Our planet needs some love. Fashion. Fast fashion, to be exact, is hurting our planet and the people in it. The fashion industry is the second dirtiest in the world, next to oil & gas. The good news? More and more people are now choosing sustainable clothing options. We’re beginning to realize that fast fashion becomes fast trash.
Fifty Seasons a Year (srly?)
Whether it?s high-waisted jean shorts, two-piece pant suits, or pineapple print button down, trends seem to cycle in and out weekly. Styles, colors, and prints are marketed and changed every season. What’s more, the fashion industry isn’t limited to four seasons. The need to stay competitive has led to fashion micro-seasons that number?50-100 a year. People have become conditioned to believe that they must wear the latest trend and that clothing is disposable.
The average consumer bought 60% more clothing in 2014 than in 2000, but kept them half as long. ~McKinsey & Company
The Spell of Convenience
As a 23 year old woman, I can understand what’s driving this trend. Just recently I bought a new pair of shorts from one of the many fast fashion stores. I remember thinking, “these probably won’t last long but it doesn?t matter because they’ll be out of style before they fall apart.” I realize this is a terrible mentality. And yet, it’s what happens when we’re looking for convenience. It’s also explains why fast fashion impacts our planet to such a high degree.?Every purchase and disposal of clothing is a burden on our planet’s resources.
Fashion + Commerce
Fashion existed long before commerce did, and satisfies deep human needs; a sense of self and sense of belonging or differentiating oneself from a group. At its root fashion is not unsustainable. Rather, it’s our current way of pursuing commerce, which is unsustainable. ~Lynda Grose,Fashion Isn’t the Problem, the Industry Needs to Change
In order to better align the beauty and artistry of fashion with everyday commerce, we must first understand the impact of the fast fashion life cycle.
Fast Fashion: A Look Behind the Curtain
Here’s an example of the journey our clothes make before they end up in our closet.
The fast fashion supply chain. At every stage there exists extraction and pollution of our natural resources.
There are many steps involved in the process that lead to fast fashion’s impact on the planet. Starting with raw materials, clothing dye, textile manufacturing, clothing construction, shipping, retail, use and disposal, the fashion industry creates a large footprint from beginning to end. Pesticides to grow the cotton, toxic dyes, transportation
pollution, water and the eventual discarding of the clothes add to the impact.
1. What it Takes to Grow Raw Materials
Cotton and polyester are the two most used fibers in fashion. Polyester is made by chemical reaction involving coal, air, water and petroleum. This process uses a large amount of energy, usually supplied by petroleum or coal.
A study performed by MIT estimated that polyester production releases 706 billion kgs of green house gases every year, equal to 185 coal plant?emissions.
Cotton, the most common natural fiber, makes up?33% of the fibers in textile industry. It has a huge environmental footprint as it requires higher levels of pesticides and water. With the high demand for cotton, Ukraine has already started to experience issues from the large amount of water needed to grow it.
The Aral Sea water levels are 10% of what they were 50 years ago due to rivers having been diverted for irrigation. China, India, USA, Pakistan, Bangladesh, Turkey and Brazil are also textile supply chain countries with regions of high water stress.
2. Clothing Dye: Sending it Down River
Many of the dyes made for the clothing industry leads to the dumping of chemicals into nearby rivers. Dye run off often contains many heavy metals and chemicals harmful to aquatic life and people living down river. New technologies have been invented to mitigate this impact but they are expensive. Many of these locations are in poor areas and these new technologies aren’t a realistic solution. With sizable textile factories lining its shores, Indonesia’s Citarum River has become one of the most polluted rivers in the world. It is an open sewer containing lead, mercury, arsenic and a host of other toxins.
3. Textile Factories: Time to Look at Waste and Safety
Textile factors are often detrimental to both the environment and the locals who work there. Excess fabric is a byproduct of pattern cutting and it creates significant waste. Same goes for high water usage and chemical waste involved in the manufacturing process. Think about the shirt you are wearing. If your shirt was cut from a square of fabric, think about how much extra fabric is left over. It is cheaper for factories to throw away excess fabric than it is for them to maximize use.
The increased demand for cheap, fast fashion as resulted in more and more factories opening in developing?countries. Young women 18-24 primarily work at these factories, making as little as $3 a day. These sweat shops are hire underage workers for long hours, low pay, and horrible conditions. The death of over 1,000 workers in Bangladesh 5 years ago,?caused by the collapse of the Rana Plaza factory building, drove the government to?shut-down 18 garment factories over growing safety concerns.
4. Transport: Your Clothes Are World Travelers
When is the last time you bought something that was ?made in the USA?? With more than 60% of clothing?manufactured in developing countries, our clothes are already world travelers before they reach retailers. As regulation and costs continue to rise, many clothing companies look to move operations overseas. Not only can they pay workers pennies to the ?dollar compared to wages in the USA, but they can also skirt around the limited or non-existent environmental regulations.
A single large container ship can emit cancer and asthma-causing pollutants equivalent to that of 50 million cars. ~The Guardian
Plane, train, boat, truck and arriving packed in plastic, these clothing items have a huge a environmental footprint before they even reach your local retail store.
5. Retailers: Viva la Plastic
I’ve worked in retail and have seen firsthand how clothes arrive at the store. Items are individually packaged in plastic, as if each needed a hazmat suit to protect it from the plague. Every time we stocked our shelves, we were left with at least three trash bags full of plastic. My store was small, so this only happened 3 times a week. On top of it, we give you a bag to take home. Think about that. These clothes arrive in a bag. We throw out that bag. Then we give you a new bag to take with you. It’s easy to see why so much waste is created before we even ware the clothes!
6. Second Hand: Show the Love
Since fashion styles are constantly changing, clothes aren?t designed to last long. That means clothing doesn’t make it to second hand locations. Only about 20% of used clothes end up being sold in second hand retailers.?The rest end up stacked?in landfills. American send 10.5 million tons of clothing to landfills every year.
When you buy something old and previously-loved, you’re extending its lifespan and reducing its carbon footprint. ~Emily Farra, editor Vogue
What Can You Do?
What to hear something great? The tips and tricks included below will not only help our planet, they will help your wallet, too. Here are a few ways you can do well for yourself and do good for our planet. Go green and get rich!
Kick the fast fashion habit. Instead of buying a bunch of poorly made cheap and disposable clothes, invest in some well made long lasting classic pieces. Become aware of the clothing brand’s ethos. Are they just in it for the profit? Are they fair trade? Do they protect the environment or pollute it?? Support those companies that focus on sustainable manufacturing and are not only taking steps to limit their environmental impact but also support the well being of their workers.
Join the second hand clothing trend. In the past 5 years, used clothing purchasers have increased from 11% to 24% and the trend continues to grow. As??77%?of millennials prefer to buy from environmentally-
conscious brands, they are leading the thrift trends. Everyday we see?more and more options to buy second hand, from local consignment shops to online thrift stores.
Buying a used garment extends its life on average by 2.2 years which reduces carbon, waste and water footprint by 73%. ~ThredUp
I tried ThreadUp and was happy with the quality and large variety. Here’s a picture of a sports bra and top I bought for 70% off retail!
The good news? Brands are waking up. At the Copenhagen Fashion Summit in 2017, the Global Fashion Agenda called on fashion?brands and retailers to sign a commitment to accelerate the transition to a?circular fashion system.? The system looks at 4 action points:
Implement design strategies for cyclability.
Increase the volume of used garments collected.
Increase the volume of used garments resold.
Increase the share of garments made from recycled post-consumer textile fibres.
After just one year, 93 companies, representing 207 brands and 12% of the global fashion market, have committed to set a target for 2020 on one or more of the four action points.
4. Take Baby Steps + Shop With Your Heart
Because we’ve made our voices heard, companies are stepping up. Now is your chance to support companies that are working toward aligning fashion with commerce. Here are a few final tips:
Don’t get sucked into fast fashion.
Buy for beauty, authenticity and longevity. Our clothes should last.
Do you know who made your clothes? Have you ever thought about the working conditions that they have to endure? In April 2017, the hashtag #WhoMadeMyClothes created 533 million impressions, a huge increase from 129 million in 2016. The hashtag was encouraged by Fashion Revolution, a global movement for transparency catalysed by the fatal Rana Plaza garment factory collapse in Bangladesh which killed 1,135 people, as a way of pressuring brands to be more transparent about the working conditions and wages of the people who make their clothes. As consciousnes capitalism arises amongst consumers about the fashion industry, the demand for transparency increases.
Fashion Revolution has created the Fashion Transparency Index, a review of 100 of the biggest global fashion brands and retailers, ranked according to how much they disclose about their social and environmental policies, practices and impact. As more and more celebrities and stylists promote ethical fashion, its ?boho? stigma has fallen away. Today it’s trendy to buy well and buy less. ?
?Every single time you run your credit card through a machine you are making ?a vote for the kind of world we live in – Cora Hilts, co-founder of reve-en-vert.com.
Clothing production has doubled in the last 15 years. 80% of our donated used clothes end up in landfills. Clothing recyclers can?t compete with the low-cost production of Chinese manufacturing. The textile industry already accounts for more greenhouse gas emissions than all international flights and maritime shipping combined. Yet no one has more of an incentive than the clothing industry itself to address the problem. Climate change will affect cotton yields making production less predictable and more expensive. As recycling breaks down, the fashion industry is forced to look for answers to solve this systemic problem.
Sustainalytics, a global provider of ESG ratings, shares key ESG information with investors around the world. They work with hundreds of the world?s leading asset managers and pension funds. Their recent report Understanding ESG Incidents: Key Lessons for Investors is based on the analysis of over 29,000 ?incidents? that took place from 2014 to 2016. At Sustainalytics, the word ?incident? refers to a company activity that generates undesirable social or environmental effects.
Of course, a company?s incident track record contains valuable information for investors. But the findings are illuminating for consumers as well. Incidents not only reveal weaknesses in a company?s management systems and the financial effect that has on their shareholders, but also shines a light on the severe social and environmental consequences of poor governance and a single-bottom line mentality.
Where did the most incidents occur?
Whatare the top 10 riskiest industries?
Aerospace & Defense
Refiners & Pipelines
Oil & Gas Producers
Construction & Engineering
What are the top 10 high-profile incidents?
Dec-2016 Banca Monte dei Paschi di Sienna, Italy – The Italian parliament approves a state bailout worth USD 6.1 billion. This is Banca Monte dei Paschi di Sienna’s third major bailout, with company shareholders and junior bondholders contributing EUR 4.3 billion. Incident tag: ?Resilience
Oct-2016 Samsung Global – ?Samsung recalls all Note 7 devices and halts production after multiple cases of their batteries catching fire. Multiple investigations are pending, and sources estimate that the company could suffer up to USD 17 billion in lost revenue because of this incident. Incident tag: ?Quality and Safety
Sep-2016 Wells Fargo, US – Wells Fargo pays USD 190 million in regulatory fines and USD 142 million to settle a class-action lawsuit after creating two million customer accounts without authorization. Additional lawsuits and regulatory investigations are pending. Incident tag: ?Business Ethics
Aug-2016 Energy Transfer Partners, US – Protests among indigenous and community groups disrupt construction of the USD 4 billion Dakota Access Pipeline project and impose costs of USD 500 million on Energy Transfer Partners. Incident tag: ?Conflicts with Indigenous Communities
Apr-2016 Multiple: ?Panama – ?More than 500 banks are connected to fraud, tax evasion and offshoring activities after 11.5 million documents are leaked from Panamanian law firm Mossack Fonseca. The scandal leads to public scrutiny and heightened regulations. Incident tag: ?Business Ethics
Aug-2015 Exxon, US. Exxon is issued a USD 566,000 fine for occupational health and safety violations related to an explosion at its Torrance Refinery. The explosion results in an estimated gross revenue loss of USD 700 million.Incident tag: ?Health and Safety
Oct-2015 Volkswagen,Germany. Volkswagen admits to falsifying emission standards tests and later agrees to pay up to USD 18 billion in regulatory penalties and settlements. Individual and class action lawsuits continue in 17 countries. Incident tag: Business Ethics
May-2015 Toshiba,Japan. Toshiba overstates its profits by USD 400 million for the previous three years and is fined USD 61 million for fraudulent accounting, the largest fine ever imposed in Japan. The company is forced to revise its profit for this period by USD 1.3 billion. Incident tag: ?Accounting Irregularities
Nov-2014 Home Depot, US. Over 40 class action lawsuits are launched against Home Depot by customers whose personal data was compromised in a sweeping data breach. The company confirms in its Annual Report that at least 60 million customers are affected. Incidence tag: ?Data Privacy and Security
Mar-2014 Petrobras, Brazil. A government investigation reveals that Petrobras executives were involved in the largest corruption scandal in Brazil’s history, with bribes in excess of USD 3 billion received over ten years. Incident tag: ?Bribery and Corruption
Larry Fink, founder and chief executive of the investment firm BlackRock, dropped a huge ESG bomb on the world?s largest public companies in his letter advising them that they need to contribute to society as well if they want to receive the support of BlackRock. It?s a beautiful piece. The world?s largest investor declaring that he plans to hold companies accountable is nothing close to ?box ticking.?
Mr. Fink?s declaration is different because his constituency, in this case, is the business community itself. It pits him, to some degree, against many of the companies that he?s invested in, which hold the view that their only duty is to produce profits for their shareholders, an argument long espoused by economists like Milton Friedman. – Andrew Ross Sorkin, BlackRock
Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.
In the $1.7 trillion in active funds we manage, BlackRock can choose to sell the securities of a company if we are doubtful about its strategic direction or long-term growth.
Companies have been too focused on quarterly results; similarly, shareholder engagement has been too focused on annual meetings and proxy votes. If engagement is to be meaningful and productive…then engagement needs to be a year-round conversation about improving long-term value.
In order to make engagement with shareholders as productive as possible, companies must be able to describe their strategy for long-term growth. I want to reiterate our request, outlined in past letters, that you publicly articulate your company?s strategic framework for long-term value creation and explicitly affirm that it has been reviewed by your board of directors.
Your company?s strategy must articulate a path to achieve financial performance. To sustain that performance, however, you must also understand the societal impact of your business as well as the ways that broad, structural trends ? from slow wage growth to rising automation to climate change ? affect your potential for growth.
In the United States, for example, companies should explain to investors how the significant changes to tax law fit into their long-term strategy. What will you do with increased after-tax cash flow, and how will you use it to create long-term value?
Just as we seek deeper conversation between companies and shareholders, we also ask that directors assume deeper involvement with a firm?s long-term strategy. Directors whose knowledge is derived only from sporadic meetings are not fulfilling their duty to shareholders. Likewise, executives who view boards as a nuisance only undermine themselves and the company?s prospects for long-term growth.
We also will continue to emphasize the importance of a diverse board. Boards with a diverse mix of genders, ethnicities, career experiences, and ways of thinking have, as a result, a more diverse and aware mindset.?They are less likely to succumb to groupthink or miss new threats to a company?s business model. And they are better able to identify opportunities that promote long-term growth.
A company?s ability to manage environmental, social, and governance matters demonstrates the leadership and good governance that is so essential to sustainable growth, which is why we are increasingly integrating these issues into our investment process.
As we enter 2018, BlackRock is eager to participate in discussions about long-term value creation and work to build a better framework for serving all your stakeholders. Today, our clients ? who are your company?s owners ? are asking you to demonstrate the leadership and clarity that will drive not only their own investment returns?but also the prosperity and security of their fellow citizens. We look forward to engaging with you on these issues.
Women control 51% of the wealth in the U.S. today. In addition, women currently earn the majority of bachelor’s degrees, master’s degrees, and doctoral degrees.
If women decided to invest only in companies that are doing good for People and Planet, they could create massive change. Only companies that value gender equality, sustainability, ethical business practices and conscious capitalism would be able to thrive.
?Gender lens? investing has been around for awhile, but recently its growth has been increasing as the national conversation on gender focuses on the need for equality in the workplace. If women wealth holders chose to collectively harness the power of their wealth, they could change the playing field for all women.
State Street Global Advisors, which launched an exchange-traded fund focused on women in 2016, also takes an active shareholder role. Their fund SHE focuses on companies with the highest percentage of female managers in their respective sectors.
U.S. Trust’s Women and Girls Equality strategy focuses on companies that employ more women in all areas of their businesses. They also have family-friendly corporate policies, such as child and elder care.
Having more diversity and views ? is better for companies. They tend to be more agile and envision what the future looks like better than other companies. – Jenn Bender, Senior Managing Director and Director of Research, State Street Global Advisors