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Mishcon Academy: Digital Sessions podcast – Supporting a more sustainable fashion business model

Posted on 28 July 2020

The Mishcon Academy Digital Sessions

Conversations on the legal topics affecting businesses and individuals today

Suzi Sendama

In this episode, how is the fashion industry addressing concerns around sustainability?  How can brands be more sustainable but maintain profitability, particularly given the recent increased focus on modern slavery and supply chains?  And what should consumers be doing to support sustainable fashion?  Hello and welcome to the Mishcon Academy Digital Sessions podcast.  I’m Suzi Sendama, a Managing Associated at Mishcon de Reya and I’m joined by my colleague Emily Dorotheou, an Associate at Mishcon with a keen interest in sustainability within the retail sector and rising to the challenge of social distancing rules, we’re recording this podcast over the internet, each of us speaking from our homes.  Emily, it’s perhaps not surprising that the fashion industry is facing criticism given it’s huge carbon footprint.  I was shocked when I saw the figures whilst researching for this podcast.  The industry is said to be responsible for nearly 20% of global waste water and around 10% of global carbon emissions, which is apparently more than all international flights and maritime shipping combined.  Clearly, fundamental changes are needed to fashion’s business model.  What do you think the fashion industry’s role is in addressing the environmental crisis?

Emily Dorotheou

So, I think fashion has quite a critical role to play in addressing the sustainability crisis, both from an environmental but also a social perspective.  The fashion industry employs a lot of people across the world with statistics ranging from one in six to one in eight people are employed by the industry but these are predominantly women and women in third world countries.  Now, the work in this sector in those third world countries is low paid, it’s dangerous, for example some of the workers may need to chemically treat clothes for example to bleach denim and they might be doing this without any sort of safety equipment and because it’s dangerous and because it’s low paid, unfortunately it does perpetuate the gender inequality given the sheer number of women that are in the fashion workforce.  So, from a societal perspective there’s definitely a lot that fashion can do to better protect women and reduce gender inequality.  Now, from an environmental perspective, we as consumers particularly in the west, have enjoyed a great demand and consumption of clothes and this has unfortunately created a very wasteful industry.  We’ve had this, I think, pattern of behaviour since the ‘80s where there was a lot of globalisation and a lot of mass-produced clothes at cheap prices and so consumers have got used to paying low prices for clothes and this has culminated in what’s known as a ‘Try, Buy and Throw Away’ culture where certainly in the UK we are throwing away of £140 million of clothing in landfills every year.  Now, in order to satisfy our demand for low prices, fashion has a lot of sub-contracting and this gives rise to a lot of potential abuse, one of which is the risk of modern slavery because it’s very difficult for a brand, particularly for example in Milan, to be able to have oversight of what’s going on in cotton fields and also what’s going on, on the factory floor. 

Suzi Sendama

We’re talking about sustainability now, in my experience different brands seem to use that word ‘sustainable’ in different ways, whether to denote clothes which are vegan, ethically produced, environmentally friendly, fair trade.  What does it mean when we describe fashion as sustainable?

Emily Dorotheou

So, I think the cynics amongst us will say that sustainable is sort of plastered on anything that attempts to be environmentally friendly and that’s whether it just uses a bit of organic cotton, or whether the brands have taken some steps to improve their carbon footprint for example, or, like you say they will use vegan leather or pineapple leather.  I think truly sustainable clothes and truly sustainable fashion has to be ingrained from every decision that’s made in the supply chain so right from the design of a product where you might be thinking about the circular economy, so, already thinking about how that product will be used at the end of its life, right through to every step of how that product is made and looking to have a more sustainable impact.  Now, some brands are attempting to improve their sustainability profile and some have created sustainable capital collections so for example on the high street you might see some swimwear that’s manufactured from recycled fishing nets for example.  Some luxury brands are also doing a capsule collection that’s sustainable.  So, for example Gucci have launched their off the grid collection and Mulberry have got their portobello bag which is supposed to be 100% sustainable.  You have some other luxury brands that have decided to move away from the traditional fashion calendar.  So, for example again Gucci has said that they’re going to go seasonless so, they’re not going to be slaves anymore to the fashion calendar and make four or six collections a year and that was then also followed by Michael Kors which took the same decision.  So, I think there’s definitely a lot that brands can do other than just saying that their stuff is sustainable. 

Suzi Sendama

One obvious recent impact on the fashion industry is the Covid crisis.  Sales have plunged and billions of pounds worth of orders have been cancelled.  How can the fashion industry navigate its recovery from Coronavirus, while still keeping an eye on sustainability?

Emily Dorotheou

I completely agree with you, the Covid crisis really did put a pressure on brands of sustainability effort.  Now, the immediate reaction from some of the brands was just to cancel orders because of the huge drop in consumer demand and that unfortunately meant that you had the factories on the receiving end of cancelled orders so they were sitting either on products that had been fully made or that were still works in progress.  Now, when you think back to the workers that are in the sort of the vulnerable third world counties so, for example Bangladesh and Cambodia, you are really putting them in an extremely vulnerable position because their Governments are unlikely to have the infrastructure and the stability that our UK Government enjoyed.  So, for example the furlough scheme that the British Government introduced and the impact on these countries was so extreme that the World Economic Forum said that the Covid crisis could actually cause a humanitarian crisis in Bangladesh simply because it was on the receiving end of over $2 billion worth of cancelled orders.  I mean, that was the immediate reaction.  I think after the dust had settled, brands were then thinking well we’ve got all this stock what do we do with it that’s sitting in our shops and in our warehouses in the UK?  And I think they were then faced with the decision of do we try discounting in order to shift it, particularly the stuff that’s seasonal and that needs to go over the summer period or do we have to destroy it in some other way?  Now both of those aren’t great from a sustainability perspective and so you had this situation where it’s an extremely difficult climate for brands at the moment and they’re really being tested because on the one hand, how can you claim that you are sustainable and you care about people and the planet and on the other hand you’re cancelling orders and slashing your prices to get rid of your stock?

Suzi Sendama

You talked about destroying stock, which must have huge environmental repercussions.  As well as the environmental impacts, the fashion industry as a whole is of course also facing increased scrutiny in respect of supply chains.  Very recently accusations of modern slavery failings were levelled against two well-known retailers in the UK which shone a spotlight on British fast-fashion manufacturing.  It seems that for some consumers and some retailers, it’s all about price.  How can clothing brands maintain profitability but have an ethical supply chain at the same time?

Emily Dorotheou

It’s a really difficult question and I sympathise so much with brands on this because like you say, I think consumers are predominantly driven by price simply because we’ve enjoyed low prices for so long.  I mean, the stark reality is that it’s extremely difficult to sell something for £3 when the UK minimum wage is £8.72.  In order to make that maths work, someone elsewhere in the supply chain has got to be suffering, I think.  I think a united approach is needed from the industry simply because if you have a proportion of the fashion sector that is deciding to pay people fairly, inevitably they’re going to have to increase their prices to sort of to make up for that and then you might have a divergence where some are paying people fairly and have increased prices and you have others that might not be taking that path and they’re more competitively priced.  I mean, the things that brands can do in terms of improving their supply chain and making sure that there are no modern slavery occurrences in their supply chain is to have a real understanding of what goes on and that can be achieved by conducting risk assessments, and supply chain audits so you know exactly where the risks are sitting.  Do you know whether the factory workers are being paid minimum wage?  Is there a way for the factory workers to easily raise grievances with brands and that’s definitely something that we at Mishcon can help brands do.  We’ve got an exceptional experience in the retail sector and we recently launched a new part of our business called Mishcon Purpose which helps clients plan for a more sustainable business.  So, that’s one thing that you can do.  Another thing you can do is quite simply incorporate sustainable and ethical decision-making throughout all parts of your business and that can be as simple as having your CSR teams sitting with buyers and designers in the retail brand so that all three are talking to each other and so a CSR person can say to a designer, “Actually, instead of using so much denim in the design process, how about you try and switch to something else that’s more sustainable?” I think that the other end of the supply chain is that understanding how much stock you’re creating and is there a way of better planning so you don’t end up with so much stock? One type of skew which might not be as popular as another type of skew. 

Suzi Sendama

I mean, as you say, we all love a bargain but obviously there’s been uproar in relation to the modern slavery allegations and it does appear that consumers are becoming more engaged in sustainability generally whether that’s going out of their way to recycle or purchase products in environmentally friendly packaging.  You mentioned earlier the seasonality of fashion.  Do you think now might be the moment to drive less seasonality into the fashion system?

Emily Dorotheou

I think so.  I think we have seen a recent trend away.  Certainly, I’ve been reading about how some of the luxury brands are saying that they’re definitely considering the more neutral, the more classic silhouettes and less of the of-the-moment fashion pieces and I think speaking as a consumer, I think it makes sense.  I would much rather buy something that I can wear 15 times than something that I can wear only once or twice and so I think there is a definite trend towards the more seasonless wardrobe collection. 

Suzi Sendama

From a legal perspective, is there anything in terms of law or regulatory bodies in the UK which regulate how sustainable brands need to be or which might encourage brands to be more sustainable?

Emily Dorotheou

So, in the UK there’s no sustainability law per se and I think that was one of the over-arching disappointments from people that were following the environmental audit committee’s investigation into the UK’s retail sector two years ago.  The committee, I think, suggested the much talked-about 1p per garment tax on producers.  None of their recommendations were taken up by the UK Government and so as I mentioned there’s no legislation that really tackles it to tackle sustainability head-on.  What we do have in the UK is we’ve got the Cap Code which regulates advertising and that’s got a whole section that’s dedicated to making environmental claims and so that’s aimed at protecting consumers from what’s known as ‘greenwashing’ claims where you over-exaggerate or you’re sort of making misleading environmental statements about your products.  We’ve also got the Modern Slavery Act which is undergoing a review because of the various complaints that have been made about it being toothless and not really encouraging organisations to properly investigate their supply chains to make sure that there is no modern slavery taking place.  I mean, there are other initiatives across the world so for example France has their Duty of Vigilance Law, which obliges companies to identify and prevent human rights abuses and adverse environmental impacts across their supply chain and then there are some other grassroots issues so for example in Germany, they’re piloting a, what’s known as a ‘Blue Spot Label’ which is a blue spot that you would put on your product if you meet certain environmental criteria. 

Suzi Sendama

I mean, it sounds like new mindsets need to be adopted at both business and consumer level but it’s difficult to see why brands would make the changes that are needed unless there’s a change in the law.  From a consumer perspective, what can we as buyers do to put more pressure on the way suppliers operate and support sustainable fashion?

Emily Dorotheou

So, certainly from the perspective of taking buying decisions, I think there’s quite a few things that consumers can do.  The first thing they can do is when they come to buy a product they can embrace Livia Firth who is the Founder of the Green Carpet Challenge.  She came up with a “Will you wear it at least 30 times?” test.  So, if you do think you’ll wear a product at least 30 times then yes, buy it, if you don’t think you will then don’t.  You can also avoid environmentally unfriendly fabrics, so for example, denim is incredibly thirsty, it needs a lot of water.  Anything with sequins or glitter, that’s been bleached or anything made from nylon or polyester because unfortunately they release a lot of micro-plastics when they’re washed.  You can also do some investigating to see what actually what credentials the brand that you’re thinking of buying from has.  So, we have what’s known as the B Corp accreditation and that’s a certification for responsible businesses and I think one of the most famous retail examples of that is Patagonia, the outdoor clothing company.  As a firm, Mishcon, we’ve got a long-standing partnership with B Lab who issue the B Corp criteria and we can provide businesses with legal advice about how they can go and certify and get a B Corp stamp of approval.  You’ve also got lots of material out there online.  You’ve got everything from Common Objective who have a list of global, ethical brands.  You’ve got Positive Luxury who have a list of ethical brands who enjoy their butterfly stamp of approval and so, any luxury brand that has the blue butterfly mark on it has been confirmed by Positive Luxury as being sustainable.  You can also look online at a brand’s website to see their environmental statement.  We’ve got a website called Lawfully Chic that has lots of idea for sustainable brands.  So, I think there’s definitely a lot that you can do at the buyer end.  Certainly at the end of life end you can think about repairing or re-using or recycling your clothes.  So, I think there’s quite a lot of scope for people to improve their green buying habits. 

Suzi Sendama

I feel like on the unsustainable level you’ve just described my entire festival wardrobe so, maybe I’m going to look at sourcing some more sustainable fashion.  For now, let’s wrap up there.  I’d like to say thanks so much to Emily Dorotheou for joining me for this Mishcon Academy Digital Sessions podcast.  I’m Suzi Sendama and in the next episode my colleagues, Rob Murray and Nina O’Sullivan will be talking about what businesses need to be doing now to prepare for Brexit. 

The Digital Sessions are a new series of online events, videos and podcasts, all available at mishcon.com.  And if you have any questions you’d like answered or suggestions of what you’d like us to cover, do let us know at coronavirus@mishcon.com.  Until next time, take care. 

The Mishcon Academy Digital Sessions.

To access advice for businesses that is regularly updated, please visit Mishcon.com.

Mishcon Academy: Digital Sessions are a series of online events, videos and podcasts looking at the biggest issues faced by businesses and individuals today.

Join Managing Associate Suzi Sendama and Associate Emily Dorotheou, both lawyers in Mishcon de Reya's Retail Group, as they discuss the importance of sustainability within the fashion industry.

This Mishcon Academy: Digital Session podcast covers how the fashion industry is addressing concerns around sustainability, how brands can be more sustainable whilst maintaining profitability (particularly given the increasing focus on modern slavery and supply chains), and what consumers should be doing to support sustainable fashion.

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