Fashion’s love of tech has yet to move the needle on sustainability

The fashion industry is often accused of ignoring new technologies and then embracing them when they become mainstream (and sometimes claiming that they have always been cutting-edge innovators). This is certainly the case with the web3, where many brands have tried NFT, metaverse activations and cryptocurrenciesbut analysts now suspect that big luxury brands are quietly building virtual worlds to launch into the metaverse when the time is right.

β€œIt would reflect how luxury brands have approached digital,” Bernstein analyst Luca Solca wrote in a note last week. “LVMH was not a digital pioneer, but when they decided to move in, they poured overwhelming force into their efforts.”

When it comes to new tools to lessen fashion’s impact on the environment, that tipping point always seems close to the horizon. Countless companies tout their innovative approaches to combating the ills of fashion, from blockchain-based technology to map troubled supply chains, product labels that prove to consumers that their purchases have been made in an ethical manner, and new textiles made from fungus roots or captured carbon.

Fashion companies are expected to invest 3-3.5% of their sales in technology by 2030, up from 1.6-1.8% in 2021, according to BoF and McKinsey’s Fashion state: technology report.

But will this spending translate into businesses that operate more sustainably? I’m not holding my breath.

Innovation takes time, patience and resources to build and scale, especially for an industry set in its ways. It also requires the fashion industry to stay the course, and not abandon a project to jump on what’s trendy and sexy. This can be difficult for an industry that prioritizes instant gratification and consumer-oriented initiatives. Publishing an NFT is easier and faster than creating full traceability of a product’s origins and environmental footprint.

And while new technologies and innovations can offer tantalizing glimpses of future solutions, they are often not a silver bullet. For example, discussing the potential of blockchain-based platforms to demystify fashion supply chains depends on some intense and very analogical legwork to connect manufacturers and raw material suppliers, where digital penetration is minimal.

Most fashion companies currently don’t have that kind of visibility. Nearly a third of the 30 companies assessed this year BoF Sustainability Index do not provide any public information indicating that they know perfectly well even their direct suppliers.

Indeed, the annual Fashion Sustainability Performance Benchmark revealed that hot new technologies and hot new business models are still a long way from truly disrupting the status quo. For example, as more and more companies experiment resale and rental, these models have yet to evolve within traditional fashion companies. Companies assessed in the index scored an average of just 17 points out of 100 in the part of the assessment that looked at progress towards establishing circular business models.

It was a single piece of news last week that, for me, put fashion’s lofty ambitions for tech into perspective by highlighting the much less flashy basics that still need attention. Calvin Klein and Tommy Hilfiger owner PVH announced they are partnering with the Mastercard Center for Inclusive Growth, the Business for Social Responsibility HERproject and the Better Than Cash Alliance, all programs that help factories pay wages of workers through the digital bank.

Proponents of such a change say the socio-economic benefits are manifold, ranging from improving efficiency and accountability in back-office operations to promoting financial literacy, independence, savings and security against theft or fraud for predominantly female garment workers. Only about two-thirds of garment factories pay their workers by digital bank transfer, according to 2018 data from the Higg Index – and I imagine that proportion drops if you take into account the less formalized corners of the chains obscure fashion sourcing that are not captured by established reporting tools. .

If the global fashion system has yet to fully digitize one of its most fundamental (and often exploited) transactions, perhaps NFTs can take a back seat for a while.

The BoF Sustainability Index 2022

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