VENICE – “Essentially, the planet is a client.”
The quote from fashion futurologist Geraldine Wharry summed up the sentiment among industry professionals at the third, two-day edition of the Venice Sustainable Fashion Forum held here at the Fondazione Cini.
Against a dampened economy, geopolitical turmoil and global disruptions, sustainability is even more key for the sector’s survival, competitive advantage and resilience, speakers agreed.
Yet the next mile in fashion’s rush toward the eco-transition is facing several setbacks.
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“Brands are living in an ecosystem that is like a tree, a living organism,” said Diesel sustainability ambassador Andrea Rosso. “Consumers are leaves, the trunk represents the brand’s people, its workforce, while roots are the supply chain,” he said, providing one of the most quoted metaphors throughout the forum. “As such, we need to link with the supply chain and the consumers to create a unique ecosystem,” Rosso said.
“We need to build bridges and engage in conversations with worlds far apart from ours. We need to build a new industry and leave old clichés and stereotypes behind us when talking about the global textile sector,” said Sistema Moda Italia, or SMI, president Sergio Tamborini in opening remarks.
The Italian textile association is among the organizers of the event alongside Confindustria Veneto Est and consultancy The European House Ambrosetti.
A study by the consultancy, “Just Fashion Transition 2024,” provided a candid picture of where the fashion sector stands in its eco-journey — and that it’s about eight years late compared to goals set by the EU Strategy for Sustainable and Circular Textiles for 2030.
Risks and opportunities at stake are high and compliance would require European fashion to pour 24.7 billion euros in eco-investments or accept a reduction in total revenues of 156.7 billion euros, the study suggested.
A combined assessment of more than 2,900 Italian supply chain players and European brands estimated that 92 percent of them — many belonging to the former group — won’t be able to bear the required investments.
“The lack of internal competencies seems to be the main driver of unattended oversight on ESG, while low and progressively reducing profitability, as well as high debt ratios make investments in decarbonization hardly affordable,” said Carlo Cici, partner and head of sustainability practices at The European House — Ambrosetti.
Global supply chains, not just Italy’s, are under pressure — and increasingly under scrutiny.
“Perhaps we’ve gone too far on the size of consumption? With growth mechanisms that need to be rethought?” questioned Tamborini. “It’s scary to think about this perspective, but Italian entrepreneurs have always managed to overcome challenges,” he said.
Are ESG’s E, S and G in Competition?
The industry’s goal to address environmental, social and governance issues to enhance sustainability has been fueled by policymaker demand, competitiveness and factual evidence that they are interconnected, experts reiterated.
“Leading regeneration means leading environmental sustainability, which fosters social sustainability and turned into competitive-ity. This is the real challenge we face,” Tamborini said.
Against a fragmented reality, though, the three pillars could be in contrast with one another, experts suggested.
“Sustainability, durability, reuse and recycling further depress consumptions and volumes, threatening economic sustainability,” said Andrea Sianesi, president of the Fondazione Politecnico di Milano and PoliHub.
Based on this assumption, he believes that brands could be resorting to cost-cutting measures, further compressing margins left to small and medium-sized suppliers, thus threatening job stability and ultimately social sustainability.
“Entities with power and great margins should play fair with their supply chain partners, otherwise they will just be drained of their business prowess and the entire tree collapses,” he said referencing Rosso’s metaphor.
His forecasts have already turned into realities.
As reported, the Italian competition authority’s probe into allegations of worker exploitation at several Chinese-owned firms in Italy producing luxury goods led to investigation proceedings into several companies belonging to the Dior Group and the Armani Group for possibly misleading consumers.
Sianesi is part of the committee led by the Milan prefecture aimed at setting up a supply-chain database to help address incidents of labor exploitation in the fashion sector.
Looking Forward, Beyond Contingency
If the past 20 years have taught the industry anything, it is that sustainability is a journey punctuated by checkpoints, progresses and setbacks.
With the current economy’s challenges, companies should embrace a forward-looking agenda now more than ever, speakers offered.
According to Jonathan Hall, managing partner at Kantar Sustainable Transformation Practice, the sustainable transition is not just as a long-term competitive advantage but as a top-line booster. Assessing the top 100 global brands ranked by BrandZ, Kantar estimated that sustainability contributed to $194 billion in value and meaningfully to companies corporate reputations.
In 2023, the world reportedly crossed six out of nine Planetary Boundaries, which are the safe limits for human pressure on the nine critical processes that together maintain a stable and resilient Earth.
“What we need is radical hope and to turn ourselves into visionaries… Obviously we’re thinking about new infrastructures. We’re thinking about new systems, but deeply, what this signals is that we’re also searching for new ideals,” Wharry, the fashion futurologist and a former fashion designer and trend forecaster, said.
Billing entrepreneurs, policymakers and organizations capable of translating information into action as the transition’s “decoders,” Wharry said she believes that contingent market pressure is diverting sustainability efforts and preventing the industry from engaging in the present while also thinking longer term.
“The future is always altered. It is not necessarily a continuation of the present. We know this. The future is plural. The future is multiple futures. Because there are multiple scenarios,” she offered.
“We cannot expect an outcome change without changing the input. Fashion’s business model is not sustainable. The system is not inclusive, and the transition starts with inclusion and representation. We must challenge the system that we are controlling,” echoed Hakan Karaosman, associate professor at the Cardiff Business School and a longtime sustainability advocate.
The current economic stagnation could certainly disincentivize companies from pursuing their ESG goals.
“We are interested in spinning operations with a forward-looking agenda and spirit, bridging yesterday’s excellence into tomorrow,” said Matteo De Rosa, chief executive officer of LVMH Métiers d’Arts. “The future is today, it’s yesterday. It’s companies’ responsibility to embrace it,” he said.
Where Does Fast Fashion Stand?
Arguably one of the most anticipated guests at the forum, which in the previous two editions had gathered solely representatives of the Italian and European supply chain, the former largely dependent of the premium and luxury fashion segments, Shein’s global head of strategy and corporate affairs Peter Pernot-Day didn’t seem to surrender to the backlash and criticism the company has faced thus far.
Shein’s meteoric rise put ultra-fast fashion at the forefront of the conversation. “It’s so far apart from our pipelines but consumers engage with it and we cannot overlook that sector,” said SMI’s president.
Speaking of Shein’s small-batch production, real-time feedback loop from customers, and fully digitized supply management system, Pernot-Day argued that efficiency has ultimately allowed the company to set up economies of scale and ensured low prices.
“The company is animated by a unique vision, to make the beauty of fashion accessible to everyone,” Pernot-Day said.
The Singapore-based company has been ramping up its ESG approach through several corporate and product initiatives, including the introduction last year of the evoluSHEIN Roadmap, “a three-fold framework that has pillars for both people, planet and process. And the idea there is to give us a strategic architecture that the company can move through over time… to make sure that our vision of making fashion is also in line with managing our impact,” Pernot-Day said.
Last September, Italy’s antitrust agency launched a greenwashing investigation into Shein over possibly misleading advertising claims made on the site regarding products’ environmental sustainability.
The Generational Alliance: Seniors, Gen Z and Gen Alpha
Over the past few years, studies have revealed consumers are a driving force in fostering a sustainability transition, but reality is that e-giants like Shein are outpacing competitors as global Gen Zers and Millennials, alike, are buying into their products.
A Kantar study presented at the forum suggested that 93 percent of respondents to a recent survey indicated that they would want to live a sustainable lifestyle, but only 10 percent are following through.
According to Luca Solca, managing director, luxury goods at Bernstein, part of the reason Shein resonates with younger generations is because it provides access to a wide product offering that allows them to shape their image, especially online, where younger generations pour most of their self-expression efforts.
“It comes as no surprise then, that younger generations are consuming more than their predecessors, and this is particularly true for rising markets, as well as China… These models have externalities that policymakers and social groups should take into consideration,” he said
The analyst went as far as to suggest that fast-fashion players including Primark, H&M and Shein should be nominated to the Nobel Peace Prize. “The people’s actual spending power has not increased in the past few years and these companies have contributed to social peace in addition to creating millions of jobs,” he said.
Younger generations’ stance on responsible consumption is indeed a multifaceted topic.
“I see on the one hand a real consciousness [rising] and thinking about equity and the environment… but on the other hand children are constantly bombarded with the opportunity to buy a $20 shirt,” said Sofi Thanhauser, historian and author of the “Worn” book.
“There is a tendency of media to blame Gen Z for the success of fast fashion, but they weren’t even born when it developed,” she said.
“In Europe and the Western world where wealth has brought about consciousness there are very few young people, and with significantly lower spending power and electoral weight,” opined Alessandro Rosina, university lecturer and author.
As much as corporate sustainability can be fostered by intra-supply chain partnerships and alliances, evidence suggests that a cohesive consumer front could further fuel the transaction.
Eco-mindedness and eco-anxiety are no longer just a prerogative of the youngsters. “These changes are affecting senior consumers, too,” Rosina said, voicing for a coming together of different generations advocating for change.
“We need to move from a silver economy based on quantity of consumption to silver ecology, mindful of the quality of consumption in a sustainability vein,” he said. “This is only possible through generational interaction,” he offered.
Could Gen Alpha change consumer patterns for good?
“They are not just digital natives but also sustainability natives. They don’t have a romantic vision of sustainability but rather a data-driven one. They are seeking figures and precise information,” said Marco Taisch, professor of digital manufacturing at PoliMi, the Politecnico di Milano University.
A Level Playing Field? Not Yet
Observers agreed that lawmakers in Europe have been slow in implementing the EU Strategy for Sustainable and Circular Textiles first introduced in 2022. The strategy covers eco-design principles, logistics, the Digital Product Passport and the extended producer responsibility, or EPR — a framework that sets accountability terms on fabric-makers for textile waste — among other pressing issues.
Although Italy — and to a certain extent Europe — have managed to anticipate legislation on many topics, building virtuous value chains, it’s now a matter of defining precise standards and a common ground for the industry to abide by, without getting caught in a bureaucracy-heavy chokehold.
“There was probably too much regulation. Too much and too fast. We want to reduce bureaucracy, which means less regulations, but better regulations,” said Dirk Vantyghem, director general at the European Apparel and Textile Confederation, or Euratex.
Legislators are seemingly lagging behind in defining a level playing field that would impose regulations on imported goods, too, perpetuating — if not exacerbating — the already existent crisis of multilateral trade relationships.
“The transition should not be viewed only from an environmental perspective, but also as an industrial and trade [evolution],” said Barbara Cimmino, the Euratex vice president.
“If we leave some countries outside the global value chain, those countries will never make the transitional quantum leap geared at enhancing global life standards,” Cimmino offered.
“There has been an explosion of rules coming from brands… which then are shouldered by the value chain, which is forced to bureaucratize its operations creating inefficiency. And inefficiency generates economic unsustainability. Standardization is a critical condition to ensure business continuity,” echoed Andrea Crespi, vice president of SMI with oversight on the association’s sustainability strategies.
“Businesses have acted quicker and could influence legislations,” said Matteo Magnani, senior policy analyst at the Ellen MacArthur Foundation. “First movers don’t have to be disincentivized to be first movers. The playing field needs to be leveled so that brand and retailers abide by the same rules across countries,” he said.
