McKinsey: luxury consumers open to sustainability premium
The significance of the trend was underlined by projections that the global garment industry will expand by two-thirds by 2030, while be responsible for one-quarter of the global carbon footprint by 2050, up from 2 percent in 2015.Updated: Mar 29, 2019 14:01 IST
Fashion industry experts say luxury consumers are expressing a willingness to spend more for garments whose production doesn’t harm the environment or exploit workers, a sign they said of a new era of sustainability in fashion.
McKinsey & Company consultancy said at an Italian Fashion Chamber round-table Tuesday that 70 percent of consumers were willing to pay some premium for items produced sustainably, based on responses of 90 department store buyers in 25 countries responsible for 50 billion euros in annual purchases.
The significance of the trend was underlined by projections that the global garment industry will expand by two-thirds by 2030, while be responsible for one-quarter of the global carbon footprint by 2050, up from 2 percent in 2015.
The round-table brought together experts in ethical finance and labor practices alongside industry players and innovators in sustainable technologies in the fashion industry, which is recognized as the second-most polluting sector in the world after the oil industry.
Environmental, social and governance issues were identified as key drivers defining luxury brands’ commitment to sustainability, but speakers also pressed the need for diversity in fashion boardrooms and creativity teams. The diversity call was against the backdrop of recent consumer backlashes against Prada and Gucci for producing items that recalled blackface, and against Dolce & Gabbana in China after one of the designers made insulting remarks.
Livia Firth, creative director of the Eco-age consultancy, said that despite the fashion world’s global nature, a recent report found that ethnic minorities held just 11 percent of board seats on the 15 largest publicly traded fashion companies.
Firth said the case for making the fashion industry more inclusive was moral and ethical, but also made business sense, citing reports from Harvard Business Review and McKinsey that found that “the most technically and culturally diverse boards are significantly more likely to deliver higher profits and generate more sales.”
While the fast-fashion industry is considered the main driver in the rapid expansion of the textile industry, Kerry Kennedy, president of the Robert F. Kennedy Human Rights foundation said that the luxury industry could help raise standards that would put “downward pressure” on fast-fashion.
She called on fashion houses to publishes on their websites the factories where their items are made and to create a “rigorous” best-practice program for garment factory inspectors, which she said still does not exist despite a global outcry after the 2013 collapse of the Rana Plaza building in Bangladesh killing more than 1,300 garment workers.
“I think sustainability would also benefit from a clarity over terms,” she said.
She also called on investors in the industry to make sustainability part of their criteria.
“Sustainability is about corporations or their investors asking themselves this question: What is the impact of environmental degradation, human rights violations or corruption on investment outcome for shareholders,” she said. “If you make an investment and you fail to consider these issues, you are investing in a ticking bomb and at some point that bomb is going to explode.”
First Published: Mar 29, 2019 14:00 IST