part of consumers and companies about how to alleviate their impact on the environment.
Sustainability, which for the first time breaks into our respondents’ list of the most important challenges, is evolving from a tick-box exercise into a transformational feature that is engrained in the business model and ethos of many recent success stories.”
The End of Ownership
The lifespan of the fashion product is becoming more elastic as pre-owned, refurbished, repair and rental business models continue to evolve. Fashion players will increasingly tap into this market to gain access to new consumers seeking both affordability and a move away from the permanent ownership of clothing.
Getting Woke
Younger generations’ passion for social and environmental causes has reached critical mass, causing brands to become more fundamentally purpose driven to attract both consumers and talent. Consumers from some, but not all markets will reward players that take a strong stance on social and environmental issues beyond traditional CSR.
Radical Transparency
After years of having personal data owned and handled by businesses, a more distrusting consumer now expects companies to reciprocate with radical transparency and sharing of information. For companies to meet a new bar for consumer trust, they will need to offer a heightened level of transparency along dimensions such as value for money, creative integrity and data protection. Despite a growing awareness there is an overarching understanding that the concept of a “sustainable” industry is complex, with a need to remove ambiguity around the implications and benefits of investing in this area in order for big companies to drive lasting change.
Find the full BoF report at: https://cdn.businessoffashion.com/reports/The_State_of_Fashion_2019.pdf
02
Conversation: Heating up: Climate change & the fashion industry
Dr Martin Rice, The Climate Council & Kit Willow, KITX
To reduce global heating scientists and creatives must collaborate.
Climate change is not a problem for the future, it’s happening now
We are still trending towards catastrophic 3.1 degree climate heating
We need to be carbon neutral by 2030, and by 2045 need to be taking CO2 out of the atmosphere to ensure the planet is still liveable by 2100
Global fashion industry accounts for more CO2 emissions than shipping and air travel combined
The creative industries have the skills to approach problems differently
Dr. Martin Rice and Kit Willow, both passionate climate activists, have very different backgrounds but both believe that science and creativity must combine forces to change the future. In a conversation led by by Clare Press they discussed how the fashion industry impacts climate heating, the responsibility it has to minimise that impact - and how it can inspire and drive positive change.
Acknowledging that the fashion industry creates significant CO2 emissions, they agreed on a need to act both globally and locally - as we are still on track for the 3.1 degrees heating that the Paris Agreement states would be catastrophic.
https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
“By 2030 we need to be carbon neutral, and by 2045 we need to be carbon absorbing to prevent disaster. It’s an emergency now for the future. You can take the disillusion pill and pretend it’s not real - or face reality and do something about it.”
— Kit Willow, KITX
Kit is driven by the knowledge that “by 2030 we need to be carbon neutral, and by 2045 need to be taking CO2 out of the atmosphere to ensure the planet is still livable by 2100”, and says we can “take the disillusion pill and pretend it’s not real - or face reality and do something about it.”
With raw materials creating the biggest impact in the KitX supply chain, she prioritises materials with a low carbon footprint - which means avoiding virgin nylon and polyester in particular as their production releases toxic nitrous oxide.
Dr. Rice believes that the creative industries have a huge role to play in inspiring positive change. “It’s cutting edge, it’s creative, you (the industry) have the skills to create those solutions.”
He also reminded us that one of the easiest changes to make is ensuring your business to be powered by a clean energy source - so if it’s not yet, make the switch now.
03
Keynote: Driving positive impact: Developing a best practice ethical sourcing program
Jaana Quaintance-James, THE ICONIC
Eight learnings from The Iconic to implement transformation to more sustainable practices
The Iconic launched an ambitious 2020 strategy, establishing minimum standards for their own suppliers and that of their stable of over a thousand third party brands.
So far they have mapped their supply chain, audited 100% of their Tier 1 factories and publicly listed factory details to elevate transparency.
Jaana Quaintance-James, Head of Sustainability & Ethical Sourcing at The Iconic has been integral in driving transparent, future-focused sustainable practices at the Australian digital fashion platform.
The Iconic launched an ambitious 2020 strategy establishing minimum standards for their own suppliers and that of their stable of over a thousand third party brands.
Taking a collaborative approach engaging multiple stakeholders the programme is designed to take responsibility for delivering positive impact to garment makers whilst reducing its shared environmental impact.
So far The Iconic has mapped their supply chain, audited 100% of their Tier 1 factories and worked with them to fix critical issues where possible. Jaana highlighted the challenge of ensuring people across the supply chain prioritised the same outcomes, and explained that The Iconic was spending time on the ground and investing in training of suppliers. In cases where issues were not able to be resolved factory ties were cut.
“We’re looking in the mirror and taking responsibility.”
— Jaana Quaintance-James, THE ICONIC
Jaana shared eight key lessons for brands undergoing transformation to consider:
Engaging leadership is the key to success: Every person is motivated differently so need to identify what drives individual stakeholders to invest in change.
Internal engagement: Better practice must be supported throughout the business, as the internal team make the day-to-day changes.
Ongoing due diligence: Don’t accept info on face value, be relentless in due diligence, commit to continuous improvement.
Go beyond audit: Consider the quality of audit/auditor and remember that it’s only one part of the toolbox.
Invest in the right people: Sustainability is specialist discipline, not a random add on.
Look in the mirror and take responsibility: Set realistic timelines/standards/expectations to stay on track.
Transparency: The Iconic is delivering a new level of transparency and recently publicly released details of their private label factories.
Continue to innovate, have an open mindset and keep learning. Organisational systems have constant room for improvement.
Jaana noted that customers now expect transparency - and that she believes they should expect it, as sharing the choices made gives customers confidence that a business is willing to be held in account for those choices.
03
Conversation: Sustaining artisan communities through genuine brand partnerships
Caroline Poiner, Artisans of Fashion, Jacqueline Wessels, MIMCO, Yatu Widders Hunt, Cox Inall Ridgeway
Artisan-brand partnerships are sustained through transparent, community-driven collaboration.
The artisans sector intersects with issues around the environment, social justice and our global diversity.
When working with artisan maker communities the approach needs to be community first, transparent and respectful, with the goal of a long term partnership.
The act of garment making ethically and sustainably is a 60,000 year old practice for Indigenous artisans.
Caroline Poiner, founder of Artisans of Fashion, Jacqueline Wessels, Production Manager at Mimco and Yatu Widders Funt, founder of Australian Indigenous Fashion and consultant at Cox Inall Ridgeway joined Clare Press to discuss how brands can work with artisan communities in a responsible manner. The panel agreed that when working with artisan maker communities the approach needs to be community first, transparent and respectful, with the goal of a long term partnership, engaging artisans in all parts of the process, including the storytelling and PR.
Caroline explained why working with artisans needs to be engrained through the business model:
“The artisans sector intersects with issues around the environment, social justice and our global diversity. We want to encourage people to embrace the concept of co-creation and respect the cultural integrity of traditional craft techniques. This respect needs to be taken on by the brand as part of what it represents long term, not just as an add-on to a single collection.”
Having worked with artisan partners since 2014, Mimco’s production manager Jacqueline spoke about the importance of approaching artisan supply chains as collaborative long term partnerships, not merely capsule collections.
”It’s about creating ongoing and consistent work for communities.”
Mimco proudly develops ~5 styles per season that are artisan led, creating consistent and ongoing work for their artisan partners.
Yatu shared her broad experience in ensuring cultural competency in projects involving Indigenous peoples, highlighting the importance of authentic collaboration.
She explained that mutual respect comes from an approach is community first, with a transparent and open conversation.
“The spirit of co-creation is central to the way Indigenous communities work together. As a brand you need to define WHY you want to work with Aboriginal peoples, then open a dialogue about process, not outcome.”
— Yatu Widders Hunt, COX INALL RIDGEWAY
She also reminded us that artisan communities are the pioneers of responsible production:
“The act of garment making ethically and sustainably is a 60,000 year old practice for Indigenous artisans.”
04
Keynote: Promoting decent work & improving the lives of garment workers
Eliza Ward, Ethical Trading Initiative, UK
Keeping human rights at the core of decision making.
The Rana Plaza disaster was not an accident - it was a systemic failure
Workers did not have the power to say no to going into the factory
90% of garment workers are not able to unionise or negotiate their own wages
The ETI Basecode is an international code of labour standards, based on the UN Guiding Principles on Business and Human Rights (UNGP’s)
The ETI Due Diligence Framework is an approach to due diligence that is holistic, inclusive and cost effective
Introducing Legacy Summit delegates to the ETI Basecode and the ETI Due Diligence Framework, Eliza highlighted that human rights disasters such as Rana Plaza are not accidents - they are systemic failings.
Workers did not have the agency to unionise and refuse to return to work in unsafe conditions. She explained that the Modern Slavery Act has caused many consumer facing businesses to take stock of their supply chains, and reiterated the need to keep “the intended beneficiary”, the worker, at the core of action on labour conditions.
The ETI Basecode is an international code of labour standards, based on the UN Guiding Principles on Business and Human Rights (UNGP’s). The ETI Due Diligence Framework is a four step process for businesses to identify and act upon actual and potential human rights risks for workers - an approach to due diligence that is holistic, inclusive and cost effective.
We need to assess actual and potential human rights risks by:
Identify leverage, responsibility and actions
Mitigate risks and provide remedy for workers
Monitor, review, report and improve
“The Rana Plaza disaster was a systemic failure. Workers did not have the agency to unionise and refuse to return to work in unsafe conditions.”
— Eliza Ward, ETI
05
Conversation: New business models shaping the future of fashion
Fanny Moizant, Vestiaire Collective, Dean Jones, GlamCorner & Bryce Alton, Nudie Jeans Co Australia
Secondhand shopping, RTW rental and clothing repair are changing the game
Resale will be bigger than the fast fashion industry in the next 10 years
Vestiaire Collective predicts secondhand is set to be 33% of our wardrobes by 2027
GlamCorner says on average women wear only 40% of what they own
Nudie reports repairing 55,173 pairs of jeans in 2018
As we reject throwaway culture and adopt flexible ownership across industries the way we acquire, access and engage with clothing is changing too. Disruptive fashion business models better suited to the needs of contemporary wardrobes are changing the game - and they’re big business.
Fanny Moizant, Co-Founder of Vestiaire Collective, Dean Jones, CEO & Co-Founder of Glam Corner and Bryce Alton, CEO of Nudie Jeans Australia joined Melinda Tually in conversation to explain how they’re reshaping the future of fashion with fresh takes on the challenges of overconsumption with three different approaches: secondhand, rental and repair.
On a mission to change our perception of value, Fanny shared that consumer education has been integral to Vestiaire Collective’s success.
“My mother would buy, wear and treasure a jacket for 15years, but my generation would buy one every season. We’re teaching people to redefine value.” It looks like we’re learning fast: Resale will be bigger than the fast fashion industry in the next 10 years, and second hand is set to be 33% of our wardrobes by 2027.
As for the rest? We might not own it at all. The fashion rental market is exploding, having evolved far beyond tuxedos.
Dean shared the journey of Glam Corner so far, explaining how giving people access to designer items at fast fashion price points bodes well for a lower-impact fashion industry. While contemporary clothing rental is still early stage Dean has already seen attitudes shift, with people warming to renting everyday styles as well as special occasion pieces. This opens up new categories and design opportunities specifically for the rental market.
One item we probably won’t be sharing are our favourite jeans - so what to do when a seam splits or a patch wears thin? Reminding us that loved clothes last, Nudie Jeans have brought repair back in a serious way, with in-store repair shops across the globe and the Re-Use program giving old jeans new life.
Bryce explained how Nudie has innovated to make the repair process part of the brand, educating both staff and customers along the way to change attitudes towards the lifetime value of garments.
Nudie reports repairing 55,173 pairs of jeans in 2018 - see more at www.nudiejeans.com/blog/how-many-jeans-did-we-repair-in-2018.
“We don’t want the words ‘throwaway’ and ‘denim’ used in the same sentence.”
— Bryce Alton, NUDIE JEANS
After having her two daughters, Moizant was inspired to start her own company. She came up with the idea to launch Vestiaire Collective after observing French fashion bloggers selling their out-of-season designer clothing, to reinvest in new, fashionable items.
Moizant quickly saw a need for a dedicated platform for fashion lovers to buy and sell their pre-owned items in a smart, inspirational and trusted way.
“We’re teaching people to redefine value.”
— Fanny Moizant, VESTIAIRE COLLECTIVE
06
Keynote: Beyond Compliance: Addressing prevailing trends in the garment sector
Kevin Franklin, ELEVATE, Hong Kong
Brands need to look beyond auditing to ensure compliance to ethical standards
Fashion businesses cannot rely solely on audits to ensure factory compliance with ethical standards
Margin pressures drive more, and new, unethical practices
There is still a lack of true transparency
Dr Kevin Franklin of leading global sustainability solutions provider Elevate joined Legacy Summit to deliver an uncomfortable truth - fashion businesses cannot rely solely on audits to ensure factory compliance with ethical standards, and the pressure to deliver ever-faster and ever-cheaper does little to disincentivise unethical practice.
“Margin pressures drive more, and new, unethical practices. We need to utilise tools and techniques that go beyond audit to build trust, motivate and empower factories to take responsibility, not just respond to pressure from the top down.”
A lack of true transparency still remains in supply chains, and the extent to which factories are open about accurate wages, working hours and related data can undermine the effectiveness of auditing.
Dr. Franklin explained that while there are positive trends (~60% of factories in China are considered “transparent”, and ~70% in India) there is still high potential for obscurity. Margin pressures are driving unethical behaviours.
While it is good news that average wages have increased and working hours have decreased over the past five years, this squeezes margins for factory owners. This can lead to unauthorised subcontracting, under payment of social security and increased use of casual migrant labour - a sector where humans rights abuses tend to be higher.
Dr Franklin shared invaluable insights, detailing unethical profit-seeking techniques to look out for and data that demonstrated factories with more ethical practices had better business outcomes, as assessed through techniques including worker engagement and anonymous surveys of workers.
A positive outcome? Factories where workers subjectively (and anonymously) reported that their supervisors yell and communicate poorly had far worse productivity than factories where supervisors and workers had a respectful relationship; a win-win that is hard to argue with.
For maximum impact Dr. Franklin recommended brands segment their supply chains to identify factories of high risk, and start to enforce change where they have high leverage.
“Margin pressures drive more, and new, unethical practices. We need to utilise tools and techniques that go beyond audit to build trust, motivate and empower factories to take responsibility, not just respond to pressure from the top down.”
— Kevin Franklin, ELEVATE