Week 27: Criminal fashion

Dear all, 

This week we begin in the land of fashion fairytales and tall stories, uncovering some hard and insightful truths along the way. Are you sitting comfortably? Then I’ll begin…

Once upon a time, there was an emperor who loved nothing more than wearing new clothes. He had a whole wardrobe full of clothes, but he always wanted more. One day, two unscrupulous weavers (let us call them Henry and Maurice) came to the emperor’s city and claimed that they could make him a suit of clothes every week from the most sustainable fabric in the world, all for a bargain price. They said the fabric was so sustainable and special that only those who were good, intelligent people could see it. What’s more, once the emperor was bored with his new clothes, he could simply drop them in a recycling bin so they could be reused or recycled. How wonderful! How very ‘circular'!

The weavers set to work on the sustainable suits (actually they outsourced it to Myanmar) and a day later presented seven of them to the emperor. The emperor paraded through the city in his new clothes and people marvelled at the sustainability of the suits, every though there was nothing to see and no substance to the claims. 

Some people were troubled by what they could not see - how could all these clothes truly be sustainable? But Henry and Maurice made the clothes sound great and the people wanted fashionable new clothes at bargain prices too. Plus nobody wanted to be seen as bad or unintelligent so they all pretended they could see how sustainable the clothes were… 

A land of make-believe and ‘green wishing’

In 2013, H&M was the first fashion retailer to launch its global clothing collection campaign. The company promised at the time that 95 percent of the thousand tonnes of textiles thrown away each year could be worn again or recycled.

In the “Close the Loop” graphic used at the time, consumers were even led to believe that through “innovation," their discarded textiles would be turned into fabrics and then into new products that would be used for the “Conscious” collection, for example.

Fast forward to 2023 and reality bites 

The Swedish daily Aftonbladet and German tabloid Bild recently investigated - independently - where “recycled” H&M clothes actually end up by outfitting some of them with geo trackers. The findings of the two news outlets were the same: instead of tackling the problem locally with recycling partners, old clothes are sent halfway around the globe. Some were traced to the world’s worst dumping grounds.

Used clothes have created an unprecedented environmental disaster in Ghana - and H&M is one of the most common garments. The fashion chain’s partners have dumped more than a million garments here since the turn of the year. 

I’d encourage you to take a look at (and translate from Swedish) this excellent reporting. Read more here and here.

Meanwhile, H&M CEO, Helena Helmersson, has denied the findings of the investigation and suggestion that clothing collected by the company’s take-back programme is being dumped in Africa. Appearing on Swedish talk-show, Nyhetsmorgon, Helmersson told the host, “None of these products end up in landfill, they are all recycled or reused where there is a demand.”

The corporate propaganda continues

H&M is not the only one spinning tales. Shein is at it again. The fast-fashion company has gone from spending money to buy the influence of nonprofits and emerging designers to its latest—and particularly distasteful—tactic: spending money to buy the influence of influencers.

Shein recently flew TikTokers to visit its operations in China in a PR move meant to counteract the unsavory facts of worker exploitation and enormous environmental impact that researchers, journalists, and authors have uncovered.

In our fun-house modern media landscape, these influencers—literally wined, dined, and flown in by Shein—purported to be investigative journalists while on that PR tour. But the content they produced is not journalism; it’s a case study in propaganda. More here from Maxine Bédat.

Speaking plain truth

I had the pleasure of speaking with Maxine on ESG Radio. Maxine is founder and director of New Standard Institute, a ‘think-and-do good tank’ dedicated to turning industry into a force for good. A former lawyer and cofounder of ethical fashion brand Zady, Maxine is also author of Unraveled: The Life and Death of a Garment, exposing the fractures in our global supply chains, and our relationships to each other, ourselves, and the planet.

Here are some of the highlights from our conversation. You can listen to the full episode on ESG Radio to hear more about the challenges and risks faced by the fashion industry, as well as some of the solutions!

Maxine, do you think the lack of transparency in the fashion industry is intentional or is there a core challenge with lack of data?

I think it's convenient to not have the data. This industry, unlike the auto industry or the oil and gas sector, is seen as fun and frivolous and something that everybody can participate in. There hasn't been the same kind of academic pressures or journalistic pressures to try to understand the impact. It's convenient for the industry not to know because if you don't know the data, you can't be accountable for it.

The math doesn't seem to add up when companies are saying that they are going to be reducing their emissions, and yet they're going to grow their top-line sales figures. Nobody is demonstrating a plan of how exactly that's going to happen. And they're not doing that because it's impossible.

What is your perspective on client demand versus the responsibility of fast fashion brands?

If this was just about client demand and they're just fulfilling a demand, why do they have marketing departments? Why did they spend money on marketing and advertising? They wouldn't need to do that if that was just some innate demand that they are filling. You can't spend oodles of money marketing a product, pay influencers to peddle it and then come and say, ‘We're just fulfilling what the market is demanding of us.’ They are creating the demand and then fulfilling it. I think it's just quite a laughable response.

If you look at the fast fashion industry as a symbol of the market economy, capitalism today, something isn't working. What needs to change?

The bottom line is the externalities - the cost of the planet and the cost of the people - are not being priced in. What we need to do is use legislation and law to price those in to level the playing field so that exploiting labour and land is not going to be the winning business model. At the moment that is what is winning.  

You can see companies like Shein making H&M and Zara almost look like slow fashion in comparison. They are taking over market share because fashion is such a great demonstration of what happens when we don't price these things. Then it goes to the fastest, cheapest product and companies and that just fundamentally does not align with our planet.

Can politicians and regulation address the issues caused by brands like Shein?

Yes, that is why we have government. That is why they exist - to correct these market failures. There already are voluntary initiatives that have been created. If we can just put the power of law behind it, it can be a very important and helpful model. 

If you require companies to sign up for these things; if that is putting a cap on the amount of emissions that a company can ultimately produce; if you make that the law of the land and that is the basis for your ability to sell a product into that market - that shifts the market dynamics a lot. 

Those very basic fundamental methodologies have already been developed. They just need the power of law behind it because whilst companies are already voluntarily signing up, I don't think they ever really consider that they're going to achieve it.

The EU has a host of pending legislation that relates to several things about green claims, extended producer responsibility, and designing for longevity. I think some of it is helpful and useful. Some of it is less helpful. 

These are the parts that I think are useful. On one end, these green claims initiatives, that are happening in the EU and the US, the Federal Trade Commission, the FTC, is also updating its green guides and going after greenwashing more strongly. You also have independent lawsuits that are popping up across jurisdictions. I think that is going to be helpful to stop the greenwashing and lower the volume of empty claims. 

On the other side, I think a suite of legislation, some of which the EU is doing, such as extended producer responsibilities where companies have to pay into a fund that can then help fund circularity is going to play an important part. What is then needed, which is what we're working on in New York with the New York Fashion Act, is a requirement to achieve the absolute contraction methodology of the science-based targets and just putting a cap on things. All of those pieces together are what can substantively move the needle.

Do you think sustainability leads in fashion companies truly believe in what they’re doing?

I think people come into the space believing, and wanting to believe, that that is where change can happen and that they can drive change internally. Then they get there… From the quiet conversations that I hear, one person said, ‘I'm beginning to believe that I'm leading Mission Impossible.’ 

That's because it is this idea of green growth - which might be possible, I'm not claiming anything outside of the fashion industry - but within this very narrow band of the fashion industry, there is no clear demonstration that it is possible. 

We are human animals; we have an ability to buy into convenient narratives all the time. It's the biggest marketing coup that we even talk about sustainable fashion. There is just no such thing.

In the EV space, you don't talk about sustainable cars, there's always an understanding that you are having an impact. But somehow the marketing has won in this space that we still talk about sustainable fashion. I have to push back whenever people describe me as an advocate of sustainable fashion. No, I'm an advocate of impact reduction. Purchasing a product marketed as sustainable is still having an impact. And the marginal reduction of impact is often extremely marginal.

How do you see the role of financial institutions in this space? Are they doing their job in making everybody talk about ESG?

I've offered my services to say these are the actual questions to ask. There hasn't been a lot of follow-up on that offer! I have not a tonne of faith in the financial markets in the same way that I don't have a tonne of faith in the brands themselves. 

It is capitalism and we need to have the guardrails on capitalism in order for capitalism to do the good that it can do. That only comes from law. It's not to say that financial markets can't play or couldn't play a helpful role if they wanted to. However, I can also see the natural flow of how markets work, not truly wanting to make real meaningful change.

Underlying all of this, the biggest problem that we need to undo is this myth that sustainability was ever going to be win-win. It costs.

Do you think litigation in relation to the fashion industry will increase because of the changing regulatory space in the US and EU? 

Yes. I'm talking to you from Minneapolis, and it is hazy, and it smells like a bonfire outside. People are angry and they are going to the courts. We are going to see a lot more of that in the future. It’s individual citizens bringing cases and then regulators.

Meanwhile, when you speak to the actual executives and on the earnings calls, it's about ‘growth, growth, growth’. I don't think there's a real awareness of what is coming down the pipeline and how angry people are at the current state of the world and where it's going.

How can people make a tangible impact to improve things on the ground? What is the framework that you use to get them to move in the right direction?

Number one is to see yourself as a citizen. We have been so trained that the way in which we even solve problems is through a consumer lens. When I am asked, ‘What can I do, where should I shop?’, that is not the right question, it's fairly meaningless. What is much more powerful is engaging as a citizen. Get out to representatives and say that we need laws on this. We have learned that across the board, even the success of the EV market came from legislation that created market incentives to move in that direction. That's the first thing, to open our eyes that we are citizens and that we have a responsibility and there’s a civic duty in that in that respect. 

Second, in terms of what the consumer can do, is an invitation to like your clothes again. I've spoken to many people on this journey, many shoppers, mostly women, and they all have not a particularly happy relationship with their wardrobes. There's a lot of stuff that doesn't fit, doesn't feel like it looks good. It is that constant, barrage of ‘buy me, buy me, buy me’ that now is embedded in social media and the influencer economy. There is an invitation to ignore those messages, to remove those influencers from one's life, to unsubscribe from the brand emails, and to learn what you actually like to wear.

Listen to the full 30-minute conversation on ESG Radio. Follow ESG Radio on Apple podcasts, Spotify or Google podcasts to be notified when new episodes come out.

I wish you all a ‘fairytale-free’ week!

Best regards, 

Sasja