Released in The Interline’s first Sustainability Report, this executive interview is one of a ten-part series that sees The Interline quiz executives from major companies on what the term ‘sustainability’ really means, as well as the integral role they play in supporting brands and retailers in their sustainability strategies.
For more on sustainability in fashion, download the full Sustainability Report 2023 completely free of charge and ungated.
Key Takeaways:
- Fashion brands are wrestling with the practical realities of needing to measure and manage their environmental footprint. Impact quantification is often approaching using generalised methodologies, but accurate, granular measurement will be crucial for truly effective impact reduction.
- Legislation is evolving quickly, and fashion brands should embrace it as an opportunity to regain supply chain control, reduce impact, and improve consumer trust. Standardising terms, efforts, and processes will enable better communication with stakeholders at the same time as providing the right data foundations for regulatory disclosure.
- Insetting, which involves aligning the impact of processes with the environment and proactively minimising emissions, is now seen as a more viable long-term strategy compared to carbon offsetting. Like impact measurement itself, insetting requires collaboration across the value chain, and brands should invest in their supply chain now to pave the way for a more sustainable future.
Do you believe “sustainability” is still a useful term for defining the complex road that fashion needs to travel? What does that word mean to you, and how does your definition manifest itself in your company’s approach to designing solutions for fashion’s most urgent challenge?
Sustainability is an umbrella term, you will not find the term sustainability on our website. At Made2Flow we prefer using the term “reduced Impact” . It is a conscious decision to be true to our goal to accelerate decarbonization of the fashion industry. It is crucial that we all understand that any action we take, any product we bring onto the market has an impact. We can and should work to reduce it but we need to acknowledge the impact on people and planet.
Since over 90% of the environmental impact of products happen across the supply chain, our “raison d’etre” – the core of our existence is to gather and verify supply chain data in a systematic manner, uncover impact hotspots and give decision making solutions to brands and suppliers to facilitate impact reduction.
How is the fashion industry, on average, approaching the task of measuring and managing its environmental footprint today? There are various approaches to retroactively calculating the impact of finished products, but these appear to be based on quite a loose patchwork of data. Are these approaches delivering real insights? And are they creating a return on investment for the brands and retailers that use them?
We must acknowledge the large strides the industry has taken in recent years. When we started Made2Flow, measuring the impact was not even in the scope of most brands or suppliers. Luckily this has changed significantly.
The challenge now is about how to measure the impact to ensure results accuracy and efficient reduction roadmaps.
Often we see that brands use generalised methodologies such as GHG protocol and other tools which provide simplified factor work. These short cuts are done, due to lack of existing reliable data and the wrong assumption that gathering and validating data in mass across supply chains is impossible. Indeed it is not a task meant to be performed by brands. Third parties such as Made2Flow gain efficiencies in the process and act as data protectors and can leverage on its growing scale to help validate and analyse the data. It is crucial that impact measurement will reflect the smallest nuances of a product. The breakage point during knitting, waste management practices, energy sources in wet processes, the chemistry used or the sub processes in spinning. Only when done in a granular manner can we help brands reduce impact with the lowest budget possible in the most efficient manner.
Legislation is evolving quickly – to the point where compliance might be starting to seem like an unwinnable race. Instead of bouncing from one set of regulations to another, how should fashion brands be rethinking the way they capture and use data across their supply chains in a systemic, efficient way that prepares them for current and future compliance?
The speed of legislation is taking everyone by surprise. But brands and their production partners shouldn’t be afraid of it. On the contrary – it is setting the very clear language of transparency that we will all use in the coming years. It is essential to standardise terms, efforts and process, so that we have a common language when communicating with different stakeholders, especially with consumers. In the past 30 years we gave up on supply chain control in favour of speed and flexibility. The result is lack of trust of consumers and this means one thing – hiking CAC (Customer acquisition costs) and CRC (Customer retention costs). Legislation is forcing brands to regain this control, reduce their impact and indirectly leading to better conversion rates and costs savings.
The shelf life of carbon offsetting – buying up carbon credits to compensate for emissions – appears to be limited, with both regulators and consumer looking at it as a way for brands to apologise for their impact, rather than actually mitigating it. This makes insetting – aligning the impact of processes with the environment, and proactively minimising emissions – a more viable strategy longer-term. But unlike offsetting, where a brand can simply buy carbon credits itself, insetting requires stakeholders across the value chain to work together. Is this happening today? Or is the burden of action being placed primarily on suppliers?
So much has been written about the inefficiency and greenwashing that often comes with offsetting. Insetting, is relatively a new term, but not a new concept. It simply means investing back into the supply chain. Flexibility in the supply chain doesn’t need to be compromised, we all are going to have new products, new trends and need to make changes, but here as well the 80/20 rule applies. Most of our supply chain is here to stay and we need to understand that working together on impact reduction is investing into future cost reductions. Our latest tool, Carbon Reduction Platform (CRP) facilitates insetting. It is a holistic solution that helps suppliers to measure the impact, set carbon reduction goals, or SBT (Science based targets), provide personalized impact reduction recommendations and track progress with the support of AI and third parties.
We believe in a personalised approach and focus on recommendations that have a short payback period and offer greater production efficiencies.
The CRP will also provide a solution to one of the most challenging issues regarding insetting – normalization. By that, we help brands understand their share in supplier capacity and to translate these wider efforts into single product impact reduction.
As we’ve seen throughout this report, fashion brands don’t lack for ambition when it comes to setting sustainability targets – at least environmentally-speaking. Despite that, progress is still slow. What do you believe is preventing the industry from hitting its goals more quickly? And is it related to the tendency for brands to frame sustainability objectives and business priorities as separate things?
Brands lacked tools that gather and organise huge quantities of data. It is about the ability to work which amounts of data, external and internal and package them in a way that product and sustainability teams gain a common language. Sustainability departments are the biggest budget creation in recent fashion industry. But without the ability to work with the product teams, which are and will always be the heart of the brands, nothing will happen. Taking the BOM data from a PLM or ERP, supercharging it with supply chain data and providing insights and environment that is as easy for a sustainability lead as it is for sales, merchandising, design or product development is the only way forward. That is the only way in which impact reduction becomes the tie breaker of each decision and hundreds of these decisions are done on a daily basis. This will create a very clear incentive loop also with production partners and their suppliers.
For a lot of fashion businesses, compliance with regional regulations is the priority target, but long-term sustainability is about individual and collective action to rapidly improve fashion’s environmental and ethical credentials. What do you think the future looks like at that whole-industry level? And what does that mean for your roadmap and your customers?
We are a global industry. If the Zhejiang local government decides that setting up eutrophication plants is mandatory or France creates an anti-waste law, everyone will be affected.
The future is about the ability to gather data in a systematic manner, measure the impact at scale with allocation database flexibility and report progress according to the local standards and requirements.
To do that, collaborations are crucial and I am very proud of the growing network of partnerships and integrations that Made2flow has developed over the years with “data holders”, such as PLMs, ERPs, Fabric Platforms, QC platforms and many more. Based on this network and our robust API, we are able to funnel data across different platforms in a secure way allowing brands to comply with evolving regulations and make better decisions in a seamless manner.
Made2flow’s future is about developing more decision-making tools to accelerate impact reduction and enable our customers to reach the best Sustainability ROI (SROI).
