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Major Shifts Towards Sustainability in Fashion

Major Shifts Towards Sustainability in Fashion - Moeva

Fashion, a giant industry expected to reach $3.3 trillion globally by 2030, surprisingly hasn't seen significant changes in its core systems over the last two decades. However, the growing issues of fair wages, environmental pollution, and the need to satisfy today's conscientious consumers are making 2024 a year of action rather than just talk. Sustainability is no longer an option for brands; it's a business necessity and an opportunity.

Let's heed the insights from the annual State of Fashion report by BOF and McKinsey: one of the two major global economic issues in 2024 is the climate emergency. The frequency and severity of extreme weather events in the past year have made the climate crisis more visible, highlighting the vulnerability of the fashion value chain. It's crucial for the industry to strengthen its supply chain resilience and help reduce emissions.

Another highlight from the report is that sustainability and new regulations will shape one of the five key priorities for the fashion industry. The era of self-regulation in sustainability is ending. Newly implemented rules and regulations will broadly affect both consumers and fashion players. Brands and manufacturers need to review their business models to adapt to these changes. So, what needs to be done?

While emissions and environmental pollution remain key issues, the topic of fair labor and wages threatens the fast fashion model reliant on cheap production. Currently, 93% of brands do not pay garment workers a living wage. As the industry moves towards a more sustainable future, ensuring that workers have safe jobs and fair wages is essential.

Another major topic is the industry's waste problem, targeting new design and retail systems. Waste is a significant issue, with 20 to 40% of produced garments never sold. This arises because retailers cannot accurately predict consumer purchases. On-demand production is a solution coming into play here, and it's encouraging to see this model rising.

We're witnessing the establishment of circular tactics like resale and repair in retail, and new models taking hold. The global second-hand market is expected to exceed $64 billion by the end of this year, proof of its exponential growth. Additionally, the expansion of practices that help extend the lifespan of products through advanced recycling design disciplines is transforming them into desirable items for consumers.

Perhaps the most significant driving force for systematic change is new regulations. The European Commission's recent report revealed that approximately 39% of sustainability claims in the textile, apparel, and footwear sectors could be "greenwashing," i.e., misleading or false. The proposed new law by the European Union aims to tackle the greenwashing issue, protect consumers and the environment, and ensure environmental labels and claims are reliable, enabling better-informed purchasing decisions.

Another key regulation focuses on the industry's waste issue. The pioneering Sustainable Products Regulation (ESPR), which will fully come into effect by 2025, sets minimum design standards for all products sold within the EU. This includes requirements for recyclability, durability, reusability, repairability, and the use of hazardous substances. Digital product passports that collect and share this information are also expected to become legally mandatory.

In 2024 and beyond, one of the most innovative topics is AI and digital applications... Designers are increasingly collaborating with productive artificial intelligence to enhance experience and productivity. The rapid evolution of generative AI, GenAI, is affecting how products are designed and constructed, while also enabling users to be part of the design process. Generative AI can accelerate the creative process and save on materials used for actual prototypes.

Instead of relying solely on trend reports and market analysis, designers can use generative AI to analyze various data streams for upcoming season collections. For example, generative AI can quickly gather data from videos on social media, perform sentiment analysis, or model trends from various consumer data sources. According to a McKinsey analysis, generative AI is expected to contribute up to $200 billion to the profits of the apparel, fashion, and luxury sectors in the next three to five years. Additionally, the digitization of prototype and product development processes can reduce design-stage waste and create pinpointed products tailored to user experiences and needs.

With textile supply chain activities responsible for a large portion of the garment sector's carbon emissions, this year we're more focused on reducing carbon emissions in material and garment production. Key strategies like energy efficiency and transitioning to green energy are coming to the forefront. Brands are moving towards more sustainable materials, searching for new suppliers, and even forming strategic partnerships. For instance, Kering has set supply-focused standards and created the Material Innovation Lab dedicated to sustainable materials and fabrics. In contrast, LVMH supported sustainable material innovations at an event hosted by Stella McCartney at the United Nations' COP climate summit in December. Similarly, Hermès is collaborating with the startup MycoWorks, specializing in mushroom-based alternative leather.

These new-generation materials have attracted billions in investment from brands and investors drawn to high-tech and sustainable innovation. However, the main issue remains whether all these ventures can scale commercially... 2024 will be the year we see the outcomes of these innovators' scaling plans."