Explainer: Does Fashion Have To Choose Between Profit and Sustainability?

Two industry experts weigh up the current challenges facing the fashion industry as the sector attempts to tackle both sustainability and tighter consumer budgets.

Does the fashion industry need to choose between making a profit and becoming more sustainable? At responsible fashion sourcing trade show Source Fashion in London, UK, the question was a reoccurring one with experts taking to the stage to discuss the current trends and issues facing in the fashion industry.

The head of sustainability and corporate responsibility at British retail group Next, Jo Mourant, told delegates that Next has evolved in recent years into a multi-brand platform and extended retail group. She explained some brands have kept their own sustainability and sourcing teams, while others, such as UK clothing brand Joules, have come under Next’s direction.

“We’ve set ourselves science-based targets for Scope 1, 2 and 3,” Mourant said. “We’ve been measuring that for a number of years now and actually we have made great progress – particularly in Scope 1 and 2.” For Scope 3, Mourant said Next is “working continually to improve that”, with an emphasis on responsible sourcing of its raw materials.

The retailer is also making great progress when it comes to profit. In January 2024 for example, Next upped its yearly profit outlook for the fifth time in eight months following what a GlobalData analyst described as an “impressive” 5.7% rise in its total full-price sales during the Christmas period.

Does sustainability have to come at the expense of profit?

Nick Beighton, previously CEO at ASOS, said that during his time at the online retailer his leadership changed after he realised he “didn’t want the brand to be famous for selling more dresses that ended up in landfill than anyone else.”

Despite only being asked about ESG policies “a handful of times” in the 14 years he spent as CEO at Asos, he decided he wanted Asos to “do great fashion, but with integrity”.

Beighton added that he was an “unashamed capitalist” but added the system can leave people behind if unrestricted. “Profit shouldn’t drive our purpose,” Beighton said, but added that it was crucial for business. “Purpose without profit is philanthropic – we’re a business.”  

Mourant made the point that Next’s sustainability targets were helping its buying teams to make better business decisions.

She add: “We’re really lucky to have a huge amount of engagement from our buying teams,” adding that colleagues frequently highlight new materials and projects for the retail group to back.

In the past few years, Next has been working with a “live dashboard”, which helps buyers make more sustainable purchasing options by giving them real-time data on cotton, polyester, wool and other materials, and how they are performing against the company’s responsible sourcing target.

Mourant explained the tool allows buyers to see how each purchasing decision they make impacts their targets.

How will sustainability legislation change current trends?

In the next few years, pending legislation – particularly in the EU – will have a huge impact on sustainability and responsible sourcing for fashion brands.

Mourant said the new laws present a “real challenge” for the sector but added that much of the legislation supports the work sustainability teams have already been doing.

Using the example of Digital Product Passports (DPPs), which all fashion and textile products sold in the EU will need to have by 2030, Mourant noted the legislation could also help some brands.

“With DPPs, there is a need to have accurate data about all your products – I think that is a massive commercial opportunity for every business.”

With the greater transparency that the CSDDD and DPPs will bring, fashion consumers may start to make better choices as they learn more about how their clothes were made.

“Imagine if the factory that made the garment had glass walls and the consumer could see inside […] Would they still want that garment?” Beighton asked.

Do fashion brands ultimately need to make fewer clothes?

“I don’t necessarily think you should make less product,” Beighton said. “You should make them better.”

He suggested better fabrics and transparent supply chains could help. However, he added that some of the low price points consumers have become accustomed to would disappear under such a model.

Despite increased focus on sustainability and social responsibility in recent years, it’s heard to ignore the success of ultra fast fashion brands such as Shein and Temu.

Beighton described the rise of Shein as “something to be marvelled at, something to be terrified about”. He considered some aspects of the company’s business model to be “genius” but equally noted that the lack of transparency in its supply chain make him “extremely nervous”.

With Shein rumoured to be approaching an IPO on the London Stock Exchange, Beighton found it “alarming” that both the new and previous government seemed to be in support of such a move. “I think the London Stock Exchange should be a premier place for the best brands, the best industries and the highest standards,” he added.

Source from Just Style

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