Why Invest in Ethical Fashion?
We've all heard the saying "vote with your dollars," but how can we be sure that the investments we make are profitable?
The demand for ethical apparel among consumers is growing, and the sustainable fashion movement is entering a new stage of development.
Consumers and a growing set of investors are more concerned than ever with the environmental and social effects of their fashion purchases.
Impact investing, which involves venture capitalists and funds investing money in companies that prioritise social and environmental problems, has grown rapidly in recent years, partly due to the high nett worth, socially concerned Millennial generation.
2019 saw a $120 billion infusion from European investors into ethical projects, an increase of around $75 billion from the previous year.
The future of commerce and retail is being rapidly and gradually reshaped by new customer behaviours based on values.
For instance, according to Shopify's 2021 Future of Commerce research, 53% of consumers prefer green or sustainable products and 75% said they would be ready to pay extra for them.
The fashion industry, where brands have largely approached sustainability and ethics as concepts to buy into rather than truly embrace, is where Angela Luna and Al-Saad, authors of Open Source Fashion Cookbook and founders of Adiff—a label that makes clothing accessories from would-be waste materials and employs resettled refugees—find this shift to be even more significant.
Luna and Saad also point out that the industry's high price tag and other drawbacks have made it much harder for ordinary people to engage sustainably.
Although sustainable company is profitable, it does have a price. So, what's the next step?
To begin with, money is necessary for sustainability and sustainable fashion to spur revolutionary change.
According to a recent Boston Consulting Group and Fashion for Good report, that figure sits at $20 to $30 billion per year.
As the demand for sustainable products continues to rise, global preference and greater investment in sustainable business have an opportunity to meet that demand.
At this year's Vogue Business and Shopify Sustainability Forum, panelists dove into the opportunities and challenges around investing in fashion's sustainable future.
Here, we examine three critical lessons learned from that crucial discussion as well as more information about sustainable fashion and how supporting these companies, particularly startups, fosters their longevity and encourages improved business practises for the entire industry.
The term "ethical fashion" refers to apparel and accessories that have a positive influence on the environment or human rights.
This includes eco-friendly, organic, and vegan clothing that is produced locally, supports women's and artisans' rights, preserves indigenous cultures, and adheres to the ideals of free trade.
Ethical fashion may contribute to the realisation of 15 of the 17 UN Millennium Goals thanks to the special scope and reach of the industry.
Frequently asked questions about ethical fashion.
Why is ethics important in fashion?
Because it is our social and environmental obligation, ethical fashion is significant. If we don't take action today, it might be too late in the future.
According to ethical fashion, the process of making clothes should adhere to ethical norms and standards. It denotes openness, safety, and trust.
Why is ethical dressing significant? What is it?
The goal of ethical fashion is to address the issues it sees with the way the fashion industry currently operates, such as animal cruelty, waste, hazardous chemical use, exploitative labour practises, and environmental harm.
What do fashion ethics entail?
Designing, making, and distributing clothing in an ethical manner minimises the harm done to people and the environment.
In a perfect world, it benefits everyone who works in the supply chain and improves the future of everyone, not just the wealthy few.
What is sustainable fashion, and where does the market stand today?
Sustainable fashion design and production entails caring for and safeguarding the communities, people, and natural environments involved in the process.
How can we design, advertise, and purchase apparel that is made ethically, has minimal negative effects on the environment, and ensures better working conditions for the people who make it all possible?
According to the entrepreneur, there are three markets for eco-friendly clothes. The categories of natural, recycled, synthetic, and organic materials are separated initially.
Following that, it is based on labels like fair trade, no animal testing, eco-friendly, and charity businesses.
The manufactured, cruelty-free, and women's sectors currently hold the majority of the market share, with the organic, eco-friendly, and men's segments close behind.
As the ethical fashion movement educates consumers, more people are becoming aware of the dangers posed by industrial chemicals found in clothing, the environmental harm caused by some common industrial practises, unsafe working conditions, and subpar quality linked to the "race to the bottom" phenomenon.
As with organic food, people will embrace the idea of quality holistically.
Quality eventually begins to be associated with importance, position, artistic talent, morality, and considerations for the environment and the welfare of others.
Consumers do not evaluate each category independently.
They make a decision. More people choosing to support ethical fashion means that their choices are more likely to become the standard.
A significant barrier to getting money for ethical fashion businesses is locating, negotiating with, and gaining financing from a fund that supports a company's aim. According to Keehn, raising money and capital is generally difficult.
"It's a full-time job in addition to running your business. It's not like you can just walk up to the right investor and ask them if they're interested. Instead, you must go for them and court them."
The assistance and counsel given, in addition to the finance, can be quite helpful when the correct match is made.
"When we invest, we think of it as transcending financial capital," says Stephenson, whose family foundation has invested in businesses including the ethical fashion collective Maiyet and the Kenyan jewellery firm Soko.
We attend events with our partners, put them in touch with people, and be a sounding board at all times. We are quite involved.
Impact investors are in a strong position to promote the sustainable fashion movement and ignite change more swiftly than if a firm were to grow normally, regardless of goal or priorities.
The more support moral businesses receive, the more good they can do. However, impact investors cannot operate independently. Any movement's long-term success depends on collaboration.
According to Stephenson, "We need all sides to work together, including investors, businesses, and organisations" in order to be a successful multi-stakeholder movement.
I see a day when investing in fashion will automatically include ethical considerations.
Recycling, innovative yarns: eco fibres
Some companies have used innovation for a long time. Today, recycled plastic is utilised to create products like bags, shoes, and apparel.
With 20% of materials coming from the ocean, marine plastic is particularly prevalent. In partnership with Parley for the Oceans, Adidas has created five million pairs of shoes from recovered marine plastic since 2018. The 2004-founded French business Veja has an emphasis on recycled materials.
All of the textiles used to make its trainers are made from recycled polyester, with a few notable exceptions.
Even the market for luxury products is joining in.
A variety of accessories are featured in Stella McCartney's most recent collection, which features items created from bottles, fishing nets, and other ocean-dredged plastic garbage. Stella McCartney has always been a supporter of environmentally friendly fashion.
Reuse and the second-hand market: reclaiming scraps
What can leftover fabric scraps be used for? It is preferable to recycle them as opposed to discarding them.
The idea behind upcycling is to create reused clothing out of unsold or abandoned fabric.
With its "Culture Vintage" line, for instance, Kiliwatch is relying on this. "This means we can sell clothes like Schott bomber jackets decorated with inserts of real silk kimonos, updated leather motorcycle jackets, and bespoke work jackets," says Frédérick Calmes, Director of the Paris-based concept store.
Then there is also used clothing. An investigation by the Institut Français de la Mode found that "Compared to 15% in 2009, 39% of French consumers purchased at least one used item of clothing or accessory in 2019. And by 2020, 48% of respondents stated they planned to make greater purchases.
In France, this industry already generates more than 1 billion euros ". Customers have so recognised the benefits of vintage chic in terms of increasing the sustainability of the fashion industry. By choosing to purchase used clothing, they may support efforts to stop overproduction while still having fun. More and more sites are going live, including Vinted (12 million users), Videdressing.com, and Vestiaire Collective.
Why are shoppers investing in sustainability?
Conversations on sustainability have dominated the fashion industry in recent years. Rightfully so.
After all, a significant portion of the world's carbon emissions are attributable to the sector. Fast fashion is a major offender since the industry employs cheap, unsustainable materials and pays extremely low salaries.
Currently, efforts are being done to stop the usage of such clothing. These discussions have only been more prevalent over the past two years as the world has experienced a pandemic.
Particularly Gen-Z and millennial consumers are intensely aware of the environmental issues that fashion creates and are demanding solutions. The majority of fast fashion consumers, the younger generations, are increasingly calling for an evolution, though.
Since I was a teenager, I have been a part of the gen-Z generation, which is on the edge of becoming the millennial generation. My generation frequently had this conversation.
My buddies now buy used items instead of mass-produced ones.
I downloaded Depop, the online marketplace for used goods, years ago, and I now use it exclusively for both buying and selling.
Clothes are recycled, restyled, and reshaped in my social circles so they never actually end up in the garbage.
Both large and small events are being considered for rental services. And those who continue to purchase quick fashion will feel guilty about it and probably soon convert their closets to more environmentally friendly areas.
Without a doubt, the younger generation is rethinking how they feel about fashion. It's difficult to ignore the reality of what our consumerism is doing to the world because social media elevates this discourse to screens on a regular basis.
Unfortunately, there is no longer a way to minimise our own impact on the environment.
The statistics support this.
According to a recent survey by Samsung, a significant portion of young people (aged between late teens and early thirties) are willing to completely alter their clothes in the name of sustainability. 60% of people fit this description.
Another 39% said they prefered being "sustainable" than being "fashionable."
We must assist in educating the public and the consumer as manufacturers alter their business operations. Influencing consumers' fashion shopping decisions, in my opinion, is not an impossible goal.
A public and media outrage was sparked by the calamity in Bangladesh. The media and public sought improvements after the attention generated by the Bangladesh factory collapse and the most recent factory shootings in Cambodia.
But after a period of good intentions wears off, we all know that things quickly return to the way they were. Conditions won't really get better until customers and brands demand it.
Consumers must be informed, and this can only be done by educating and raising public awareness through news, campaigns, social media, and promotion by the ethically leading fashion industries.
Economic experts have always distinguished between developing and developed economies, but in today's interconnected global economy, a typhoon in Southeast Asia can have an impact on the US economy.
The wellbeing and future potential of the richest people in the world are in danger on the opposite side of the globe due to poverty. But because we are interconnected, we can quickly bring about constructive change.
During its production cycle, a pair of jeans can travel 65,000 kilometres. That equates to 1.5 Earth orbits.
Therefore, the logistics of the sector, and as a result, the modes of transportation and industrial facilities within it, play a key role.
"Economic interests intersect with environmental concerns on the issue of transport: there is consensus on the need to rationalise logistical flows, review the choice of transport mode at each stage, optimise orders and container fill rates, and then to explore the possibility of (re)locating some production sites as close as possible to the points of sale," says Deloitte in its roadmap towards sustainable fashion.
The major sportswear companies are likewise moving in this direction in an effort to lessen the impact of travel and packaging.
For their footwear, Puma has created a reusable bag and a package that uses 65% less cardboard than standard packaging.
In 2017, Decathlon substituted train travel for some of their air and marine travel.
Cultivating an ethical wardrobe
Finding an eco-friendly closet can take many different forms. There are second-hand internet portals, upcycled labels, and pre-loved marketplaces.
Each is based on the same principles: to advance environmentally friendly clothing.
To continuously purchase items that won't end up in the back of your closet or, worse, be thrown away, is a concept essentially linked to timelessness.
Denali Sai Nalamalapu, a 25-year-old South Indian-American climate activist, claims her roots have contributed to the abundance of vintage jewellery in her wardrobe.
Indian women pass down gifts from their moms or grandmothers for decades, and these timeless artefacts are an essential part of their generations of women.
This not only offers "a lot of delight" to ladies like Nalamalapu, but it also serves as a powerful reminder of the value of investing in well-chosen attire.
What are the next steps for sustainability in fashion?
Because of Vogue Business' in-depth reporting on sustainability and fashion, as well as the need to continue these conversations well beyond designated calendar days dedicated to the Earth, the Vogue Business and Shopify Sustainability Forum, a half-day virtual event that occurred this spring, was born.
As a new voice in the sustainability discussion, Shopify attended the event.
For the fashion and beauty industries to be encouraged to take on the sustainability concerns in meaningful ways, the panellists here provided guidance, new insights, and alternative business models and tactics.
One panel in particular explored the discussion of sustainability investing and the reasons why there are still so many obstacles that firms must overcome in order to raise capital, despite the fact that doing so is more important than ever.
Future must be sustainable, and corporations must catch up. The public is prepared to make this investment as well; they care about the environment and want to feel good about the products they choose and the companies they support.
Yes, sustainability is a really complicated topic. There aren't any simple solutions or quick treatments.
But even in a sector as notorious for waste as the fashion industry, we can work towards transformative change by consistently acting (no matter how seemingly insignificant), integrating sustainability into our business plans rather than adding it as an afterthought, and investing up front to reap the long-term rewards.