Why ethical consumption may count for less than investor pressure

In E-Commerce, General News, Investment News, Research News, Understanding Audiences by Martin SummersLeave a Comment

London Fashion Week featured the first annual Sustainable Fashion London symposium, addressing issues around sustainable design, production, retailing and consumption.

This reflects changing consumer sentiment: new research by GK140 shows that online conversations about ethical fashion increased by over a third since 2017.

But this only represents only 2% of all online conversations about high street fashion – and these conversations are predominantly among women over 35 years old.

Consumers’ ethical considerations would seem, then, to offer little hope of making fashion more sustainable. But other factors are making fashion more sustainable.  Concern about sustainability in apparel is far from new: the 1995 scandal surrounding the employment of child labour in the production of footballs for Nike was one of the defining moments for the whole sustainability movement.

What has changed is that the approach to sustainability in apparel has become systematic and comprehensive, looking at all aspects of sustainability – rather than just zooming in on the most recent scandals that might affect consumer choices.

Child labour was the dominant concern on the sustainability agenda for apparel until 2013, when the Raza Plana factory collapsed, killing over 1,100 people.  But despite over $280m in safety improvements, by 2015 only eight factories had fixed enough of their violations to pass a final inspection, out of 3,425 inspections.

Raza Plana highlighted the tragic shortcomings of the traditional arms-length approach to supply chain management, with brands’ expectations set out in contracts and suppliers audited against them. The audits in Bangladesh didn’t cover enough or go deep enough and brands didn’t work closely enough with suppliers to drive improvements.

The tragedy also underlined the importance of good management: new fire doors don’t count for much if no one ensures that they’re kept shut, and workers won’t report unsafe practices if they fear for their jobs if they do so. Safety is as much about management as it is about standards.

This is partly why brands are taking a much more active role in working with suppliers to improve the quality of management and systems. And it’s why investors are increasingly scrutinising brands’ supply chains.

While investor pressures are driving a lot of changes, it’s important not to dismiss consumer pressures. Some argue that ultimately, sustainability considerations will not make a significant difference to buying decisions for most people and that price is still the leading consideration.  It has also typically been associated with millennial women whom typically indicate higher sustainability preferences than other demographics (yet who ultimately buy on price). But our research at GK140 indicates that online conversation about ethical fashion has increased 31% in H1 and 71% in H2 last FY, representing 2% of all conversations relating to high street fashion. Interestingly, these conversations are heavily weighted towards 35+ consumers, representing over 80% of all of this conversation.

The ethical consumer nonetheless has a valuable role in raising expectations and building a consumer base for ethical fashion. Although most consumers might not place sustainability criteria high on their list of priorities, it is doubtful whether a brand could survive ongoing allegations of major safety and welfare abuses in its supply chain.  The application of leading management and ESG (environmental, social and governance) practices by companies and investors is the key to sustainable fashion – and to responsible business, whatever the sector.

 

To find out more about how onefourzero’s digital due diligence and insights can help you identify opportunities for growth and potential risks, contact fleur@onefourzerogroup.com

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