We sit down with the former McKinsey executive and fashion industry expert for more on the state of sustainability, and why the rising resale phenomenon comes with certain sustainability challenges.
We went to Borås Textile Days for two days on the future of fashion and textiles. Finishing off was Dr. Achim Berg, founder of FashionSIGHTS, an independent corporate think tank focused on the fashion and luxury industry, with a keynote on The State of Sustainability in Fashion. Right after, he described the topic as complex.
– We should acknowledge that the industry is a massive polluter and that the data currently shows that that’s not going to change — at least not from a consumption end. This triggers the necessity of things like building a circular business model. But also there, it’s not straightforward. We cannot just say that resale is great from a sustainability point of view, because it could also lead to over consumption. And, the current challenge is that there are very few meaningful business cases. Without a meaningful business case, it’s not going to scale.
– Personally, I think it’s much better to incentivise businesses to do the right things than to force them to do the right things. Therefore, regulation should support it, not push it.
– That’s why I think Sweden is in a unique position because the awareness, the interest, and the affinity for resale are significantly higher, which is a great starting point. I think we could be at one of those pivotal moments similar to ecom in the late 2000s and early 2010s. Back then, we had a lot of bystanders and not believers. Therefore, the big ones and the innovative ones should lead the change.
On stage, you mentioned how sustainability has taken a pause in fashion, according to the executives.
– I think we had a real boom and a lot of commitments in 2019, 2020. People had a lot of time to think and to check their wardrobes during COVID. Therefore, the topic was very hot, It was also pushed by the fact that wokeness, which is very much about doing the right thing, was everywhere.
– We’re now in a very different macroeconomic situation, much more difficult than before, and a lot of businesses are challenged. We have consumers who are not really willing to spend and are more cautious. And, we have a conservative counter movement that doesn’t really believe in wokeness, in sustainability, or in anything. If you put all of that together, that is not a healthy mix for ESG, and therefore, I think it’s a bit on the back burner. It’s not dead. Most businesses continue to spend what they were spending, but they are not accelerating. The consumer also doesn’t show any signs of really buying into it and is willing to pay a premium. Therefore, it will take us a bit of patience. I fear that we need some reminders that the climate crisis is real, and that will hopefully bring the topic back on the agenda.
Borås Textile Days has been a lot about circularity, and you highlighted resale as a big topic. Would you say that it’s the key for the industry in order to become more sustainable, rather than material innovations or cutting emissions in the different scopes?
– No, I think in the end, it’s a mix of all of that. I think we picked that topic (resale, Ed’s note) because we felt that it was very nicely illustrating the challenges, but also the opportunities, and is very relatable to the audience. There’s no doubt that we need a technological breakthrough, but also an adoption breakthrough when it comes to recycling, and it’s also part of reality that we are still almost nowhere on that one…
On stage, you also shared five points on what executives can learn from this. Can you take us through them?
– The first one is from a Swedish perspective: the good news is that there’s a high affinity for resale, for circular. People are more concerned about nature; they are closer to nature than many of the southern European countries as example, or not to talk about the US these days. That is an asset to work with, because it’s easier to reach.
– The second one is that you really need to build a feasible business model. The do-gooders are not. It’s a prerequisite to get active, but it’s not the solution. ESG always scaled or got more important when there was a business case to it. Consumers who wanted it, costs that can be reduced, profitability that can be increased… When things are good for the brand, and we’re living in a capitalist system, you cannot expect that businesses do things that are completely opposite to the business logic.
– The third one is that you need to get out there, and you need to test, and you need to start doing things. Again, I think it’s the big ones and the innovative ones that will drive this. And there’s probably some new entrants, and there’s an opportunity also for them to do something. Some incumbents will just miss the train — that is also the evolution of business and quite normal. I think regulation is important. Not in order to prescribe it, but in order to support it. And I think we need research to support what are the right figures to demystify the whole sustainability question in a sense of what is really sustainable, what is not, and also in order to track the progress.
And finally, a big question, but if we were to meet in a year, what would we talk about within sustainability in fashion?
– Put it the other way around. I don’t think we’re going to have an amazing breakthrough in the next year. I think it’s going to be a rather gradual change. The adoption of AI in the last 12 months is quite impressive, but also a bit scary, which shows you that change is feasible, again, if it creates value and if there is business use to it. Hopefully, we progress on many fronts. Hopefully, we get into a better macroeconomic environment where people are also a bit less scared about the future. AI is one of the big scares for a lot of people, and that hopefully also gives more energy to the fashion industry, which also then makes it easier to get budgets to support the progress.
Achim Berg’s coming book, What’s The Future of Fashion, releases in September