EU, green, sustainability

Whether a company chooses to abandon or prioritize sustainability initiatives post-pandemic is their business — or until sweeping green recovery proposals, notably championed by the European Union and other entities, come to fruition.

The call-to-action rings like a defunct alarm clock: “2020 will be the most important year for climate action,” proclaimed Claire O’Neill, reporting after the less-than-climactic United Nations COP25 summit in Madrid in December. She was supposed to spearhead the COP26 summit in Glasgow, Scotland, in November — since postponed to 2021 due to the ongoing effects of COVID-19.

With or without that meeting this year, countries are still tasked with the global challenge of emissions reduction — but with the added weight of rebuilding their economies post-pandemic and the question of whether to tackle those problems separately or together. According to the Intergovernmental Panel on Climate Change (IPCC), the world needs to cut emissions by more than 45 percent from 2010 levels if global warming is to be limited to 1.5 degrees Celsius, in line with the Paris Agreement.

Europe aims to set an example in its blueprint for “green” rebuilding, targeting carbon neutrality by 2050, starting with a clean energy transformation. Following EU members Germany and France, which put their support behind a green recovery, next week the European Commission is to propose its own mix of grants and loans for its economic recovery fund.

Already piecemeal policy has been seen by EU members toward the greening of fashion and retail industries. In February, France’s first anti-waste law went into effect, preventing companies from destroying and discarding unsold fashion goods.

Although a work in progress, the European Green Deal (no “new” in its name) is touted as the most ambitious proposal thus far since it was launched by the European Commission in December 2019. It aims to mobilize 1 trillion euros, or $1.1 trillion, over the next decade to address obvious short-term economic needs with long-term green solutions. Critics argue the sum still may not be enough, and in any case, the recovery plan is in for a lengthy approval process.

But the program was approved pre-coronavirus and policy decisions will be made by the end of this year — as major European economies are in a recession. Given that, what does a “green” economic recovery post-COVID-19 look like?

Strides are being taken globally. Last week, New Zealand revealed a $30 billion COVID-19 recovery plan, with thousands of jobs in environmental projects. With its own Green New Deal further validated by April wins for its Democratic party, South Korea is the first East Asian country to outline net-zero emissions targets and the end of coal financing. The top carbon dioxide emitters — the U.S., China and India, according to the International Energy Agency — carry no such targets and that bleeds into their stimulus packages. As stated in the EU’s draft proposal, if many international partners do not share the “same ambitions” then the risks of carbon leakage could provoke some sort of carbon border tax.

In all of this, the question is what impact there will be on the fragmented fashion industry given its lengthy global supply chains.

“This is a matter of setting policy. There are many standards-setting bodies and well-meaning working groups that have been formed to work on this (e.g., Sustainable Apparel Coalition, Leather Working Group), but the whole industry would make a bigger impact if they could finally agree on the core outcomes they are trying to achieve and the associated timeline,” said Brian Ehrig, a partner in the consumer practice of global strategy and management consulting firm Kearney.

The three things Ehrig wants to see for the apparel industry out of a green recovery are: a broadly accepted definition of sustainability to allow for objective measurement; amplification of R&D capabilities with a focus on new material innovation and circular capabilities, and the adoption of digital-first practices across the value chain.

Unfortunately for many fashion innovators, progress has slowed. According to a study last week from Fashion for Good, which surveyed a sample of its start-up program innovators, COVID-19 has “significantly affected” innovators, primarily in business development (pilot projects with industry players) and financing. While generally optimistic, the majority of respondents cited halted pilot projects, meaning brands aren’t biting on sustainable innovations, with 54 percent of innovators also citing “constrained cash flow.”

Maxine Bédat, founder of fashion-focused information platform New Standard Institute, calls for wrangling the industry’s sustainability problems with better data. “When it comes to the fashion industry, this must mean that companies disclose the carbon footprint of their suppliers, set public targets for reduction and report on progress. Anything less than this does not get to the root of the fashion industry’s environmental impact,” she reiterated.

She added that any “circular” solutions put forth “cannot be illusory,” pointing to stark progress gaps and the plethora of innovations still far from commercial scale.

To Ehrig’s point, industry groups have long stood to unify stakeholders across the apparel and footwear industries. But separate visions — or proposals — emerge regarding how an ascent from COVID-19 and to a circular economy looks.

The Sustainable Apparel Coalition has had its foot in the door since May 2019, launching the Policy Hub in partnership with the Federation of the European Sporting Goods Industry and Global Fashion Agenda. Initially financed by the C&A Foundation, it’s what Douwe Jan Joustra, head of circular transformation at C&A Foundation, said “can and will be an important partner for the industry and governments as well as the European Union.”

By early June, the Policy Hub intends to submit its final proposal for a green recovery plan to the EC and its member states, after drawing on responses from organization members and interested individuals.

Before the pandemic, Higg Index data revealed year-over-year improvement in measurable sustainability progress for more than 500 facilities, but almost all of those were impacted by canceled or suspended orders from COVID-19 struggles, according to an April report from the SAC and Boston Consulting Group.

Speaking on the initial findings of its April survey to inform its proposal, SAC’s chief executive officer Amina Razvi said “two key needs emerged: the short-term need for access to funding that can be allocated to reinforce sustainable practices and the longer-term opportunity to integrate sustainability as a foundational part of rebuilding the industry.”

How those funds would be allocated is contingent on several things. Since Razvi stressed that the proposal is “a living document that will have future iterations as the situation evolves,” she gives special consideration to the time and “continuous dialogue” needed with members and policymakers.

After an appeal by EU environment ministers for the European Green Deal to reside at the core of the region’s economic rebuild, a “green recovery alliance” was formed in April in response, counting more than 180 signatories across sectors, including fast-fashion giant H&M Group, furniture retailer Ikea Group, consumer goods company Unilever and, recently, nonprofit think tank The Ellen MacArthur Foundation.

The informal initiative is led by Pascal Canfin, a member of the European Parliament’s committee on environment and public health.

Not a matter of starting from scratch, the campaign calls for “enshrining the fight against climate change as the core of the economic strategy,” with emphasis on a model baked in “green principles” that is “more resilient, more protective, more sovereign and more inclusive.”

Specifically, the signatories support the establishment of green recovery investment packages at the local, national and EU levels that would aid the transition to a climate-neutral economy, protect biodiversity and accelerate the transformation of agri-food systems — creating jobs and “building more resilient societies.”

Because of murkiness in resource-intensive sectors like textiles, the EU plans to include a comprehensive strategy for textiles and “sustainable products” that will consist of a common methodology and circular design principles, while strengthening extended producer responsibility and clearing up strategy on the unintentional shedding of microplastics.

The latter is especially timely because even at a time of increased consumer interest – with “recycled plastic” seeing a 35 percent rise in search by consumers since January, according to Lyst’s recent conscious fashion report and with “recycled polyester” garnering a 15 percent increase from March to April, according to data from SimilarWeb — brands often evade discussions of microplastics and end-of-life for synthetics. Practically any plastic — single-use, biodegradable and bio-based plastics — will be reined in with the EU’s proposed regulatory framework.

The proposed European initiative also means that green-washing could finally be put to rest, at least in the EU.

“Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment. The commission will step up its regulatory and non-regulatory efforts to tackle false green claims,” noted a draft of the Green Deal from the commission from late 2019.

Too, rather than be in the lurch on growing consumer movements, as outlined in the draft businesses would be empowered to promote sustainable textiles to consumers and offer reuse and repair services.

Industry agenda aside, more than 1.2 million citizens globally joined campaigns advocating for a green recovery in Europe, according to European clean transport campaign Transport and Environment.

Citing April research from Kearney that showed 48 percent of consumers are now more concerned about the environment than they were at the start of the pandemic, with the majority now more likely to buy “environmentally friendlier product,” Ehrig added, “For those [businesses] that had already made a commitment to being green, I’d urge them to stay the course.”