There’s no doubt that retail is booming, particularly in the fashion industry. Retail sales worldwide reached US$22.492 trillion in 2014.
The global retail market will see steady growth over the next few years, with the apparel, luxury goods and accessories sector expected to achieve a yearly growth rate in excess of 4 percent. That’s good news. But what is the environmental impact of this growth? And what can be done to mitigate it?
The fashion industry is known for its heavy use of resources; this includes the considerable consumption of raw materials and fuels throughout the design, production and distribution process. To put this into context: The World Bank estimates that textile dyeing produces approximately 20 percent of the world’s industrial water pollution.
Rapidly-changing seasonal designs and the pressure to keep prices low have given rise to the trend of disposable clothing, aptly labeled “fast fashion.”
According to the Hong Kong Environment Protection Agency, unwanted clothing weighing up to two double-decker buses are sent to landfills in Hong Kong daily; and in China, fashion waste amounts to as much as 26 million tons, as reported by the China Association of Resource Comprehensive Utilization.
Consumers care about the environmental impact. In a study by Nielsen, 55 percent of global online consumers indicated that they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.
The propensity to buy socially responsible brands is strongest in the Asia-Pacific, compared to North America and Europe. While style and social status matter, another study shows that 73 percent of consumers feel the need to be responsible for contributing towards sustainability.
Sustainability Beyond Philosophy or Design
Sustainable or eco-friendly fashion is often characterized by a pro-environment design philosophy and products that are made using ethical or fair trade materials.
However, to make an impact and effect change, responsibility should not rest on the shoulders of an individual party or group; consumers, designers, manufacturers and retailers all have a part to play in inspiring the positive change that the industry needs.
Recently, through UPS’s partnership with Redress – an NGO committed to promoting environmental sustainability in the fashion industry – I had the privilege of participating in a dialogue on addressing the issue of environmental waste with like-minded peers at The EcoChic Design Awards.
Where designers have embraced sustainability by adopting design techniques like up-cycling or producing merchandise with environmentally-friendly materials, there are other innovations taking place across the supply chain that are also beneficial – Made-to-Order (MTO) manufacturing is one of these key developments.
MTO is a process whereby manufacturing of a product starts only after a customer’s order is received. The shift to a demand-driven business model minimizes the negative outputs of “fast fashion”; namely waste as a result of overproduction.
Retailers have also been pivotal in industry transformation, especially with the extension of commerce from offline to online. Carbon footprint comparisons made between offline and online shoppers estimate that in order to make up for driving to a store, a consumer would have to buy a staggering 24 items to equal the carbon footprint of one item ordered online.
Working alongside our retail customers globally, we’ve had to tackle operational challenges resulting from the evolving retail landscape. Does the e-commerce boom spell the end of brick-and-mortar as we know it? Or is it possible for a retailer to take advantage of the growing demand for B2C whilst still continuing to leverage existing physical assets?
One of the solutions to address the omni-channel transition, which we have seen been particularly successful with some of our retail customers, is to do fulfillment out of storefronts that have inventory located closer to customers. This has been a way to continually capture sales – both offline and online – but also improve customer service (by shortening delivery times).
Delivering a More Sustainable Tomorrow, Today
Sustainability is often about creating or doing less: less waste, lower emissions, fewer impacts. Aside from eco-packaging and moving packages in a carbon neutral way, increasing efficiencies across the supply chain is an important but often ignored aspect when looking to reduce a business’ environmental impact.
Sustainability is built on the foundation of efficiency. Consider the UPS one-driver advantage that gives customers a single driver to handle all package pickups and deliveries, resulting in fewer trips to a business, less fuel consumed, and a reduction in emissions output.
On a larger scale, a simple yet powerful example of decarbonization synergy is UPS’s ability to handle all categories of service (express, ground, domestic, international, commercial and residential) through one integrated pickup and delivery service network, instead of using parallel service networks to handle different categories of services. By eliminating this redundancy throughout our global logistics network, we’re able to use all assets more efficiently and achieve far greater carbon avoidance.
A more holistic approach is required to facilitate green growth. As sustainability continues to make positive inroads in the industry, stakeholders will need to rethink the way they design, produce, consume and dispose of fashion in order to ensure a greener future.
Ava Ho is Director of Marketing, North Asia District, UPS.