Although March may mean St. Patrick’s Day, that’s not the only reason some apparel companies are hoping you’ll be wearing more “green.”  While child labor and other social concerns have been on the radar screen for a while now,1  apparel/footwear companies are now increasingly focused on the environmental side of ESG issues as well, hoping not only to “green” up the business, but, hopefully, to earn investors some more “green” as well.

What is Sustainable Fashion?

“Saving the planet is very much in vogue.  It’s also in Harper’s Bazaar, Elle, and Mademoiselle.”
—Woody Hochswender, New York Times, March 25, 19902

Sustainable design in apparel is nothing new. From Giorgio Armani with hemp suits in the 1990s, to Birkenstock’s 230 year history of not “just jumping on the green band wagon,” there are many designers and corporate names incorporating sustainability into their businesses.3,4     In fact, Googling the above question yields 54.3 million results, defining the term:5

                “Sustainable fashion, also called eco fashion, is a part of the growing design philosophy and trend of sustainability, the goal of which is to create a system which can be supported indefinitely in terms of environmentalism and social responsibility.”

But when it comes to Manolo Blahnik shoes made out of waste tilapia skins, or Stella McCartney’s faux snake skin, biodegradable sandals, Wall Streeters may be wondering just how oversubscribed these so-called “greenshoes” can actually be at $895 and $515 a pair?6

Sustainable Action Committee

Although sustainability may not be the first thing that comes to mind when one hears “SAC,” the Sustainable Apparel Committee’s mission is to promote ESG practices throughout all segments of the apparel industry.  With well over 100 members spread across a diverse set of brands, retailers, manufacturers, and non-profit/government entities, SAC members are actively involved in everything from eliminating product waste, to opening up fully eco-friendly stores, to launching eco-friendly clothing lines like Conscious Exclusive, H&M’s sustainable fashion line due to hit 150 stores on April 10, 2014. 7   As part of its efforts, SAC has developed the “Higg Index,” intended for use by apparel/footwear companies wanting to monitor sustainability progress.  With in-depth brand, facility and product modules focusing on environmental, social, and labor issues, the Higg Index is available not only to SAC members, but to anyone who registers with the site.

Fig 1: Select SAC- Member Public Company brand, Manufactures & Retailers8

Select SAC-Member Public Company brand Manufacturers & Retailers

Rapid Design Module

Although still in Beta form, the SAC recently put out a simplified, educational design tool that provides users with a sustainability snapshot of what the product’s environmental and social footprint might look like throughout its life cycle.  After answering questions about materials, manufacturing, packaging, and usage, the user gets insight from feedback scores, on how sustainable the product design is, and how it could be improved.

Fig 2:  Sample SAC Higg Index Rapid Design Module Screen9

Sample SAC Higg Index Rapid Design Module Screen

 Corn-fed, Grass-fed or even Pleather10?

Love the detail on that leather jacket?  Next time, think about delving into the details on how its original owner might have been fed—or whether it was ever even alive at all!  If more sectors had sustainable design tools similar to the ones described above, it might make a big difference to the environment—and eventually, to investors as well.  In the end, companies who keep a close eye on environmental and social issues are likely to be better positioned in terms of managing their overall resource and social/labor risk profile, which typically translates into lower cost structures.  So while the jury may still be out on whether “green” is the new “black” from a top-line perspective, from a triple bottom line perspective, being “green” is likely to become much more of a key component of staying in the black!

Cindy Motz CFA, Global Advisory Council Cornerstone Capital, Financial Services Consultant and Former II & WSJ All Star Analyst.

 

 

1 US Department of Labor.  http://www.dol.gov/ilab/media/reports/iclp/apparel/1c.htm
2 Hochswender, Woody.  “The Green Movement in the Fashion World.”  The New York Times Archives.  March 1990.  Accessed March 17, 2014.  http://www.nytimes.com/1990/03/25/us/the-green-movement-in-the-fashion-world.html?scp=117&sq=environment+fashion&st=nyt
3 http://www.ellecanada.com/fashion/trends/7-sustainable-luxury-brands-making-eco-friendly-fashion/a/57121
4 https://www.birkenstockusa.com/about/green-steps
5 https://www.google.com/#q=what+is+sustainable+fashion.  Accessed March 21, 2014.
6 Women’s Wear Daily, October 26, 2011.  Accessed March 16, 2014. http://www.wwd.com/fashion-news/fashion-scoops/manolo-goes-green-5334918
7 London, Emily. “H&M’s New Conscious Collection Exclusive is Eco-Design at Its Best.” March 20, 2014. http://www.refinery29.com/2014/03/64784/hm-conscious-collection-april-10#slide-1
8Sustainable Apparel Coalition.  http://www.apparelcoalition.org/, accessed March 18, 2014
9 Sustainable Apparel Coalition. http://www.apparelcoalition.org/rapid-design-module-rdm-beta/, accessed March 20, 2014.
10 Slang term for synthetic leather made from plastic. http://www.wisegeek.com/what-is-pleather.htm