Fast fashion often hits the headlines for all the wrong reasons. It’s a multi-billion-dollar industry fueled by (or perpetuating, depending on your viewpoint) consumer demand for new trends at low prices.
Yet many consumers, shareholders and other stakeholders are also likely to be concerned about sustainable production, leaving responsible brands with a tricky path to negotiate.
Issues associated with fast fashion are found all along the supply chain.”Joaquin UyDeputy Head, Corporate Risk & Broking, Philippines
The fast fashion phenomenon has grown over the past few decades as manufacturers have taken advantage of cheap labor, innovations in textiles and production methods, and quicker, smarter supply chains.
ESG issues are found all along the supply chain, from overproduction to harmful manufacturing process, and through to problems with waste disposal.
It’s arguably economically impossible to manufacture, ship and retail a $5 t-shirt or a £12 dress in a way that does no harm to the environment, the workers who make it, or the countries left to process the waste.”Joaquin UyDeputy Head, Corporate Risk & Broking, Philippines
Manufacturers and retailers wanting to do the right thing find themselves having to compete in an ultra-competitive market while trading responsibly and sustainably.
At the heart of the problem is that it’s arguably economically impossible to manufacture, ship and retail a $5 t-shirt or a £12 dress in a way that does no harm to the environment, the workers who make it, or the countries left to process the waste.
Environmental – The UN says “the fashion industry is widely believed to be the second most polluting in the world.”1 Issues range from the use of harmful dyes and chemicals that end up in waterways or that leave textiles unrecyclable, to the excessive use of scare local resources, such as water used in the production of cotton.
Social – Some fast fashion is linked to forced, slave and child labor, often with dangerous working conditions, in factories that pay way below living or minimum wages. In Bangladesh, there have been many textile factory accidents, most appallingly the Rana Plaza building collapse in 2013, that killed 1,132 people.
Governance – Clothing has become a throwaway consumable where more than half of fast fashion items are discarded within a year. Overproduction means that vast amounts of clothing is never even sold or worn. Some brands have arrangements in place to ship used or unwanted stock overseas for disposal, but this often merely shifts the problem to a poorer country to reuse or recycle.
Protecting the valuable reputation of your fashion brand
With the fashion sector under scrutiny, it’s understandable that brands want to talk about the ways they’re ensuring they operate responsibly.
But if a story breaks that appears to show that the reality doesn’t match up to the message, the reputational fall-out and accusations of greenwashing can cause deep and long-lasting damage.
Swedish fashion brand, H&M, is not the only name to face damaging accusations of greenwashing over claims it made in relation to the sustainability of some items in its range.
Other brands have introduced initiatives such as recycling schemes to collect used items when consumers buy something new. However, these have also attracted criticisms about their effectiveness.
No brand is immune from the reputational risk of acting irresponsibly. With news of mountains of clothing waste washing up on Ghanaian beaches or being dumped in Chile’s Atacama Desert, responsible fashion brands need to have a cast iron grip on their ESG processes and supply chain management.
Only brands with the tightest processes are likely to escape being caught with their labels found dumped at sites around the world.
No brand is immune from the reputational risk of acting irresponsibly in the fashion industry.”Joaquin UyDeputy Head, Corporate Risk & Broking, Philippines
Staying ahead of the conversation with effective reputation management
The good news is that few sectors understand the importance of being ahead of the conversation more than the fashion sector.
Proactive brands are introducing innovative reputation management insight, tools and processes to manage potential reputational risks, and ensure they’re ready to respond should an issue arise.
To support responsible and forward-thinking fashion brands, WTW has partnered with some of the global leaders in this field to develop a comprehensive reputational risk solution.
To find out more about our Reputational Crisis Insurance and Risk Management Solution, please get in touch.
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