Three years ago, all of the United Nations member states inked an agreement aimed at implementing the U.N.’s Sustainable Development Goals by 2030. The SDGs are comprehensive and impact all aspects of society — government, NGOs, nonprofits and businesses.
For the global fashion and textiles sector, which is one of the top water users, carbon-producing and pollution-causing industries, the SDGs offered a framework for transforming companies in a way that is not only ethical and sustainable, but drives business value, too.
It’s been a long three years. While companies are making progress, industry analysts say there’s much work to be done in creating circular economies. But there’s help, and recent research shows that progress is made more so than some in the industry may think.
As part of the SDGs initiative, the U.N. Global Compact teamed with KPMG LLP to create a series of reports based on an SDGs matrix. The latest, “Threading the Needle: Weaving the Sustainable Development Goals Into the Textile, Retail and Apparel Industry,” was commissioned by the nonprofit Textile Exchange and is a 73-page-thick toolkit done by KPMG for companies to “scale positive social, environmental and economic impact through the SDGs,” authors of the report said.
Joanne Beatty, director of sustainability services at KPMG, said, “Four in 10 of the world’s largest companies already reference the United Nations’ SDGs in corporate reporting, suggesting that business interest in the SDGs has grown quickly since their launch in 2015. Companies in the apparel sector would seem to be strategically placed to drive social and environmental impact level by leveraging ubiquitous global supply chains, market penetration and long-standing customer relationships.”
Members of the Textile Exchange include Inditex, Gap Inc., Kering SA, Lenzing AG, C&A, Patagonia, PVH Corp., Target Corp. and VF Corp. Some of the collaborative contributors of the report include the CEO Water Mandate, Pacific Institute, Fabrikology, the Sustainable Apparel Coalition and the U.N. Framework Convention on Climate Change, among others.
Tricia Carey, director of global business development at Lenzing and vice chair of the Textile Exchange, said Lenzing is committed “to fulfilling the Sustainable Development Goals, especially SDG 12, regarding sustainable consumption and production, as well as SDG 13 on climate protection.” Carey said with the fragmented apparel supply chain, the report “provides the path for companies to start their journey toward a common goal of integrating the SDGs into their business.”
In an opening statement to the report, the Textile Exchange said it “believes that the SDGs offer a unique opportunity to align existing sustainability initiatives through a common framework and accelerate the industry’s efforts to address important challenges in the global textile value chain.”
They noted that future sourcing models and processes will be redefined, “to a great extent, by how this sector addresses the themes underlying the SDGs as sourcing countries integrate the SDGs into their national plans and become a priority in those countries.”
Caterina Conti, ambassador for Textile Exchange and project lead for “Threading the Needle,” told WWD that companies need to “understand that the value in the SDGs is not merely as a risk management or compliance tool, but more as a means to align business, government and NGO agendas and extract long-term business value for all members of the value chain.”
“The SDGs are being incorporated into the policy agendas of all the top sourcing countries and will increasingly impact how we can continue to conduct business in those countries,” Conti added.
Creating a stable and sustainable value chain includes ensuring that the lives of people serving the industry also improve. The Textile Exchange said since two-thirds of workers in the textile supply chain are women, “companies in the industry also have an unprecedented opportunity to continue to advance gender equality, improve economic livelihoods, and mitigate climate impacts.”
The Textile Exchange said this most recent report spotlights how companies are integrating the SDGs into their businesses. And KPMG described the report as a road map for companies to implement the SDGs into their processes — across the supply chain.
Specifically, the report offers examples of “SDG-aligned shared value opportunities” that are relevant to apparel and textiles as well as making the business case (aka top and bottom-line growth) for integrating and aligning with the SDGs.
For brands, that means being able to leverage “market penetration” as well as customer relationships while using their “ability to shape market trends to drive the industry toward a more sustainable future,” the authors of the report said. For retailers, that means working “with a vast network of brands and suppliers to ensure that products they sell meet required quality, variety and price points.”
And while brands, suppliers and retailers play different roles in the implementation of the SDGs, the broader issues being addressed by each are the same, and includes gender equity, equitable employment, climate action and labor rights, among others. “For each of these players, adopting a sustainability strategy with the right mix of foundational considerations, level of effort, and business value can contribute to the implementation of the SDGs across the supply chain,” researchers of the report added.
Another important takeaway from this report is that companies don’t need to start from scratch. Many examples presented reveal an industry that has been working on sustainability for some time, which means implementation requires adjustments and alignment instead of building from the ground up. “This report demonstrates examples where the sector has contributed to helping transform sustainable agriculture systems toward the adoption of more sustainable fibers and materials,” KPMG said. “It has formed transformative partnerships such as the Sustainable Apparel Coalition, Textile Exchange and ZDHC to address critical environmental and social issues, and established effective standards to promote sustainable products.”
Also noteworthy is the role of collaboration. Successful implementation of the SDGs doesn’t happen in a vacuum. Authors of the report said their research found that partnerships, coalitions and collaborations “appear to have and will continue to play an important role in achieving development impact within the textile, retail and apparel industry. For companies grappling with the SDGs, it may be useful to leverage existing initiatives for collaborative action.”
Digging deeper into the notion of “shared value opportunities” of implementing the SDGs, the KPMG researchers divided these into having either a low level of effort or a high one as well as being transactional and/or transformational. For example, deploying an innovative activity or management initiative would require a high level of effort compared to having an existing approach that is seen as a leading practice among peers.
Regarding tactics for implementation, the report has specific examples and recommendations. For fashion brands, the report urged companies to design apparel that is durable and fits into a circular economic model. “As buyers of raw materials, fashion brands can leverage their size and balance sheets to design more durable clothing that increase the frequency with which customers use an item and lower the number of items they keep in their closets, and offer personalization to extend the life of a product.”
That means “upgradable clothing” that is made to have more than one functional purpose. Multipurpose designs could “increase the frequency with which customers use an item and lower the number of items” they own. In the report, KPMG analysts also created an SDG “engagement framework” that focused on “impact opportunity clusters.” The aim was to spark ideas for companies looking to take their first steps toward integrating the SDGs. The case studies of the framework include the rollout of Gap Inc.’s Personal Advancement and Career Enhancement program, which was launched in 2007 and in partnership with CARE. The initiative was done “as a way to empower women staff and managers employed in Gap Inc. factories in Bangladesh, Cambodia, China, Indonesia and Myanmar, among others to gain the skills and confidence needed to advance at work and life.” Since the launch, more than 91,000 people in a dozen countries have participated, and Gap is committed to reaching one million women and girls by the close of 2020.
Target Corp. is cutting water use in its own branded products as well as in stores. “Owned brand products form a significant part of retailers’ product mix,” authors of the report said. “Addressing the environmental impacts of these products can bring tremendous business and social value as efficiencies are created throughout the enterprise.”
Target deployed WWF International’s water risk assessment to “review water-use-reduction efforts across the manufacturing supply chain, stores and distribution facilities,” the report noted, also stating that the retailer is committed to sourcing “100 percent sustainable cotton for its owned brand and exclusive national brand products.” The company is working with its suppliers to reduce water use in textile dyeing and finishing by 15 percent.