This newsletter is about the fashion world needing to embrace the challenge of transforming into a more sustainable industry.
First Prada in November. Then Moncler just 3 weeks ago. And this week, Ferragamo.
All of these luxury brands have signed sustainability-linked loans.
This newsletter, and our industry as a whole, dives deep into the materials and supply chain sides of sustainability in fashion. But what about the financial side of things? We’re naturally attracted to win-win scenarios, where you can both save money and help the environment, but what about leveraging the world of financing and capital to help drive better behaviors.
We’re intrigued by these debt instruments, which tie variable interest rates or access to revolving debt to achieving sustainability targets. It’s really no different than getting a better credit card for demonstrating responsible behavior.
The details of the Prada deal were specifically:
in November 2019, Prada became the first fashion company to sign a fiveyear €50 million SLL, with Crédit Agricole Group, under which Prada can pay a reduced interest rate if it achieves targets related to the number of stores assigned LEED Gold or Platinum Certification, the amount of training hours employees receive, and the use of Prada Re-Nylon (regenerated nylon) in the production of goods.
It’s exciting to see the less exciting, consumer-facing side of the fashion world also adapting to building a more sustainable future.
Money has been said to sometimes talk ☺️….
The Embrace Team
Commitment or marketing: is there really an ethical awakening in the fashion industry? (Equal Times)
In 2013, when Rana Plaza collapsed, many issues associated with unethical practices of the fashion industry were exposed to the public eye. This article names it to be "the year zero of the ethical awakening in the garment industry":
Seven years later and marketing hype has smothered any good intentions. At the same time as the major brands present their new ‘conscious and sustainable’ collections, they continue to put pressure on suppliers to lower their prices – pushing down wages in the process.
When the current health crisis put "pause" on the fashion production, store closures and order cancellations created a “domino effect” that eventually is hurting garment workers in developing nations.
Faced with strong international pressure, some brands stepped up and promised to pay what they owed, but others – 40 per cent according to the Business and Human Rights Research Centre – looked the other way. The health emergency has exposed the seams of inadequate changes in the industry, once again showing that respect for human rights rests on more than just a good advertising logo.
2020 is a year that has shaken the foundations of the fashion industry. Hopefully, in the aftermath of the current crisis a more responsible fashion system will be rebuilt.
Salvatore Ferragamo Signs Sustainability-Linked Credit Agreement (WWD)
Following Prada and Moncler, another Italian luxury brand has procured a sustainability-linked deal. Salvatore Ferragamo's five-year loan for a maximum amount of 250 million euros was granted by Intesa Sanpaolo SpA, with repayment terms conditional to meeting company’s key sustainability targets.
Are Digital Fashion Shows Better For The Environment? (British Vogue)
This summer we witnessed the first digital weeks for men's, resort, and couture collections, and many industry professionals questioned whether the virtual format is a valid eco-friendly alternative to the extravagant spectacles that the fashion industry is known for.
According to data reported by Ordre earlier this year, the fashion industry emits 241,000 tonnes of CO2 a year just from travel costs associated with the quarterly fashion months, an equivalent of the electricity used to light up New York's Times Square for 58 years. With no or limited amount of physical guests attending fashion shows this season, one may think that virtual fashion events are a more sustainable option.
This article brings to light the fact that we know little about the true environmental impact of digital fashion weeks and virtual events. The carbon footprint tracking of upcoming digital Helsinki Fashion Week may provide some answers:
"The preparations are much heavier in carbon footprint during the digital event than the physical events. If you look at only the carbon footprint, then the digital has a larger footprint than the physical. But if you take into consideration how many [people] can attend a digital fashion week, then the carbon footprint is substantially lower.”
Shame Fast Fashion Brands – Not the People who Buy their Clothes (Byline Times)
Through our clothing behavior, we can either conform to the "norm" or differentiate ourselves from the rest. Is there such a thing as a class snobbery when it comes to fashion? Not in terms of "fast vs luxury fashion", where people indicate a social class they belong to based on the brands they wear, but in terms of "fast fashion vs slow fashion".
This piece highlights the fact that there is some class snobbery involved with wearing "ethical, environmentally conscious fashion". Higher prices associated with "slow fashion" mean these items can be out of reach for lower economic classes. However, throwaway culture is increasingly common among more economically-prosperous consumers, who can shop more frivolously. Should we shame those who wear fast fashion and throw away clothes or the "greedy" corporations are to be blamed?
The “smart side of fashion”: Vestiaire Collective's first bi-annual report (Fashion United)
French resale platform Vestiaire Collective has debuted its first bi-annual report called “The Smart Side of Fashion”. As stated in the report, the following three trends emerged in the first half of 2020:
the taste for vintage (Vestiaire Collective noted the boom in Prada, but also the revival of Jean-Paul Gaultier and Margiela)
the search for sustainability (for brands with a strong ad hoc DNA such as Stella McCartney or Vivienne Westwood)
the quest for safe and therefore sustainable values, which have been embodied in particular on the platform by the success of luxury watches (Omega, Rolex).
The report also reveals a consumer mindset shift towards "more classic, well-made items that will stand the test of time style-wise, and prove to be savvy investments for the future."
New System Offers Brands Data on Sustainable Cotton-Growing Practices (Sustainable Brands)
In response to growing consumer demand for traceable cotton, a new data-led sustainability program for responsibly produced US cotton was designed.
Coming out of its year-long pilot phase, now the U.S. Cotton Trust Protocol is ready to take on brands and retailers. Approved by Textile Exchange, the system will provide access to aggregate year-over-year data on water use, greenhouse gas emissions, energy use, soil carbon and land-use efficiency.
To meet consumers’ skepticism head-on, the Trust Protocol has also ensured that its data is verified by an independent third party: The Trust Protocol has partnered with Control Union Certifications North America to implement an on-site verification program, to insure that the metrics that brand and retailers receive are accurate.
How Consumer Nudging Can Solve the Plastic Packaging Waste Crisis (INSEAD)
According to this research study, it is possible to eradicate plastic pollution with digital technologies, but a major change in consumers’ behaviour towards plastic packaging waste is needed. The right mix of nudges, using gamification, positive and negative reinforcement, can stimulate consumers to make a positive contribution to our environment and reduce plastic waste.
Blockchain is being introduced to fashion supply chains, and it might hold the key to transparency for brands (Fashion Journal)
Blockchain can become the answer not only to fashion's supply chain transparency, but also minimize greenwashing, fight counterfeiting and provide a competitive advantage for brands that will implement it.
Around the news
Nike Among 9 Companies Pushing for a Climate-Positive Net-Zero Future – a new initiative Transform to Net Zero was launched by Microsoft, Unilever, Starbucks, and other major companies to accelerate the transition to a net-zero global economy. The group commits to "lead by example" and help other businesses achieve net zero emissions by 2050.
Nordstrom Pledges To Reduce Single-Use Plastic By 50% In 5 Years - Nordstrom has released its 2025 Corporate Social Responsibility goals, which includes a list of sustainability measures, such as a goal to reduce single-use plastic in the value chain by 50% by 2025. Previously the retailer also pledged to produce 90% of its Nordstrom Made own brand products in factories that invest in women’s empowerment and disclose the traceability of those store brand products to the factory.
Walmart, Target, and CVS kick off design competition to reinvent plastic bags - the US retailer giants teamed up to launch The Beyond the Bag Challenge to tackle the single-use plastic problem.
Fashion’s recycling bins: Helpful or harmful? - Vogue Business uncovers the challenges behind take-back initiatives and recycling bins. The solution to the recycling problem may require more collaboration and co-ordination across the fashion's supply chain.
Are Retailers Doing Enough On Sustainability In China? - Bailian Fashion Group, one of China’s largest retailers, has introduced a reusable scheme "Go Green" for its concept store "The Balancing", which encourages consumers to deposit old clothes for recycling to receive discount vouchers. However, it has received little engagement from Chinese consumers due to the lack of proper digital marketing efforts.
The North Face Bottle Source T-Shirt Collection - outdoor brand The North Face launched a limited-edition unisex T-shirt collection that has been made from 18,000 kilograms of plastic bottles collected from waste streams in the Alps.
Levi's Most Sustainable Jeans Use a Revolutionary New Material - Levi's partnered with Swedish startup Re:newcell to produce Wellthread 502 jeans made with organic cotton and Circulose, a material made from 50 percent recycled denim and 50 percent sustainably-sourced viscose.
Startup Re-Engineers Spoiled Milk Into Biodegradable Clothing - don't cry over spilled milk, but make a T-shirt out of it. This LA-based startup re-engineers milk waste and uses it to create the biodegradable fiber.
DOWNCYCLING - a form of recycling in which discarded materials or products are converted into items of lower value than the original input.