The youngest generations of consumers are faced with a sustainability conflict. They have embraced "fast fashion" — clothing that is trendy, extremely inexpensive due to low-quality material and low-wage labor, and designed to be thrown away relatively quickly. These same consumers also care deeply about the environment, and fast fashion has some inherent sustainability challenges. What is the solution to this disconnect?
If consumers hold tight to their fashion choices, then companies have an opportunity to change their approaches to produce fashion in more sustainable ways. Fortunately, many companies in the fashion industry are beginning to demonstrate deeper commitments to sustainability, due in large part to consumer demands. This includes the current fast-fashion leaders as well as innovative newer companies that are working to create a better system.
Creativity from fashion innovatorsConsumers who are disposing of clothing at high rates may not realize that only 13% of clothing materials are ultimately recycled. To provide consumers with more environmentally friendly choices, many fashion businesses are demonstrating impressive creativity and innovation. Allbirds, a footwear maker, is one example. In addition to its use of sustainable materials for its shoes, the company is committed to going carbon neutral for its entire supply chain. Also, the company's innovative packaging features 90% post-consumer recycled cardboard. For customer returns that can't be resold, Allbirds donates the products to Soles4Souls, a charity that distributes them to people in need.
The pros and cons of clothing rentals: an emerging industryClothing rental platforms such as The RealReal, Rent the Runway, and Le Tote are disrupting the fashion industry. Their business models are based on recirculating highquality designer clothing back into the consumer market. This provides consumers with access to the latest trends while also reducing consumption. This approach has sustainability benefits, but it also relies on some less sustainable processes that are often overlooked. One example is the cost of re-shipping and re-packaging clothes, and washing items after every use. Rent the Runway, for example, created the nation's largest dry-cleaning facility to support its operations.
Traditional retailers step upStart-ups are not the only businesses offering solutions. Traditional retailers Macy's and J.C. Penney, for example, have introduced ThredUp departments in their stores. ThredUp is the largest online thrift store, selling high-quality secondhand clothing for up to 90% off retail prices. As of August 2019, ThredUp had redistributed 65 million garments.
Fast fashion: Why should we care?
- The fashion industry produces 10% of global carbon emissions and is the second largest consumer of the world's water.
- Fast fashion has increased consumption. The average American bought 60% more clothing in 2014 than in 1991, and kept those garments half as long.
- Each year, 85% of textiles end up in landfills.
- Microplastics from synthetic clothing leach into the environment and eventually the ocean, contributing to pollution and impacting the food chain.
- The global apparel market is forecast to be worth $1.5 trillion by 2020.
Levi Strauss, another more traditional clothing retailer, has differentiated itself with a sustainable approach to apparel. The company has been a recognized leader in responsible supply chain practices for more than 25 years. It has done impressive work on product life-cycle assessments — calculating the resource use and impact of a single item of clothing over its entire life cycle. The company purposely designs products that are durable and built to last, a notable contrast to the fast-fashion approach. Levi Strauss also provides education to consumers on how to extend the life span of clothing. In all of its U.S. stores, the company collects denim from any brand, in any condition, to be recycled.
Stock stories: Leaders and innovators addressing the challenge
- One of the world's largest fashion retailers; eight brands, 7,000 stores in 96 markets
- Sustainability goal: By 2025, no longer send anything to landfills from its headquarters, logistics centers, stores, or factories
- Is investing in new technologies for more sustainable fashion products
- Makes it easy for customers to drop off their used Inditex garments for reuse or recycling
- A holding in Putnam Sustainable Leaders Fund
- Project FLX manufacturing process reduces time/costs and eliminates thousands of chemicals usually needed for denim finishing
- Goals by 2020: 100% sustainably sourced cotton; less water to produce 80%+ of Levi products
- By 2020, produce 80% of products in "worker well-being" factories, which support financial empowerment, health and family well-being, and equality and acceptance for apparel workers
- A multinational retailer known for its fast-fashion clothing. Operates in 62 countries with over 4,500 stores
- Aiming for 100% recycled or sustainably sourced materials over the next 10–20 years
- Launched the world's largest retail garment collecting system in 2013
- Collected 20,649 tons of textiles for reuse or recycling in 2018; a 16% increase year over year; equal to 103 million T-shirts
- Goal is to be carbon neutral across entire business, including its supply chain, by 2025
- Aims to become carbon positive — taking more carbon out of the atmosphere than it puts in
- Goal of using only renewable or recycled materials in all products by 2025
- Its "Worn Wear" program encourages reuse, repair, and recycling to extend the life of products
As of 9/30/19, Levi Strauss represented 0.74% of Putnam Sustainable Leaders Fund assets and was not held in Putnam Sustainable Future Fund. H&M, Inditex, J.C. Penney, Le Tote, Macy's, and The RealReal were not held in either fund.
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