Business

Apparel Industry Predictions for 2022

Sustainable Apparel Coalition (SAC) plans to continue to evolve its various sustainability tools in 2022, in keeping with the trends that are shaping and transforming the global textile and clothing industry. SAC recently collated from experts and thought leaders the key actions and ideas we must pay attention to in 2022. Collective Action 2022 should be the year in which we bring together the most promising initiatives, standards and tools for decent work that we have collectively created over the past years. By combining them in a coherent way that brings value to all stakeholders, we can support the industry in a common business logic, a shared vision of sustainable production and fair business practices. Let’s join forces and connect workstreams at theindustrywewant.com ! – Alexander Kohnstamm, ED, Fairwear Foundation “For years we have expressed the importance of collaboration, but this year the need to surpass traditional boundaries and create new alliances is more apparent than ever. These can be within the fashion industry but also in the form of atypical alliances through which we can identify mutual challenges and learn from successful solutions that are being demonstrated. It is time to break down silos, enable impactful partnerships and drive progress on a greater scale.” – Federica Marchionni, CEO, Global Fashion Agenda Science-Based Targets (SBT’s) When it comes to climate change, I foresee 2022 will be the year of actions rather than words. The Science Based Target (SBT) framework that many companies are following finally inspires actions. There is realisation that we have a huge challenge ahead of us. Systemic change in any industry requires a multi-level approach where cogs in many parts of the system need to turn, not just by itself, but by connecting with other cogs in the system in an economically sustainable way. Private enterprises, government regulations and financial market forces are some of the key levers to get the cogwheels in motion. I foresee more traction in establishing economic incentives between enterprises along the supply chain. – Delman Lee, TAL Apparel There has been tremendous growth in the number of companies in the apparel sector setting science-based climate change targets (SBTs). In 2017, roughly a dozen apparel companies had approved SBTs or commitments – this number is now over 170, and spans geographies and company types (brands, manufacturers, material suppliers, etc). This is enormously encouraging, though the sector must now act with urgency to deliver on these commitments. The sector knows what it must do to reduce emissions – reports such as the Roadmap to Net Zero lay out the steps. We now need collective industry investment of attention, capital, and innovation to transform the sector to a more sustainable and equitable future. – Michael Sadowski, World Resources Institute Transparency One trend that dominated headlines this past year, especially surrounding the lead-up to COP 26, is the rise in greenwashing. This has, of course, followed the growing consumer awareness of fashion’s impacts on people and planet. At Good On You, we see brands making bold claims about their sustainability efforts, but then not consistently or fully disclosing that information, leaving consumers confused and distrusting. Many large brands, for example, are setting ambitious greenhouse gas emissions targets, but then nearly 70% don’t state whether they are on track to meet them. In 2022, we need to move past the greenwashing and spin, or risk consumers growing more skeptical of sustainability claims. This underscores the industry’s need to not only promote greater transparency, but to make this information accessible and actionable for consumers at scale. I’m really excited about the role the SAC’s transparency program will play in driving the industry in this direction. — Sandra Capponi, Good On You As marketers see the growing demand and price premium opportunities for better products, the practice of “greenwashing” is accelerating. Getting to a future where markets reward only those who are meaningfully changing their business and products, starts by making the invisible, visible. Technology and data is the unlock here, connecting the products we buy to the supply chain behind them. But it’s not a change in customer behavior that will create the tipping point. It’s industry’s commitment to standards and comparable data; it’s policymakers providing a clear path and regulatory incentives and its capital redirection to de-risk investment and reward leaders. At Higg, we’re helping make it easier for committed brands, retailers and manufacturers to get a complete view of their value chain impact. Only when true impact is understood, acted upon and shared transparently, will we be able to move beyond the incremental improvements of the last decade. –Del Hudson, VP Marketing/Communications & Stakeholder Relations at Higg Manufacturing The fashion industry is at an inflection point at the moment where we see tremendous efforts towards circular business models and we are also seeing a strong momentum building up to shift from synthetic materials to renewable, nature-based materials with lower environmental impacts. This has resulted in sharp growth of recycled fibres, viscose, lyocell, organic cotton, vegan leather, etc. At Birla Cellulose, we are aligning to increased demand of such materials by aggressively scaling eco-enhanced fibres like Livaeco and circular fibre Liva Reviva. We are also seeing the increasing use of transparency tools by brands, such as block chain based platform GreenTrack and Higg MSI data, Higg (3.0) FEM data, for making buying decisions and communicating the sustainability aspects to end consumers. – Mukul Agrawal, Chief Sustainability Officer, Birla Cellulose My expectations for 2022, specifically for Bangladesh, are very bullish. Due to a confluence of geopolitical issues, Bangladesh is in a unique position in being able to provide a level of transparency, sustainability, compliance, quality and volume, with an acceptable cost. Bangladesh has a high likelihood of achieving its much vaunted target of US$ 50 billion in exports in the calendar year of 2022 and a focus on sustainability is central to this success. – Miran Ali, BGMEA There will be more focus (and pressure) on strong decarbonisation and climate action in manufacturing. While the majority will focus on energy efficiency and renewable energy, sustainability leaders will be looking beyond the current technology to envision/invent deep decarbonization and net zero pathways. The enhanced asks on audits/certifications and reporting will be a burden and will continue to draw critical resources away from sustainability solutions and performance improvement. This is why convergence on assessments will be a key priority for manufacturers for 2022. -Vidhura Ralapanawe, EVP, Epic Group Policy In 2022, more regulations for our sector will be drafted, voted and applied. Europe will keep driving the push, while new movements in the US are also emerging, like in NY State early this year with the proposed Fashion Sustainability Act. The appetite to quickly regulate our sector is strong, impacting marketing efforts, material and supplier management, design, and virtually all departments in an organisation. As a leader in a retailer, brand, manufacturer company, you still have time to strategically include those core demands in your plans; this shall be at the top of your 2022 agenda. The Policy Hub, the SAC, and our partners are here to help you navigate the situation. -Baptiste Carriere-Pradal, Chair of the Policy Hub I also foresee that upcoming policies will force the industry to adapt by enhancing transparency and providing clarity for consumers. With upcoming EU legislation including the Sustainable Products Policy Initiative, I expect that there will be clearer requirements for brands to adhere too when making sustainable claims – which I hope will minimise greenwashing and empower consumers.” – Federica Marchionni, CEO, Global Fashion Agenda Due Diligence 2022 marks the 5^th year since the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector was finalised based on consensus between business, trade unions, civil society and governments, creating the due diligence standard for the sector. This year I expect to see much wider uptake of due diligence by companies in the sector, driven by at least three key developments:

Increasing mandatory due diligence expectations from governments to businesses to identify and address human rights and environmental impacts in their supply chains, in line with the OECD Guidance.
A growing sense of urgency for the private sector to address its climate impacts, and
Lessons from COVID that shone a light on the inadequacy of current business models in the sector to support decent working conditions and environmental stewardship, with the linear sourcing model largely unchallenged and unchanged.

These issues are not acknowledged nor resolved overnight, but there are moments of collective clarity, such as the one forced upon us by the pandemic, that we can’t let pass us by. At the OECD’s 8^th annual forum on due diligence in the garment and footwear sector, taking place virtually on 23-24 February, we’ll gather to explore these issues and continue to push the sector forward. -Dorothy Lovell, Garment and Textiles Lead, OECD Centre for Responsible Business Conduct Finance & Investments “It is time for collaborative action in the industry. The pandemic hasn’t resulted in any significant shift towards more sustainable business operations, which is a missed opportunity. Brands should jointly agree on a pragmatic and actionable plan to cooperate with their manufacturers and stakeholders and start implementing actions towards a circular, sustainable and responsible sector. Real frontrunners don’t await new government-instigated regulations and requirements but move by themselves. Investments in a transparent, fair and sustainable value chain pay off, providing financial, environmental and social returns. This could range from circular designs, disruptive technologies and recycling equipment to paying living wages. Sustainability is the only way forward for the sector, also as consumers will increasingly demand transparency and fair and responsible products. 2022 is the year to make a real start.” – Bob Assenberg, Fund Director, Good Fashion Fund At HSBC, we have committed $750 billion to $1 trillion of sustainable finance because we believe that we can be a catalyst to the change needed in the world. The apparel sector has been a real leader in pushing for that change, with enormous credit to the SAC for creating the practical solutions and tools the industry needs. For HSBC, we believe in partnering with our clients and industry leaders like the SAC to drive our financial programs forward, like our sustainable supply chain finance partnerships that focus on both the environmental and social impacts of global supply chains and use capital to drive for improvement. As the apparel industry, and its clients, continue to push for transparency and change, the financial sector has a key role to play in providing the capital needed to make that change a reality. – Kelly W. Fisher, Head of Corporate Sustainability, HSBC Bank