With consumers being more environmentally conscious than ever, it’s no surprise that sustainability has become a familiar refrain in the fashion industry. But are brands delivering on it? That’s a different story.
Among mass-market apparel brands and retailers, only 1% of new products introduced in the first half of this year were tagged sustainable, even after a five-fold increase in the number of such items unveiled in the past two years, according to a McKinsey study released Thursday. “Apparel companies still have a long way to go to meet the demand for sustainability,” said the report, titled “Fashion’s New Must Have: Sustainable Sourcing At Scale.”
While brands face issues such as the cost and availability of sustainable materials, more than half of the industry players want at least half of their products to be made with sustainable materials by 2025, according to the study, which polled 64 global sourcing executive with a combined buying power of $100 billion.
More than four-fifths of the executives also expect physical clothing design samples to be used far less often by 2025.
Even against the shadow of the U.S.-China trade tariffs war, sustainability and transparency surfaced as the top focus–more than double the percentage who cited shifting countries where they buy goods from–when executives were asked how their companies plan to adjust apparel sourcing to respond to macroeconomic trends.
Why? Getting sustainability right pays dividends as consumers, led by millennials and Gen Z, are demanding it: online searches for “sustainable fashion” tripled between 2016 and 2019, the report found.
That trend also highlighted some of the troubles facing fast-fashion teen retailers like Forever 21, which recently filed for bankruptcy protection.
“A population focused on sustainability just doesn’t fit in with Forever 21’s ethos,” said Jefferies & Co. analyst Janine Stichter at the Sourcing Journal Summit in New York on Thursday
At the conference, which gathered 400 industry attendees, sustainability was also a key discussion topic. And one basic problem the industry needs to tackle: how to define sustainable fashion in the first place.
“We don’t have common language for that yet,” said Marissa Pagnani McGowan, senior vice president of corporate responsibility at Calvin Klein and Tommy Hilfiger parent PVH Corp. “We endlessly struggle with how to communicate with consumers.”
On top of that, the McKinsey study found the industry also lacks “a shared set of standards.”
There’s also the lingering issue of many fashion companies overproducing and failing to nail on the trends and products consumers want, leading to piles of unsold merchandise that often end up in landfills.
“You must solve the issue of excess inventory” before sustainability, said John Thorbeck, chairman of consultancy Chainge Capital and a former industry executive. The industry has “tremendous amount of inefficiency. The idea that we are going to switch focus from inventory to sustainability without a solution that embraces both is very hypocritical.”