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COVID-19 to test fashion companies’ resilience, sustainability initiatives

COVID 19 to test fashion companies resilience sustainabilityIn their new report titled, ‘Weaving a Better Future: Rebuilding a More Sustainable Fashion Industry After COVID-19,’ Boston Consulting Group (BCG) and technology company Higg Co lay out a framework for a phased rebuilding of the fashion industry that elevates the role of social and environmental commitments within forward-looking business resiliency strategies.

The report proposes four actions to actively prepare for a changing industry:

Protecting critical assets: The report advises fashion companies to safeguard workers, employees, capital, value chain partnerships, channels and the trust and support of their customers. They should also unnecessary complexity and costs, in order to prepare for reinvestment.

Partnership with suppliers: The report recommends leaders to engage in a constructive partnership across the value chain in order to find sharedCOVID 19 to test fashion companies resilience sustainability initiatives solutions for protecting worker livelihood and sustaining trust.

Making sustainability central: Leaders should make sustainability central to post-pandemic decision-making. They should explore digitalization, innovative business models and end-to-end solutions – with transparency playing a central role – in order to assess and demonstrate positive environmental and social impact to stakeholders.

The 12-page report notes the unprecedented challenges that have arisen from the crisis, including its impact on the fashion and luxury industries. From March to April, sales decreased by 60 to 70 per cent in the global fashion and luxury industry – with foot traffic in retail and recreation stores declining by 44 per cent in the US, 52 per cent in Germany, 78 per cent in India and 59 per cent in Brazil.

A survey of over 500 manufacturing facilities across all main production regions conducted by the SAC and Higg Co in April reveals, 86 per cent of all facilities have been impacted by cancelled or suspended orders. As a result, 40 per cent of companies now struggle with paying employees, leading to layoffs and factory closures.

However, the survey also states that there are numerous possibilities to integrate sustainability efforts into core business strategy. Those who maintain commitments to supply chain partners, proactively keep an open dialogue and collaborate on solutions will benefit from deeper trust from consumers and value chain partners alike.

“The global crisis demonstrated the critical need for supply chain data to enable decision making and avoid fallout later,” says Jason Kibbey, CEO of Higg Co. According to him, fashion needs to be digitized to accelerate sustainability and transparency, just as it has accelerated all other dimensions of business.

The report also suggests, although the future remains unknown, retailers and brands, who are integrating their sustainability efforts more deeply into their business, are poised to come out strongly. The post-COVID environment will judge companies on how they acted during the crisis and how they prioritize sustainability and transparency once the storm has passed.

 
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