News

27 June 2022

A Sustainable Fashion Business Model

The fashion industry is one of the world's most polluting industries. It consumes vast amounts of energy, water, and chemicals, and produces mountains of waste. The sector also finds it difficult to embrace an ethical approach to production.
But a sustainable fashion business model is possible. Here is how.

What Is Sustainability

According to McGill University, sustainability is:

“meeting our own needs without compromising the ability of future generations to meet their own needs"

It doesn't refer only to the consumption of natural resources, pollution or climate change. It also refers to social equity, economic development and labour policies.

Is It Applicable To Fashion?

Yes, of course!

Even if it is at the beginning, sustainable fashion is already a reality.
Textile companies are working on more eco-friendly fabrics and production processes. At the same time, fashion brands are introducing circular economy elements in their strategies, such as recycling, reselling, repairing. Moreover, sustainable fashion innovations are already numerous.

Why Is Sustainable Fashion Important?

Well, fashion companies should convert to a sustainable business model for several reasons:

  • the planet is asking for it

As reported by McKinsey, the fashion industry produces about the same quantity of greenhouse gases per year as the economies of France, Germany and UK combined. Therefore, perpetuating the traditional business model will bring them to miss the 1.5°C pathway to mitigate climate change;

  • consumers are asking for it

Beyond the Fast Fashion phenomenon, consumers are becoming increasingly aware of the environmental and social impact of their purchases. For this reason, they ask producers for greater transparency and responsibility regarding the origin of raw materials, the production processes, and the disposal of garments. Companies that do not face this request will be cut out of business.

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A Sustainable Fashion Business Model

The traditional fashion business model includes 3 steps:

  • TAKE - companies collect raw materials and fabrics from all over the world,
  • MAKE - they produce garments through processes that consume resources, produce pollution and waste, and often don't ensure adequate working conditions,
  • WASTE - the unsold remains in the warehouse, is destroyed or thrown away. Even consumers, once tired of the product, throw it away.

A sustainable fashion business model rethink these steps.

First of all, it focuses on circularity by using more eco-friendly, local, or new materials. Ethical and sustainable fashion brands are already working with innovative fabrics made from recycled materials, such as plastic bottles, or sustainable fibers, such as hemp.

Then, it revolutionizes the manufacturing processes. Nowadays, fashion brands can rely on technologies that make it possible to reduce water consumption or the use of labor. They can also replace dyes and chemicals for finishing with other substances of natural origin. Moreover, textile designers and fashion designers can ideate products that are more durable and low impact along their life cycle. 

Finally, sustainable fashion wants to create a relationship with customers based on trust. Digitalization and blockchain can improve transparency about the entire supply chain. While the recycling, reselling, renting, and repairing of garments show people the company's commitment even after the selling.

The 3 Pillars Of The Sustainable Fashion Business Model

  • Environmental Sustainability
    Companies consume renewable natural resources at a rate that allows them to regenerate. They, when possible, find alternatives to non-renewable resources. The Earth's environmental systems are in balance and biodiversity is protected.
  • Social Sustainability 
    The activities of companies do not affect the human and labour rights, nor health, safety, and culture of workers and local communities. All people are protected from discrimination.
  • Economic Sustainability 
    Local communities that interact with companies maintain their independence and have access to the natural resources of the area. Their economies are not damaged by the activities of companies.

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What About Profit?

Converting into a sustainable fashion business model seems expensive. Indeed, investments in R&D, technologies, expertise and marketing are necessary. But is it profitable?

Yes, it is.

Only in the UK, the sustainable fashion market revenue reached about 70 million in 2020.

The role of circular economy

In circular economy, products remain on the market for as long as possible. To do so, they must be durable but also easy to transform.

There are some keywords coming from circular economy that must be applied to fashion brands.

Here they are:

Recycle.
It means giving back garments to manufacturers so they can use them to create something new;

Resell.
It is the new frontier for both retailers and luxury brands. In fact, in a few years, 20% of the turnover of fashion brands will come from reselling second-hand garments;

Reuse.
It shows a change in consumer mentality. It is not just a matter of using garments as many times as possible, but also of turning them into something useful once old.

Renting.
Perhaps, in the future ownership of garments will disappear. However, consumer wants variety and affordability. For this reason, they are increasingly choosing to rent garments rather than buy them. It is cheaper, more satisfying, and at the same time ecologically sustainable.

Repairing.
This is another great opportunity for companies. Several fashion brands have started repair programs: in case of minor damage, customers can send the product back to the manufacturer for repairing. In this way, its life cycle is lengthened.