As businesses continue to grapple with the fallout from COVID-19, pressing hot-topics like sustainability could be cooling.
But a report by Boston Consulting Group, the Sustainable Apparel Coalition and Higg Co. suggests that’s a mistake. The group’s findings said brands should continue to factor sustainable measures into their post-COVID-19 planning.
The primary challenges facing the industry — protecting critical assets and solving immediate inventory hurdles — could both benefit from a sustainable approach, according to the report. Protecting workers and value chain suppliers, while eliminating unnecessary costs and complexity, will leave brands in a stronger position both financially and in the minds of their employees and consumers.
“As we watch the apparel industry struggle due to COVID-19, the SAC‘s vision of an industry that increases social justice, reduces environmental impact and has a positive impact on communities is more important now than ever,” said Amina Razvi, executive director at SAC.
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The anticipated impact on the fashion and luxury sectors is great: worldwide sales in those markets fell 60-70% from April to May, while BCG analysis from March predicted a drop in sales of as much as 38% over the rest of 2020. To salvage sales, brands will need to position themselves and their products as worthy investments for a consumer with less disposable income.
The report identifies three phases of recovery. First, it recommended protecting manufacturing partners and minimizing order cancellations where possible. A survey by SAC of over 500 manufacturing facilities found that 86% had been impacted by canceled or suspended orders, with 40% struggling to pay employees.
While cash conservation will be critical, the report also suggested maintaining a core group of social initiatives. That both helps maintain momentum and wins favor with customers; a survey of almost 6,000 consumers in the U.S., U.K., Germany, Italy and China indicated that they very favorably viewed brands that paid their furloughed employees, repurposed facilities to produce PPE or donated to communities.
“This is a moment of truth for fashion industry players,” said Javier Seara, managing director and global leader of the fashion & luxury sector at BCG. “Companies will need to change and are already changing their businesses to adapt to the new reality. Relentlessly incorporating sustainability practices into these changes will be the critical factor that separates winners from idlers.”
As government measures lift and stores begin to re-open, experts suggest businesses continually reassess measures introduced during the pandemic and continue to strengthen supply chain relationships. Once the global economy is back to a more consistent way of working again, the report highlights the value of using technology to implement or grow sustainability initiatives. Solutions such as “pollution sensors, real-time energy monitoring and reporting, and digitized and standardized social audits” can all provide more exact measuring of a company’s sustainability standards.
The post-pandemic consumer is forecast to value trust, value for money and purpose; brands with a strong sustainability record will stand out. Additionally, the brands that consolidated and collaborated with their supplier networks may be rewarded with a more efficient supply chain that focuses on quality and agility, not just affordability.
“This moment of recovery will be an opportunity to rethink our industry and, even if not overnight, build a new model of value and growth,” said Anna Gedda, head of sustainability at H&M Group. “And this is where I see our sustainability strategy and vision being more important than ever.”
