Fashion Fail: Only 4 Companies Achieve Even Mediocre Sustainability Goals


Kearney, the management consulting company, has been measuring the clothing industry’s effort to rein in damaging environmental practices for four years. The news is grim: Despite the constant stream of press releases to the contrary, apparel brands and retailers are practically as toxic as ever, scoring an average of 3.2 on a one-to-10 scale. Only four -- The North Face, Levi’s, Madewell and Patagonia – score higher than 7. Brian Ehrig, a partner at Kearney, explains how that’s hurting the planet – and how most retailers are missing obvious strategies, like in-store used clothing sales.

Interview has been edited for length and clarity.

Retail Insider: This study finds that the apparel industry is “all talk, little action,” making “suboptimal choices at nearly every step in the process, from raw material selection to consumer education." It’s so damning that it’s the kind of data I would have expected from a watchdog group, not a management consultant with a business lens. To sum up, you’re saying fashion retailers are doing a terrible job at sustainability?

Brian Ehrig: It’s not good.

Retail Insider: Why does Kearney think this is important to study?

Ehrig: Our mission is to be the difference for our clients. And sustainability is an integral part of being the difference. Clothing is one of the world’s largest polluters, and we want to understand how brands are performing.

Retail Insider: Most people would have guessed Patagonia would rank No. 1, but it’s fourth. Can you say more about the North Face, Levi’s and Madewell, and why only those four score above a 7?

Ehrig: We rank companies on seven circularity measures. To be fair, Patagonia, the North Face, and all outdoor retailers have a little built-in advantage because they tend to make products that are designed to be durable. Some of those products have a 10-year life span and can have more than one owner. Patagonia also excels in terms of the repair promise, the materials it uses, and how it communicates its mission. One thing all companies could do -- and these four do well -- is to look at collecting used clothing in stores.

Retail Insider: I’m surprised that Levi’s and Madewell fared so well, given the filthy manufacturing reputation of denim.

Ehrig: Yes, denim is a complex problem. But Levi's has big, bold goals, looking for 100% circularity by 2026. Many more garments are made from natural materials and single materials. And there are inherent advantages -- people are fine with a certain number of rips and tears in their jeans. Like Patagonia, the communication Levi’s has around its practices, including vintage, secondhand, and repair, is good. Madewell, a new entrant in our ranking last year, has also made a huge effort in retail collection. And it talks to customers about what happens to those used clothes after they are turned in.

Retail Insider: Apart from that dismal overall score of 3.2, what improvements have you seen?

Ehrig: That score represents an 8% increase from last year, so we've seen some progress. At the beginning, the average was under 2. And within each of our measures, we’re seeing improvements. For example, 40% of companies now have a moderate score for making it easy for customers to get the stuff back to them -- from 20% when we started.

Retail Insider: Why should they do more? Sorry if this sounds cynical, but the industry sells many clothes without caring for the planet. What do they gain from better scores? Corporate reputation gains? Consumer loyalty?

Ehrig: First, it’s their duty of care. Brands have to take responsibility for the whole lifecycle of their products. And so that's kind of the starting point of this. But better scores translate to more loyalty -- that’s a practical advantage. Another is cost, because materials typically account for 50% to 60% of apparel costs. If they can recycle to lower those material costs, that’s a business reason to do better. When we started, 50% of those in our study said their use of recycled fabrics was moderate -- that’s risen to three-quarters.

Retail Insider: How did you choose the companies you study?

Ehrig: We try to find a good mix based on size, geography, and price points. We go from mass market to luxury.

Retail Insider: Many retailers, taking cues from companies like ThredUp, Poshmark, Rent the Runway, and RealReal, have begun to sell their used clothing. How is that going? Where are brands and consumers in that adoption cycle?

Ehrig: Thrifting has been around forever. But the idea of companies thrifting their own brands is pretty new. There are exceptions. REI has been doing it for a long time.

Retail Insider: As an ecommerce business, it’s tough to make money. Why is the tech part so expensive?

Ehrig: It's not just the tech. Every single used product must be assessed, and that’s a lot of labor. Then there is shipping, handling and storage. I’d say that if you are selling any item for less than $60, you will probably not make any profit. But you can make money in-store. H&M is brand-agnostic, selling its own and other brands in stores. That creates a treasure hunt effect, which is something to watch.

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