In the next ten years, the fashion industry will be under close scrutiny to maintain a commitment that has to fix a defined goal. In conversation with Simone Pedrazzini, director at Quantis Italy
The need of a sustainable path for the Food & Beverage industry
Quantis is a sustainability consulting group whose mission is to help companies drive sustainable solutions, starting from the design through to the implementation and follow-up phases, combining creativity with science. From their offices in Boston, Paris, Lausanne, Bellinzona, Zürich, Berlin and Milan, Quantis serves an array of industries and clients globally, from Food & Beverage to Apparel, from Energy to Finance.
Simone Pedrazzini is the director of the Italian branch. He explains why the Food & Beverage industry was first to realize the need and the potential of embarking onto a sustainable path to growth: «It moved earlier because its products have a direct impact on the individual — the consequences of what you put IN your body affect you more directly. By the same reasoning, the cosmetics industry has come right after as they sell products you use ON your body. Also, the food industry is one of the industries with the most significant environmental impact, accounting for an estimated twenty-eight percent of global greenhouse emissions (GHG) and therefore has the highest margin for overall improvement. The industry was the first to have round tables across competitors to collaborate on a single issue. Fashion is next in terms of what products surround your body».
Quantis has released a study in 2018 ‘Measuring Fashion’, that maintains that the global apparel and footwear industry is responsible for 8% of all polluting emissions on our planet. The importance of putting a number out there to define the size of the issue cannot be underestimated. «The quantitative approach prevents companies from making decisions based on gut-feeling. We at Quantis tend to bring innovation to the process rather than managing the business-as-usual situation. For Fashion, just the fact of having issued this figure in the market (the infamous eight percent) has sparked a paradigm shift in the way brands approach target setting: over the years we have seen companies saying: ‘ok let’s reduce our emissions by twenty percent’, a figure that is ambitious but not too disruptive. Then what about just fifteen percent, or is not twenty-five even better? Who can set the targets? Having set a clear-cut number for the sector, we have defined a framework for fashion in general — so the level of ambition, as well as the scrutiny, rises globally: those who want to tackle the problem now know what the quantitative perimeter is».
The gap between consumer declarations and their actual values
Sustainability has moved from being a ‘nice-to-have’ item in a company’s scorecard to being a ‘must-have’ priority in order to perform responsibly and compete in the market. What is more, Quantis argues that companies that commit and stick to a sustainable purpose even outperform the market: this is not the case just for Fashion. Sustainability guarantees more value in the eyes of the stakeholders. However, there is a gap between the consumer declarations and their actual values at play when they make a purchasing act. But this gap is getting thinner, claims Quantis Italy, people are increasingly choosing sustainable products as well as factoring companies’ sustainability efforts into their job search.
A signal from the fashion industry itself, has come from the Fashion Pact, an agreement signed by some sixty companies and groups active in the manufacturing, supply chain or distribution of Fashion ranging from the Kering Group to Inditex and Farfetch, from Giorgio Armani to Nike and Selfridges, from Hermès to H&M and Galeries Lafayette. Signed in August 2019 in France under the patronage of the French government, the pact highlights three key concern areas and consequent objectives: stop climate change, restore biodiversity and preserve the oceans, within the framework of the Science Based Targets (SBT) initiative of scientifically measurable objectives. An absentee is the LVMH Group, but Quantis, who also consults for the French luxury giant, suggests that most of the brands within the Group are active in their quest to adopt a sustainable strategy.
Reaching zero greenhouse gas emissions by 2050
Quantis has not worked on the Pact itself but was an active member of the expert advisory group that provided feedback and direction on the development of the SBTi’s Apparel and Footwear Sector Science-Based Targets Guidance. The objective is to reach zero greenhouse gas emissions by 2050 and the elimination of single-use plastics, thus protecting ecosystems. The Pact is not legally binding; however, the question remains as to what entity will evaluate its progress and keep its signatories under scrutiny.
Quantis is adamant: «The planet will be able to give marks: communication about sustainability has increased; companies will be measuring and expressing themselves on these subjects, as the media pressure will ensure that the communication is intensified. Organizations around the globe, such as NGOs, are more vocal and inquisitive. Even if there is not one single judging entity, the Pact has projected light onto a system that any given single player cannot remove. The fashion system is watching. The past decade (from 2010 to 2020) has been about knowledge and awareness. The next ten years, until 2030, will be the ‘action decade’ when we decide our future. If we take the picture of the industry in ten years’ time, as we did with the ‘Measuring Fashion’ work in 2018, we will be able to highlight what has changed and improved. It will be important to evaluate figures in absolute terms — so, not on the 8% in itself — but in absolute values».
The types of greenwashing: voluntary and involuntary
This issue of measuring performances and communicating progress transparently has been high on Quantis’ agenda. ‘Greenwashing’ occurs in all industries, i.e. conveying the impression that a company or its products are more environmentally sound than they are by means of deceitful communication. There are two types of greenwashing: involuntary and voluntary. There are two types of greenwashing: involuntary and voluntary. The voluntary kind is fraudulent in nature and can only be eradicated by exposing the truth, whereas the involuntary kind is due a lack of knowledge — namely the notion that acting within the four walls of your company would be enough to do your part, while facts show that most of the impact is generated outside the company.
While it takes three to six months to measure and produce a ‘materiality matrix’ for a company, outside operations are responsible for 80% of the environmental impact and consumption. Measuring each piece of the supply chain and all the products that come from outside might take the part of five years. It then becomes a trade-off between accurate measurement and a good enough picture in order to start acting without having the pieces of the puzzle laid out. Vertical companies have an easier task as they do not have to rely on information or data from external players.
«Mapping out your company’s situation through what we call a ‘materiality assessment’ to evaluate where you are in terms of sustainability today is a first step that is accessible to most companies. It can be done relatively quickly and without significant investment. The real challenge lies in the involvement of the supply chain and getting suppliers engaged in your sustainability strategy — this has the biggest potential to drive impact. Companies need to know their supply chains down to the first, second and third level of suppliers and raw materials, and start a dialogue with suppliers to integrate sustainability throughout the value chain. The important thing is to take action. Recycling paper or plastic bottles in your office is well and good, but it will not generate enough change», Simone Pedrazzini explains.
Lampoon reporting: there is no zero impact
Practicing sustainability at all levels is an endeavor for even the most virtuous company. Emphasis has been placed on the issue of neutrality, or ‘zero impact’, under the assumption that companies will always be damaging the environment to some degree by virtue of their being operative, as ‘green’ as they might be. There is no zero impact, any activity will consume energy and produce waste. As a consequence, the practice of compensation is widely used, but it is often misunderstood or applied incongruously.
«A company might say: ‘I have an impact on the planet, but I can compensate for that impact, so I can keep doing what I was doing with a clear conscience’. For example, companies have started planting trees to offset their GHG emissions. But planting a tree cannot guarantee that your immediate impact will be compensated and neutralized, and for how long? And where? The equation is not guaranteed. What companies should aim to do first is avoid and reduce as much as possible — then you can compensate.The temptation is to compensate in a quantitatively ineffective way instead of planning radical changes from within. Compensation often takes place within an environment that has nothing to do with the supply chain responsible for the environmental damage in the first place — there needs to be a shift to insetting compensation within the business itself and the environment it directly operates in, as opposed to offsetting», says Simone Pedrazzini.
Quantis’ work has highlighted that not all initiatives that fall under the sustainable umbrella are equal. Taking a quantitative approach and working with SBT ensures that companies and customers will be able to make informed choices as to what actions yield a more significant and contributing effect. Initiatives like the Fashion Pact, and the virtuous circle they are bound to instill into the market, should lead to all stakeholders and Governments take notice and take legally binding action.
«At the European level, the EU Commission bases a lot of its initiatives on SBTs which then slowly become community practices and eventually directives and possibly laws for member states — there is some convergence towards the environmental quantification of the impact, and companies follow. This advances the sustainability agenda even before it becomes local law», concludes Simone Pedrazzini.
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