Big-ticket events like COP26 and Earth Day gaining more prominence, so it’s no surprise businesses are upping their sustainability standards. Currently, there’s a vast array of reporting standards relating to environmental, social, and governance (ESG) practices. However, as soon as the last half of 2022, the International Financial Reporting Standards (IFRS) Foundation will set out new frameworks.
This will coincide with the formation of the new International Sustainability Standards Board (ISSB). By steering away from the alphabetic soup of current reporting standards (GRI, SDGs, TCFP), companies can prevent double reporting and simplify the process for good. Overall, the objective of these new frameworks is to facilitate consistent and comparable reporting across the board. Important to note is the need for the standardization of data.
To add to that, the EU Commission launched the Circular Economy Action Plan1 in 2020. This will be a total overhaul of how fashion and apparel businesses operating in Europe design, produce, market, sell, and dispose of their products.
So, just like with the new IFRS Sustainability Standards, businesses will need to clearly communicate sustainability practices with in-depth, quality data. The hope is that these new product information requirements will prevent fashion and apparel businesses from Greenwashing. Most importantly, these new initiatives pave the way for businesses, consumers, and investors to put green practices at the core of their decision-making.
Now, let’s delve a little deeper into what these changes mean for businesses in the fashion and apparel space. We’ll also look at the role of Product Information Management (PIM) solutions in this new age of data transparency.
It’s time to change the way you work. Full stop.
The introduction of these new legislations inevitably means you’re going to have to change the way you work. From sourcing materials to designing products and marketing them in a way you know will guarantee a sustainable end of life, a total revamp of processes is in order. If we take it step-by-step, here are some of the key things that are going to be top of mind every step of the way:
Sourcing materials often leads to some of the highest emissions from fashion and apparel businesses. For instance, the fashion industry alone accounts for 20% of the world’s wastewater. Not to mention the carbon-heavy processes associated with treating, dyeing, and transporting textiles and components. Adopting a circular economy starts at the very beginning of the product development lifecycle, and customers (and investors) will likely want eyes on the information relating to these processes.
Fast fashion is one of the main culprits in the “take-make-dispose” mentality that massively contributes to huge amounts of waste, otherwise referred to as the linear economy. As the old saying goes, quality over quantity is where it needs to be. It’s time to embrace a new era of products that are designed and built to last. Furthermore, the end of life of clothing and footwear items needs to be considered at the design stage to ensure we can get the best possible value from all the resources we use.
The way you market:
Greenwashing is a term regularly thrown around in the fashion and apparel industry, and the aim of the new sustainability standards is to put an end to this. People are doing more and more research around the green credentials of the products they’re buying, or the company they’re going to work for or invest in. They want solid proof that they’re contributing to the solution, not the problem, in doing business with you. This is where you can really leverage your product data and digital assets to tell your sustainability story. Give your customers, employees, and investors the solid proof they’re looking for when checking out your ESG goals.
The end of life of products:
Around 60% of clothing items end up in landfills. Adopting a more circular economy is what we all need to aim for to ensure this is no longer the case. The good news is that there are lots of things companies and consumers can do to move away from the linear model. As an example, fashion and apparel businesses can explore the use of recycling end-of-life products to create new ones. Where possible, you should always be arming your customers with all the after-care information they need. This could range from how to repair items, or how best to take care of items to ensure they get the best possible use from them. Again, this is where meticulous management of your product data will be key!
How far off are we from new sustainability standards?
Recent survey results have shown less than 20% of retailers are on track to meet various sustainability targets. The key areas of consideration to achieve sustainability in retail cover Scope 1,2, and 3 emissions which are defined as:
- 1: Direct emissions a company has control over i.e., onsite energy use, and fuel consumed by company vehicles
- 2: Indirect emissions used by companies such as electricity, heating, and cooling
- 3: Indirect emissions caused by a company’s operations like waste generated in manufacturing and production, logistics, employee commuting, and goods and services used by the business
Often, Scope 1 and 2 emissions are much easier for a business to regulate and report on. As such, around 40% of retailers surveyed are on track to meet these goals. Understandably, scope 3 emissions are much harder to control which is why less than 20% of retailers are on track to reduce these.
Although this highlights a need for retailers to drastically change some of their core practices, there are encouraging statistics emerging that indicate change is happening. For instance, around $8.5 in supplier contracts were canceled in the UK alone amid ethical and sustainability concerns. All in all, over 70% of businesses are on the same page when it comes to sustainability. They agree these initiatives will drive value in the long term, be that from a customer, employee, or investor perspective.
What do environmentally savvy customers want to know?
New legislation and reporting standards mean businesses need to provide more granular detail around their products as a whole. This massively benefits businesses that are championing green initiatives as this is fast becoming a key focus for many consumers.
For those looking to make environmentally sound purchases, you need to provide them with detailed information so they can make informed buying decisions. Some of the details they’ll be looking for might include the following:
How products are sourced and what they’re made from. This may include things like the working conditions in factories and along the supply chain. It will likely include details of product transportation and logistics, like product air miles, etc.
Key product details:
This is where it can get very granular. To be truly environmentally friendly, you need to give details on every single component of a product. This may include the materials used, the methods of extracting the raw materials, the dyes used – the list goes on! Overall, it’s best to provide as much detail as possible to offer that extra layer of reassurance.
It’s great buying sustainably sourced and manufactured products, but it’s pointless if masses of Co2 are emitted upon delivery. This is where it’s important to highlight the different delivery options you offer. Important to note that you need to let customers know how long environmentally friendly options will take if there is a significant difference.
To ensure customers the most from their purchases, let them know what they can do to look after their products to extend their lifespan as much as possible. After-care instructions or how to repair garments will move consumers towards a more circular mindset. You could also consider offering a repair service to further extend the lifespan of products.
How you can step up to new sustainability standards with PIM
Businesses with existing sustainability reporting processes in place will likely find these new changes much easier to deal with. If this is the case, it’s also likely that surfacing the details environmentally savvy consumers want to see will also be easier. But where does PIM come into this, I hear you ask!
Well, there are powerful tools that will help you standardize product data to meet new reporting standards. These come in the form of workflows where you can specify rules for what product data should look like. This will mean that, regardless of how many data sources you have, you can ensure consistency and conformity across your entire product range. What’s more, you can create data sets in line with your specific business requirements which will further reinforce accuracy and consistency.
From a customer perspective, workflows will also be super handy. This is because they will give you full visibility over the accuracy and completeness of product data. Furthermore, you can specify which bits of product data you want to publish to different sales channels. This might include videos showing workers in factories, or of your products being produced.
Not to mention, you have huge storage capabilities within your PIM. As such, you can store, manage, and distribute all sorts of media files that showcase your green credentials. Anything ranging from images and video to PDF documents showing regulatory compliance and industry-standard certifications. These huge storage capabilities also enable you to store the vast array of details environmentally savvy consumers want to see. From pre-purchase right through to post-purchase, you can serve them all the details they need to make ethically responsible purchases.
We’ve got a dedicated whitepaper on how you can leverage your product data to meet new sustainability standards. Follow the link below to access yours free today!