The fashion and apparel sectors have a serious waste problem. In fact, the fashion industry and related sectors contribute 10 per cent of all carbon emissions worldwide, according to the World Economic Forum.
Over the last few years, brands, consumers and entire countries have realised that it is time to ditch our wasteful practices. For example, Germany is to introduce a Supply Chain Act, which aims to hold businesses accountable for any social or environmental failures in their supply chains.
Consumers themselves have also started to take action. In 2021, K3 conducted a study in which it found that 30 per cent of consumers had boycotted a retailer due to its lack of environmental awareness.
With mounting pressure from new legislations and eco-friendly consumers, it is evident that businesses must start to adapt their processes to become more ethical and sustainable – but just how well equipped are they to do so?
K3’s latest research surveyed 402 fashion and retail business decision makers (BDMs) and found that while recent events, like the 2021 United Nations Climate Change Conference, have changed how the majority think about their brand’s sustainability strategy, they have not yet allocated sufficient IT resources to meet their goals.
Some 67 per cent stated that their thinking on sustainability has changed. However, only 30 per cent have placed environmental sustainability in their top two IT budget priorities. Meanwhile, less than half of respondents use IT resources to manage corporate social responsibility or company-wide sustainability objectives. And while three in five have implemented some technology or IT solutions to help manage their sustainability efforts, less than one-quarter have fully implemented such solutions. The research shows there is clearly a disconnect between retail and fashion BDMs’ attitudes and their actions when it comes to sustainability practices.
Interestingly, two-thirds of respondents (65 per cent) noted that supply chain transparency is a core focus for their sustainability efforts. It is believed that supply chain transparency could empower brands to identify areas in their operations where they could become more socially and environmentally responsible. Yet, only 29 per cent said they have all the supply chain technology needed to be more ethical and sustainable.
While constrained by budgets, pandemics and a struggle to survive, retailers need to look beyond the next few weeks and months and embrace new technology and implement solutions now to reduce waste, water consumption and carbon emissions, without compromising the customer experience.
According to the Bank of America, Generation Z is predicted to have a collective income totalling $33 trillion by 2030 as they enter the workplace. This will account for more than one-quarter of global income. Previous research by K3 also found that more than half (54 per cent) of Generation Z shoppers have already boycotted retailers for their lack of environmental awareness. It is imperative that retail and fashion businesses do not underestimate this generational shift in mindset.
Now is the time for retail and fashion businesses to start seriously investing in technology that enables them to become more sustainable. By using technology effectively to gain greater visibility over their operations, businesses can start to identify which areas of their supply chain can be improved. The time to adapt is now. Increasing profits and protecting our planet do not have to be mutually exclusive.
Read the full research from K3: https://bit.ly/3r2bxCg
Casey Potenzone is chief commercial and strategy officer at K3
This article was originally published in the Spring 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.