Sustainability in the corporate context has evolved to the point where the mere presence of sustainability objectives is not enough. This is increasingly apparent in the fashion industry, where stakeholder demand for transparency is on the rise.
In order to truly initiate change and remain competitive in a changing fashion landscape, sustainability goals must be aligned with and informed by a brand's core sustainability issues. This requires the assessment of environmental impacts, risks and opportunities across the value chain. The data collected from this process can then be used to identify hotspots, set realistic and meaningful goals, define strategic roadmaps and communicate credibly about sustainability.
Environmental sustainability consulting firm Quantis works with apparel sector organisations such as the Sustainable Apparel Coalition, Lenzing, LVMH, Gap and Hugo Boss. This experience has led to the development of a four-step approach to tackle sustainability issues present across the apparel sector's value chain. We explore the process below through the lens of the work accomplished with Hugo Boss, with whom Quantis recently collaborated to identify and monetize the value of the environmental impacts of its supply chain.
Step 1: Data drives identification of hotspots
Reliable, science-based metrics are the backbone for strong sustainability strategies, providing the necessary data for businesses to make informed decisions and prioritise sustainability efforts. Without them, companies are taking shots in the dark, focusing their time, energy and resources on arbitrary goals and potentially missing out on opportunities to address their most significant impacts.
Metrics-driven tools such as life cycle assessment (LCA), which tracks all of the flows in and out of the production process, can set organizations up for success, providing a comprehensive way to evaluate environmental impacts across the full spectrum of the value chain while deploying circular thinking.
As illustrated in The Environmental Impact Valuation as Scientific Basis for a Sustainable Apparel Strategy, a recent white paper produced by Hugo Boss and Quantis, credible data on environmental impacts in apparel and footwear industry supply chains is, however, limited and the collection of data from globalised supply chains is a complex and time-consuming task.
For this reason, Hugo Boss, Quantis and a pre-competitive consortium of leading industry organizations and companies — including the Sustainable Apparel Coalition, LVMH and Lenzing — founded the World Apparel and Footwear Life Cycle Assessment Database (WALDB) in 2015. WALDB seeks to solve the data challenge and to deliver robust data for environmental impact assessment and footprinting.
The database builds on EcoLogTex, a tool developed by Hugo Boss and Quantis to collect supplier specific production data from 2009 onwards. EcoLogTex allows Hugo Boss to systemize LCAs in a scientific way, harmonize data collection, promote transparency and gain insight into the environmental impact of materials and processes, which could later be used to inform decision-making processes.
Relying largely on natural fibers for its products, Hugo Boss initially collected data for three representative product categories: cotton t-shirts, cotton shirts and wool knitwear. The data gathered from a multi-indicator approach and further statistical and sensitivity analysis identified raw material cultivation and specific refinement processes as major supply chain hotspots, which have implications for water resources, land use and carbon emissions.
Step 2: Prioritisation of relevant topics
With hotspots defined, companies can start to dig below the surface, zeroing in on the root causes of impacts and determining concrete actions that to tackle them.
Drawing on the information provided by the LCA, which weighed each stage of the production process against 16 environmental indicators across five categories —human health, ecosystem quality, climate change, water withdrawal and resources — Hugo Boss was able to identify, how hotspots, such as cotton cultivation, sheep farming and refinement processes, impact the environment.
For example, the company found strong links between cotton cultivation and land use change, water resource depletion and ecotoxicity. It then defined deforestation of biodiverse land to create monocultures and inefficient farming techniques, particularly in regards to pesticide use and irrigation technologies, as top priorities.
The collaboration between Hugo Boss and Quantis then lead to the next step: to apply the Natural Capital Coalition's Natural Capital Protocol to monetize the LCA data. The protocol facilitates the conversion of ecosystem services into a common unit that can easily be measured and compared. Monetizing eco-system services makes hotspots more visible and also helps organizations define priorities and tangible mitigation programs based on scientific facts.
In the case of both cotton t-shirts and shirts, ecosystem quality impacts, such as land use and toxicity, were identified as critical for cotton cultivation, while energy type and chemicals used during the refinement process were pinpointed as priorities for dyeing and spinning.
Step 3: Setting and monitoring goals
After prioritising impacts, it's time to begin setting goals to address your company's most pressing sustainability challenges. Moving a step beyond benchmarking, science-based goal setting offers companies a way to align their sustainability strategies with what the planet can support, rather than what other industry players are doing. Data collected during the LCA stage provides the key to determining specific and measurable targets to be monitored over time.
Drawing on the results of the LCAs and their subsequent monetization, Hugo Boss has developed a sustainable cotton strategy designed to tackle issues such as land use change and resource depletion through the consideration of local conditions and the use of advanced technologies. Additionally, the apparel company will mitigate impacts across scopes 1, 2 and 3 of the refinement process with the application of renewable energy and new technologies. A leather commitment is expected to follow.
Step 4: Credible communication
More and more, stakeholders want to know about a company's environmental impacts and what it is doing to safeguard its bottom line — and the planet — against future risks. Transparent communication is key and creating a sustainability narrative that is backed up by sound data and demonstrates the strong ties between sustainability objectives and actions will help gain the trust of consumers, investors and employees.
And that's were sustainability metrics come in. They provide robust evidence upon which to build the story of your company's sustainability journey, ultimately boosting company credibility and dismissing concerns about greenwashing. But along with the facts, communications must cater to each stakeholder in order to bridge gaps and align the facts with stakeholder perceptions.
Hugo Boss provides an example of transparent, confident and well-thought-out communications. Using the data from its LCA, the apparel company reports to the Dow Jones Sustainability Index — where it holds a number one spot in the apparel industry — to communicate its environmental commitment to investors. Communications with other industry players entails presentations exploring what is and isn't possible at conferences and events, while the hard facts — materiality and LCA assessments — are used with suppliers to define, analyze and find solutions environmental challenges across the value chain.
Driving meaningful change
In a changing economic landscape, developing solid sustainability strategies is critical for remaining competitive. Yet the lack of credible data on environmental impacts in apparel and footwear supply chains and the time-consuming process of collecting it presents a considerable obstacle for the apparel industry to create sustainability goals that align with their core sustainability issues.
Taking a metrics-based approach to goal and tracking the flows in and out of each step along the value chain, such as in the case of Hugo Boss, allows companies to work around the complexities of global supply chains by developing portfolio of robust data that can be used to delineate hotspots, set realistic and purpose-driven goals, define strategic roadmaps and create a credible and consistent narrative about sustainability.
As a sector characterized by deeply rooted environmental and social issues, the apparel industry requires such an approach to initiate meaningful change, one that relies on planetary boundaries and hard data to drive transformation rather than the status quo.
What is the environmental impact of your apparel value chain?