The question we will unpack today is: How do we decarbonize fashion in a socially fair way?
This is a complex question about a complex consumption system.
But I am sure you all will agree that the question is no longer about the need to decarbonize or align this complex consumption system with the natural system—or having enough solutions.
The question is about our seriousness.
For decades, we have been playing the Whack-a-mole in the name of ethics, responsibility, or the license to operate. And as a result, the problems persist.
We must stop addressing only the symptoms and start addressing the root causes of the plaguing problems like
Overproduction, overconsumption, underutilization, wastage and exploitation.
So, stay with me while we unpack to find what we can do to decarbonize in a socially fair way and create a fair future.
Let’s first understand,
What does industry mean by decarbonization today?
The industry has primarily focused on transitioning to renewable energy and improving process and energy efficiency as they both make economic sense and save cost.
In addition, we also find a few good examples, and a growing desire to transition to alternate low-carbon materials and the adoption of circular solutions.
But The truth is despite the availability of many solutions and their potential to decarbonize and solve the industry’s plaguing problems, they still represent a tiny percentage of the entire portfolio of most organizations, brands and the industry.
There is no doubt that renewable energy is an essential part of the decarbonization plan, but focusing only on that will not be sufficient, especially when…
- Fossil fuels dominate the grid energy mix of most apparel-producing countries, and most do not have resources and aggressive plans to transition to renewable energy soon.
- We are yet to see concrete plans to achieve scope-3 emission targets and clarity about the role and responsibilities of the stakeholders.
If the expectation is that the upstream supply chain will invest in off-grid renewable energy, then the source and cost of the finance need to be discussed.
- Even large organizations in the supply chain struggle to procure finance > due to the inherent uncertainty > and > the lack of long-term commitments.
- Over the past years, Manufacturers have been accommodating annual inflationary and other cost increases by increasing automation and efficiencies and shifting production to lower minimum wage regions within or outside countries.
Considering these factors, the transition to renewable energy is not going to be easy, and even if we make it happen, it will not solve most of the problems of the industry…again it will only address a few symptoms and extend the business-as-usual scenario > that > exploits the frontline communities > and the planet.
This leads to the second part, social fairness, and the related questions
Is expecting fairness a utopian thought:
- In an industry that pays 15 to 50% of the living wage, which is mostly less than half a percent and in some cases goes up to 3-4% of what consumer pays depending on the amount of time required and where it is produced.
- Financial concerns are a major cause of mental health issues among workers in the global south
they struggle to manage their monthly expenses and never have enough to cope with emergencies despite living humbly and working long hours.
- Industry Shifts production for a few cents to lower wage country or region…in other words, punishes the country or region for paying better wages to workers.
- We are driving automation to reduce dependence on labour when growing population, unemployment and poverty remain unsolved problems for producing countries.
- On one side, we are advocating reuse and resale without having any plans or conversations about the negative impact of reduced production on workers in the global south, who are already victims of the demand and supply gap.
There are more producers than buyers and less jobs than the workers
- On the other side, even ethical brands incentivize consumption by offering heavy discounts to entice consumers to buy more.
- The irony is that all this happens when brands keep at least 60% of the total supply chain profit in their pockets and still struggle to meet shareholders’ expectations.
In the current cost structure and with the mechanisms used to achieve profit margins, Brands and the supply chain will never be able to pay a living wage. If they agree, then in some cases, they will have to give away all or a major portion of their profit margins, which will put their survival under question.
- To top it up, brands have committed to decarbonizing their supply chain without discussing it with the supply chain partners, and most of them are not showing any signs of taking financial ownership beyond their scope 1 and 2 emissions, which, as per several estimates, account for around 3% to 5% of the entire supply chain emission.
Here we need to understand that fairness is not something that can be convenience-based.
It is either there or not there.
The industry is in a gridlock situation. The supply chain operates out of fear. The Fear of losing market share, the fear of losing production, and the fear of losing jobs.
We have a lot to be fixed.
We often hold capitalism responsible for the problems, whereas the truth is all human-created systems have and will have flaws unless they are aligned to the natural system of which we all are a part.
In my understanding, no system is bad if it is fair and does not exploit.
If we are serious about Setting the Future right, we must stop playing this game of Whack-a-Mole and collectively and simultaneously address the root causes of the plaguing problems. None of us are flawless, and we all must do
Everything
at Every level of the consumption cycle
and all at once.
Let’s imagine a world where we all do our part.
A world where
- Living wage is mandatory.
- Carbon Emissions are minimum
- The supply chain works as partners and ensures zero exploitation
- Automation is used only for hazardous processes
- Biodegradable materials and Green chemistry are used
- The use of fossil-fuel-based materials is restricted
- Brands plan better and produce less, pay the true cost and charge the consumers accordingly
- Discounts are turned into incentives for maximizing the use and for returning products to the resource pool
- Consumers buy less, use more and return after use
- Performance is measured based on the resources used and the social, environmental and economic value generated per unit.
Now, let’s return to the reality and make it a reality…
The question is, how do we do that…
The ideal would be that we all start doing our part, and we can do if we want to…
But in the current system, we have no choice but to start with the regulations as they are the only hope to ensure that we all do our part simultaneously…
Let’s create the world we have imagined Let’s encourage each other to do our part.
Let’s fix the inconsistent regulations that favour perpetual growth and exploitation.
A transcript of the talk presented at ” Setting the Future: Reimagining Sustainability Transition” on 29 November 2023, organized by Cardiff Business School and POLIMI Graduate School of Management.