Apresentação Beauty Fair - Nilsen

2009 management briefing
Meeting the environmental
challenge in the apparel
industry

Management briefing
July/August 2009

Page i

Meeting the environmental
challenge in the apparel industry

Management briefing

July-August 2009

By Ben Cooper

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Page iv Table of contents

Table of contents

Single-user licence edition.......................................................................................................... ii
Copyright statement ............................................................................................................... ii
Incredible ROI for your budget – single and multi-user licences ............................................. ii
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Table of contents ........................................................................................................................ iv

Introduction.................................................................................................................................. 1

Frames of reference in the environmental debate ..................................................................... 2
Categorising the issues .......................................................................................................... 2
Environmental regulation ....................................................................................................... 3
Benchmarking and consistency .............................................................................................. 5

Environmental hotspots .............................................................................................................. 8
Chemical usage ..................................................................................................................... 8
Water ..................................................................................................................................... 9
Waste and recycling............................................................................................................. 11
Supply chain complexity....................................................................................................... 12

Changing consumer attitudes and green marketing ............................................................... 15
Growing demand ................................................................................................................. 15
Consumer commitment and pricing ...................................................................................... 16
Green ranges and eco labelling ........................................................................................... 18

Industry action ........................................................................................................................... 22
Corporate platforms ............................................................................................................. 22
Collective action, information sharing and competitive issues .............................................. 23
Engagement with NGOs and multi-stakeholder options........................................................ 25


Introduction

Introduction

The progress the clothing sector has made over the past ten years in
improving labour conditions in its supply chain has shown what can be
achieved by companies acting both individually and collectively to address an
area of acute public concern.

To a degree, the intense media focus given to social issues in the supply chain
has resulted in less public attention being given to the environmental impacts
of the clothing and textiles industry, and by the same token to the efficacy of
the industry’s efforts to meet those environmental challenges.

While the two areas have some issues in common, such as the problems
created by complicated supply chains and the need for multi-stakeholder
engagement, the environment, if anything, poses a raft of even tougher and
more complex ethical challenges for the clothing and textiles sector to meet.

This briefing provides an overview of what those challenges are and how the
industry is attempting to meet them, with perspectives from corporate
responsibility executives, industry advocates and campaigners.


Frames of reference in the environmental debate

Frames of reference in the
environmental debate

The clothing industry has already demonstrated a willingness to engage in
improving labour standards in the supply chain, but the scope of that
considerable task arguably pales in comparison with the challenges presented
by the raft of distinct though often inter-related issues related to the
environment.

There are a number of ways of categorising or subdividing the areas in
question, a fact which in itself underlines both the complexity of the field and
the manner in which many of these issues inter-relate.

Categorising the issues

The European clothing and textiles trade association, Euratex, has been fully
engaged in the environmental policy debate for a number of years. With regard
to the environment, Euratex has four prime areas of activity: the definition and
support of any action to improve sustainability in the supply of safe textiles in
Europe; the definition of an integrated environmental strategy in the context of
EU institutions and other decision makers; the dissemination of information on
EU environmental policy to its members; and the coordination of actions to
safeguard industry interests.

As an industry advocacy organisation, environmental policy issues and the
organisation’s relationship with EU environmental policymakers are an
important part of Euratex’s mission. And how the association categorises the
environmental challenge is therefore instructive.

In 2001, it launched its 2001-2010 health and environmental strategy. The
Euratex approach is informed by the main four areas earmarked for priority
action over more or less the same timeframe by the EU. These areas are
climate change; environment and health; protecting nature and biodiversity;
and resource and waste management.



Meanwhile, six working groups within Euratex correspond directly to EU
environmental policy areas. The working groups therefore cover chemicals;
integrated product policy (IPP); integrated pollution prevention and control
(IPPC); waste and recycling; ecolabelling; and trade and environment.

The environmental issues facing the clothing and textiles sector were also
categorised by Jef Wintermans, director of Netherlands trade association
Modint, when addressing the Global Responsibility Committee of the
International Apparel Federation (IAF) in Cologne in April.

The seven areas highlighted by Wintermans serve as a further useful frame of
reference for assessing the industry’s response and future action on both a
company and collective basis. The criteria are as follows: the use of more
sustainable raw materials; chemical usage; fossil fuel usage; volatile organic
compound (VOC) emissions; adsorbable organohalogen (AOX) emissions;
water usage in textile processing; and water wastage in general.

Environmental regulation

The Euratex environmental mission in particular underlines the importance for
industry of engaging with regulators, policymakers and legislators. It is easy to
view environmental consciousness on the part of companies primarily as a
component of a responsible business platform, a necessary element in today’s
business environment but still, to a significant degree, elective. However, the
environmental field covers a whole area of regulatory compliance for
companies, arguably every bit as exacting as that relating to financial
governance.

According to Adil Elmassi, who leads the environmental work at Euratex, this
creates competition issues between manufacturers in Europe, where
legislation is the toughest, and other parts of the world. “In the EU there is a
green production process, something that you do not find in China or in India
or in other places, because there is a battery of legislation that needs to be
respected. There is a minimum standard, stemming from all the legislation you
have, and Europe is much higher than anywhere in the world. Not even in the
US do they have such a high level of environmental and consumer safety
policy. Our main action is to negotiate policies in a way that we maintain
sustainable development.”



Dr David Santillo, senior scientist at the Greenpeace Research Laboratories,
believes one of the reasons why the clothing and textiles industry has to pay
closer attention to the environmental agenda is because so much of the
primary production occurs in industrialising countries where there is “a much
lower regard for environmental protection and waste management”.

However, Malcolm Ball, chairman of the Association of Suppliers to the British
Clothing Industry (ASBCI), believes the disparity between developing and
developed countries is fast disappearing: “We know there have been abuses in
the past and there probably still are, but the major manufacturers and
organisations that are supplying the European and US markets are serious
people, and the investment in good practice, looking after the environment,
has become a prime part of their planning.”

Ball adds: “What you see now in investment in China and India and other parts
of the world is that the impact on their environment from poor industrial
practices has been horrendous, and so there is a great initiative, a move to
correct these areas on their own behalf. It‟s not just a matter of keeping
western consumers happy. There‟s a dire need to protect their own resources,
their own population from bad practices.”

Steve Lamar, executive vice president at the American Apparel and Footwear
Association (AAFA), agrees. “I think a traditional view might tell you that that‟s
the problem but that‟s certainly not where the industry is,” Lamar says, adding
that the supplier base in developing countries is now being informed by new
regulations, new consumer demand and new retailer demands, as well as a
greater general sensibility towards sustainability and the environment.

Jef Wintermans also warns against black-and-white distinctions between
developed and developing countries: “It is way too simple to say that because
the legislation is in order, everything produced in Europe is environmentally
sound and everything that is imported is not.”

The influence of regulation is clearly key to the environmental debate, so
companies’ environmental strategies have to cover compliance with existing
regulatory standards and negotiation with regulators regarding future
regulation, as well as going ‘beyond compliance’ as part of any ethical
business agenda. Indeed, these areas are themselves interconnected. The
more proactive industry is in terms of improving itself, and raising its own



standards, the more influence its advocates are likely to have with legislators
and regulators when it comes to framing legislation.

Certainly the Outdoor Industry Association (OIA) in the US has found that its
strong stance on environmental issues has helped to forge a good relationship
with legislators. “Because our industry is viewed as a leader in this area we‟ll
get Congressional staff and members of Congress reaching out to our industry
as they craft legislation, to say we want to craft legislation that protects
consumers, but in a way that makes sense for industry,” says OIA director of
government affairs Amy Roberts. “And that‟s kind of the ideal situation, that we
see that we have input into the legislative process.”

And in the environmental field, this does not have to mean lobbying for a more
permissive regulatory approach. Roberts says that while companies in the
outdoor industry are effectively taking a lead through innovation and in spite of
an instinct to “see the marketplace work”, if there are companies are getting
away with lower standards then regulation is desirable.

Currently before Congress is the Optimal Use of Trade to Develop Outerwear
and Outdoor Recreation (OUTDOOR) Act, which would reduce tariffs on
imported recreational performance outerwear such as ski jackets. Roberts
says the OIA is supporting the creation, within the same legislation, of the
Sustainable Textile and Apparel Research (STAR) Fund, under which
companies benefiting from the reduced tariffs would contribute to funding
research into sustainable manufacturing processes. “We‟re willing to keep a
small tax on ourselves to fund, as a collective, precompetitive sustainable
research,” Roberts says.

Meanwhile, Levi Strauss, Nike and Timberland are members of Business for
Innovative Climate and Energy Policy (BICEP), a coalition in the US which is
lobbying for stronger climate and energy legislation.

Benchmarking and consistency

One important distinction between work on social improvements and
environmental issues, according to Jef Wintermans, is a lack of clear
established international standards. He believes International Labour
Organization (ILO) standards have greatly helped companies in their bid to



raise working conditions in their supply chains, and says the lack of an
equivalent in the environmental field is a drawback.

“What I notice is lacking in the environmental sphere is a commonly agreed
worldwide set of standards defining which behaviour we all should try for, not
from the perspective to block people off the market if they don‟t comply yet,” he
says, “but to help them focus their energy and enter into a process aimed at
improving.”

Wintermans believes industry organisations have a role to play in this regard.
“That‟s exactly what I am trying to do within the IAF now, and I‟m making some
progress I feel. If IAF could engage in a process to work towards defining the
criteria or the goals more or less equivalent to the ILO social standards then
the worldwide industry would have a point of orientation and could really start
making progress.”

To this end, Wintermans has been forging links with the International Union for
Conservation of Nature (IUCN). He says one advantage of the IUCN is that it
already has multi-stakeholder credibility, drawing its membership from
government agencies, NGOs large and small, economic development
agencies, scientists and academics, the private sector and representatives of
civil society.

Other industry associations have a role to play in this area. The OIA, for
instance, sees some form of environmental indexing as a key element in its
sustainability work. Amy Roberts reports that its eco committee is working
towards establishing an eco index, modelled on OIA member Timberland’s
Green Index, measuring criteria such as water usage and the use of
environmentally friendly materials, which all its members, large and small,
could use as a resource.

The index would have three elements: environmental guidelines, which are
qualitative principles and practices to be used as an educational tool,
promoting continuous improvement for companies and suppliers;
environmental performance metrics, units of measure of environmental impact,
including an industry-wide common methodology of calculating the metric; and
a comparative scoring system which would be used to inform product design.
The OIA plans to set aside a period to collect additional stakeholder input once
these principles are in place.



The AAFA takes a similar view towards benchmarking. Steve Lamar says
sustainability “means a lot of things to a lot of different people” and companies
“are at all different sorts of places” in trying to implement sustainable business
practices, whether in terms of restricted substances, water, packaging, carbon
footprint or other criteria. “So some of what we‟ve been doing has been really
trying to establish benchmarks to help them see what some of their peers are
doing, to help them break the problem down into smaller chunks, so they can
decide what they want to implement, or how they want to implement, or what
they are going to put as a priority.”


Environmental hotspots


While there may be a raft of environmental areas that all need to be addressed
by any industrial sector, it is clear that some are more pertinent to, or
problematic for, some industries than others, and so it is for clothing and
textiles. Moreover, the sheer breadth of scope in the environmental area
makes some degree of industry-specific prioritisation in itself desirable.

There is naturally some divergence of view among experts as to precisely
which are the most pressing areas of concern for the textiles and clothing
sectors, but in researching this briefing, there were three issues that were
consistently identified as key priority areas, and they are water, chemical
usage and waste/recycling.

Chemical usage

While the clothing and textiles sector does not attract the level of attention in
terms of environmental impacts as say the oil, automotive or nuclear industries
there is no doubt that on the issue of chemical usage the industry does have
significant exposure.

Dr David Santillo of Greenpeace points out that while consumers may view
garments made from natural fibres as more environmentally friendly than those
made from synthetics, both types are often treated with a whole range of
chemicals.

“And the problem is that often those chemicals are quite water soluble, so it‟s
done within a water matrix, often with quite little recovery of the contaminated
waste water, so they can be quite polluting,” says Santillo. “It‟s not always very
complicated substances, it can be a lot of salt for example, or it can be a lot of
degradable organic material which is going into rivers and streams, but those
can be equally devastating in terms of aquatic life.”

In 2005, Greenpeace Research Laboratories produced a report, entitled An
Overview of Textiles Processing and Related Environmental Concerns,
highlighting these issues, and Santillo, who was one of the report’s authors,
says there has been some improvement since then. “There has been some



progress,” he says, citing work by the Department of Environment, Food and
Rural Affairs (DEFRA) in the UK specifically addressing chemical usage in
textiles manufacturing. “I think what else has happened since 2005 is that a
number of retail outlets have taken their responsibilities more seriously on both
ethical and environmental grounds.”

Ingrid Schullström, CSR manager at H&M, a company which has put
environmental issues at the forefront of its corporate responsibility agenda,
says chemical usage was the first environmental area that the company
focused on. Schullström says chemical use is a priority area not only for
environmental reasons but also “a clear responsibility for a company” from a
health and safety perspective.

Santillo also believes there are safety issues to be addressed in chemical
usage. In addition to the environmental damage caused by the discharge of
chemically contaminated waste water into local water sources, he points to the
problem of workers in industrialising countries handling chemicals and
dyestuffs without sufficient protective clothing.

The list of environmental improvement options put to the IAF Global
Responsibility Committee by Jef Wintermans of Dutch trade association
Modint contained several recommendations relating to chemical usage. In
addition to paying careful attention to the storage and handling of chemicals,
companies should avoid unnecessary use of chemicals such as detergents
and surfactants, complexing agents and lubricating oils and should strive to
recycle chemicals wherever possible.

Water

Water usage is another prime area of environmental concern for the clothing
and textiles industry, not least because it is an issue in three different stages of
a garment’s life: the growing of natural fibres, particularly cotton; the
processing of textiles; and during garment care by consumers.

Steve Lamar, who heads up environmental affairs for the American Apparel
and Footwear Association (AAFA), believes the significance of water usage
during these three phases makes it a “huge” issue for the industry, and one
where a lot of companies are striving to improve practices. “Really if you back
at the supply chain, you‟re talking about cotton products for example, you see



water usage in growing cotton, then you see water usage in the production of
the textiles, and then you also see water usage in the care of the garment
itself,” he says.

Water usage in clothing production has become a key issue for clothing
companies. Nike, for example, monitors water usage at its supplier factories
using a traffic light system. According to John Frazier, head of Nike’s restricted
substances list and green chemistry programme, it takes 2,650 litres of water
to make one T-shirt and around 10,000 litres for a pair of jeans, while the
clothing industry uses around 40bn gallons of water per year in the production
process.

The question of water usage also brings two desirable environmental goals
into potential conflict, as Santillo explains. “People have generally assumed in
the past that if they are buying natural fibres that they‟re avoiding some of the
environmental problems that might be associated with synthetic fibres,” he
says. “What people have really got to realise is that what they are actually
getting is a different set of environmental, and in fact social, problems
associated with producing natural fibres.”

The growing of cotton, Santillo points out, can be “very fertilizer-intensive, very
water-intensive and very pesticide-intensive”, while wool production can raise
environmental issues related to animal husbandry and associated agriculture.

The reduction of unnecessary water and energy usage by consumers during
the life of clothing has become an important consideration for clothing
producers. Like Lamar, Ingrid Schullström believes that the fact that water
usage is an issue both in production and during the life of a garment makes it
“particularly relevant” to clothing companies.

However, the degree to which clothing companies have responsibility for the
water consumers use to wash clothes is a difficult question. “I‟m not sure I
would use the word „responsibility‟ because the consumer obviously has a
responsibility,” says Schullström. “But there is perhaps something companies
can do in terms of consumer education.

“We actually already do it on our website. A lot of people in Sweden wear
things once and then they wash it. Also normally the temperature mentioned
on the garment is the highest that you can wash it without harming the



garment but usually if it‟s not that dirty you don‟t need that temperature. And
just washing at a lower temperature saves a lot of energy and water usually.
So it‟s a question of educating customers about garment care, you don‟t need
to wash so often and at such high temperatures.”

So far, for H&M, the emphasis has been more on consumer education than
product development, and product development in this area, Schullström
points out, has to be carefully considered, as once again two desirable
outcomes could be in opposition.

“Synthetic fibre, for example, dries very quickly [and] doesn‟t need tumble
drying, so that is good but then we have to look what materials it is made of. Is
it is synthetic fibre made from oil? So would we promote a synthetic? So I think
one would have to think very carefully about what issue is it that you want to
give priority to over another.” By the same token, she adds, a product that is
‘non-iron’ may have been treated with a chemical finishing agent.

Waste and recycling

The Association of Suppliers to the British Clothing Industry (ASBCI) has held
a series of environmental conferences in recent years, and chairman Malcolm
Ball says the issue that has constantly come up is waste. “And that is waste
across everything,” he says, “waste in agriculture, where we‟re using an awful
lot of water and energy to create fibres, we‟re wasting energy and resources in
processing. Processing is inefficient or equipment is not being used properly.”

Part of the problem has stemmed from the evolution of the market in recent
years, Ball says, and specifically the growth in fast fashion. “Fast fashion is
extremely wasteful because by its very nature it creates waste because of the
amount of material coming through. It‟s forcing organisations to really look at
their planning but until they get on top of that, there‟s bound to be a waste of
resources in moving material around and ineffective deliveries and things like
this, where containers are not completely full, so you‟re actually shipping fresh
air.”

Fast fashion and the mass availability of cheap clothing, which encourages a
high turnover of clothing among consumers, also puts an onus on recycling but
so far the industry’s record on recycling of garments is poor. Ball believes this
is a key issue for the industry to address. “An awful lot of clothing goes to



landfill either from people who are discarding it when it‟s not really worn out or
just out of fashion, and from shops that just cannot move the material. If we‟re
not going to recycle it, it‟s just lost resource.”

According to UK retailer Marks & Spencer (M&S), as much as 80% of clothing
in the UK is simply discarded as waste away after use. Indeed, M&S has
included a recycling initiative, in collaboration with Oxfam, within its Plan A
environmental strategy, which Mike Barry, the retailer’s head of corporate
responsibility, describes as one of the company’s most exciting projects.

Under the scheme, M&S customers can take their secondhand clothing to
Oxfam stores and receive a GBP5 price-off M&S voucher on a GBP35
purchase. In the 12 months since the scheme’s launch, around 800,000 M&S
customers have donated clothes to Oxfam, which amounts to over 3m items.
As a result, Oxfam has raised GBP1.8m. Barry also points out that around
55% of customers participating in the scheme are bringing the vouchers back
to M&S which is much better than the traditional rate of redemption for
marketing vouchers.

Wintermans makes the point that much could be achieved in waste reduction
through more sophisticated garment size coding. “Size coding research and
harmony would do enormous good for the environment,” he says. “Taking
average dimensions you could steer production much more intelligently and
prevent the production of garments that are never worn and that would be
more interesting to do rather than to say that fast fashion is not OK.”

Supply chain complexity

Another general factor that exacerbates many of the environmental challenges
facing the industry is the complexity of the clothing and textiles supply chain.
For David Santillo, this sets the industry apart from many others that he
monitors for environmental impacts. And while it makes it difficult to assess
true accountability, by the same token it hampers the industry’s own attempts
to improve its environmental performance.

“The textiles industry is quite different from, for example, the oil industry or the
nuclear industry or the coal industry, in that what you‟ve got as being the very
visible part of textiles is the retail side,” Santillo says. “The retail side is
disconnected in many ways from the production side. When you‟re dealing



with the nuclear industry you know who is handling the fuel and producing the
waste, the same with the coal industry and oil industry. They are all big-name
companies that are directly responsible for the management of those activities
and for any waste and pollution that results.

“The tricky thing with the textiles industry is knowing precisely who is making
what and where, and often it can be a large, very complicated network of
smaller companies which are much more difficult to track down, and I think
that‟s why it‟s routinely been done by targeting the retailers at the far end.”

The recent exposé by Greenpeace of certain footwear companies sourcing
leather from farms linked to illegal deforestation underlines the problems that
convoluted supply chains can create. Amy Roberts of the US Outdoor Industry
Association (OIA) says the Greenpeace report showed “the complexity of the
system and the difficulty of making sure you‟re able to stay on top of each step
of the supply chain”.

Sarah Shoraka of Greenpeace UK says its findings showed that companies
were “not paying sufficient attention” to their supply chains, but acknowledged
that the complex nature of the supply chains in question did make the task of
tracing the raw materials concerned difficult.

David Santillo says the complexity of supply chains means making an accurate
read of the industry’s environmental performance is not easy. However, he
says that notwithstanding the progress on chemical usage, the textile industry
globally “is a major source of environmental pollution, a major source of air
pollution, of water pollution”, while “production of solid waste is also a major
issue”.

Santillo continues: “There needs to be some kind of global coming together of
information, sharing of information, to get an idea of just what the scale of that
problem is, and to look at ways in which supply chains can be simplified, in
order that, firstly, they can be more sustainable and, secondly, the retailers can
keep a much more careful audit of their own supply chains, because the way
it‟s set up, the way things have developed historically, just makes that
incredibly difficult for anybody to do.”

Precisely that type of collective action is discussed later in this briefing. But it
should also be borne in mind that the strides the industry has made, both on a



collective and individual company basis, in terms of rendering complex supply
chains less problematic in terms of the ethical treatment of workers has shown
what can be achieved.


Changing consumer attitudes and green marketing

Changing consumer attitudes and
green marketing

As with concerns over labour standards in the supply chain, changing
consumer opinions and priorities on green issues is proving to be a significant
influence on corporate behaviour, both at an individual company level and
collectively.

In addition to building environmental awareness into their corporate
responsibility platforms, pioneering companies, such as Nike and M&S, are
making much more explicit reference to green issues in their direct consumer
marketing, through labelling, consumer education and the marketing of green
ranges, such as organic cotton garments.

Not only is this a response to changing consumer demands but it is also
catalysing further development of the green market. The marketing of organic
cotton garments within core ranges by retailers such as Top Shop and H&M
serves to underline how eco consumerism is spreading into the mainstream.

Growing demand

As Paula Andrea Trujillo, internationalisation director at Colombian clothing
and textiles trade association Inexmoda, puts it: “Some years ago, ideas such
as „green‟, „organic‟ and „eco‟ seemed distant and expensive. Today‟s
consumer is changing and commercial brands understand these new
demands.”

Like in other areas of ethical consumerism, the strength of the trend varies
significantly from market to market. “It is really something that is not clear cut.
It all depends on geographic area for example,” says Adil Elmassi of Euratex,
citing Sweden, Denmark and Germany as having “more of an environmental
culture in their way of thinking, in their way of doing things”.

Overall, however, Elmassi adds that “there is an increased awareness when it
comes to environment and health issues” which, he says, was prompted to a
degree by health and food scares, such as BSE, which have made people



“really aware of and more focused on certain aspects related to environment
and health”.

Mike Barry, head of corporate responsibility at M&S, cites consumer opinion as
one of the four key drivers behind the retailer’s sustainability agenda. “80% of
M&S customers, about 21m people in our shops every week, say in some
shape or form they want us to take a lead on environmental and social issues
on their behalf.” Barry adds that there has been a 1% rise in customer
expectations on sustainability in the last 12 months, suggesting that economic
concerns have not seriously disrupted the green trend.

Beth Holzman, manager of CSR strategy and reporting at Timberland, says
Timberland has certainly been affected by the downturn but believes the
differentiation its sustainability commitments provide is, if anything, a buffer to
the depressed market conditions. “I really think that Timberland has been
working on these things for a long time and while resources are certainly being
scrutinised and tightened in some areas I think that we really believe that our
CSR objectives and the improved products on both the social and the
environmental side are going to help distinguish us as we move forward.”

Referring to strong sales of its Earthkeepers eco friendly range, Holzman
adds: “We are seeing consumers starting to reward us for putting these
products into the marketplace and doing so at a price point that isn‟t much
higher.”

H&M’s Ingrid Schullström says the interest shown in the Swedish retailer’s
organic cotton range underlines a clear consumer trend. “If you look at our
organic cotton collections that we started a couple of years ago, the demand
has been really good. The customers really welcome those collections and that
response, we feel, is a sign of the consumer being aware and wanting to make
a sustainable choice in their shopping.”

Consumer commitment and pricing

However, there is often a discrepancy between what consumers say they want
and how they behave when they are actually shopping, so the issue of price
remains central in the environmental debate.



Malcolm Ball of ASBCI says while there is far greater concern among
consumers about the production of the goods they buy, price may well be the
determining factor. “Judging from a lot of material that we‟ve seen, if there are
two goods sitting on the shelf in one store, one says it‟s green and one doesn‟t
have any labelling at all, and the one that isn‟t green is cheaper that will sell,”
he says. While Ball does not expect the downturn to derail the strong trend
towards environmentally friendly goods, he believes financial hardship can be
expected to exacerbate that price sensitivity in the short term.

Steve Lamar of AAFA shares Ball’s reservations about consumer willingness
to pay a premium for environmentally friendly clothing. “Consumers will always
say they want something that‟s more green,” Lamar says, “but are they willing
to pay for something if it costs more?” With this in mind, he believes regulators
have an important role to play in improving consistency in terminology so
consumers can have absolute confidence in the environmental claims that are
being made.

Lamar adds that persuading consumers to act when purchasing in the way
they say they want to act in opinion polls is “at the heart of everything my
members do”. Ultimately, however, he adds if companies strive towards a
“greener doesn‟t have to be more expensive” concept then the issue “goes
away”. Euratex’s Adil Elmassi says consumer behaviour needs to “be targeted
by companies to translate the way they are thinking into buying goods”.

The evidence from the Fairtrade movement supports the contention that
burgeoning ethical consumerism is given a significant boost when price parity
between mainstream and ethical choices is achieved. Holzman says pricing
parity is what Timberland is striving for. “Our goal is to design products that
don‟t necessarily have to cost more money to consumers as well as to
ourselves in our business process.”

Ingrid Schullström believes there has also been a problem with the design of
environmentally friendly ranges in the past, and suggests that in order to
appeal to mainstream consumers retailers should strive to normalise the eco
friendly idea.

“I think sometimes, for some reason designers have thought that this is organic
cotton so we have to make a garment that is really comfortable and practical,
somehow connected to some sort of healthy living,” she says. “Let‟s just make



the latest fashion; the only thing we change is that the cotton we use is
organic, that‟s all – same colours, same style – so that our fashion-conscious
customer can go in and buy their fashion garment that they‟re really looking
for, and as an added benefit that garment is made out of organic cotton.” She
believes this approach has been an important factor behind the success of
H&M’s organic cotton range, because people are not “making a sacrifice
buying it”.

Green ranges and eco labelling

Growing consumer awareness places greater onus on labelling and
merchandising of greener products, and as the eco trend has gathered pace, a
number of companies have developed green ranges. By giving consumers
more environmental information on products, companies are not only
appealing to already environmentally aware consumers but also fostering the
burgeoning interest that many other consumers are beginning to show.

For example, Nike’s Considered Design range is a line of environmentally
friendly products covering all six of its major categories: basketball, running,
soccer, women’s training, men’s training and sportswear. Nike CEO Mark
Parker has said of this range: “We are designing for the sustainable economy
of tomorrow, and for us that means using fewer resources, more sustainable
materials and renewable energy to produce new products.”

Timberland’s Earthkeepers range is marketed as a line of premium Timberland
footwear and apparel that reflects “our commitment to „Make it Better‟”.
Launched in 2008, the Earthkeepers label has to meet design criteria in
relation to recycled, organic and renewable material content, solvent-free
adhesives and reduced climate impact. For example, the Earthkeepers
Mountain Sneaker includes a ‘Smartwool’ fabric lining made from sustainable,
biodegradable merino wool, organically tanned, premium full-grain leather and
fast-growing hemp. The ‘EcoStep’ outsole is made from 30% recycled rubber.

Timberland is among a number of companies making strides in eco labelling
generally. Indeed, Beth Holzman considers the work the company has done on
eco labelling to be one of its foremost achievements in the environmental
sphere over the past 18 months.



The Timberland eco label system, called the Green Index, was introduced in
2007. So far only applied to footwear, it has three components, based on life
cycle analysis: a climate impact score; a chemical use score; and a rating
related to the use of renewable resources. “The goal there is that we‟re
communicating with consumers to empower them to really be able to make
responsible purchasing decisions,” Holzman says.

While to a degree the Green Index gives Timberland something of a USP,
Holzman would like to see green labelling becoming far more widespread in
the marketplace. “One of the challenges we face is that in order to really have
comparable shopping take place for our consumers, all companies should be
using these types of labels.”

The principal challenge as eco labelling initiatives proliferate, however, is
analogous with the observations about benchmarking made in the first section
of this briefing: that there needs to be more standardisation and uniformity of
green claims so that consumers can make accurate comparisons.

“There has to be a common approach,” says Malcolm Ball. “We have seen in
the past that we‟ve had care labelling that has been different in the US, Japan
and Europe. A garment from anywhere can end up in any country, and
labelling tends to be applied at the source when the garment is fabricated, so
to have common system of labelling, a common language and a common
understanding of what these labels mean is essential.”

To this end, Timberland has been working collaboratively with its peers in the
outdoor industry in a bid to broaden the scope of the Green Index. “One of the
things that I think we can really be proud of and it‟s still a work in progress is
our work with the Outdoor Industry Association and their eco labelling working
group which we helped to co-found,” said Beth Holzman. “The goal there was
really to create a standardised label for products in the outdoor industry that is
based on the same standards and methodology, so that there can be a
consistent label applied to our products as well as others. So we‟re now in the
process of working with the group, which is over 60 brands, to actually create a
comparable and multi-stakeholder-informed label that all brands could adopt in
the future. Our goal is to really take what we have started with the Green Index
and really use that as a tool for empowering consumers.”



Amy Roberts says that at the moment the work in the OIA on eco indexing is
more industry-facing than consumer-facing, but the idea of developing this
work into the creation of an eco label to be used by all OIA members is a
possibility. Its aim now is to give companies “information and an index to work
off of; how they present their progress to the consumer is still up to each
company to decide. The outdoor industry is not necessarily going to have a
label or a certification process.”

She continues: “After we‟re able to complete an industry-facing index, I think
there will be discussion about do we keep it industry-facing or do they want to
make a consumer-facing label, and that would require a separate certification
body and that type of thing. That‟s something I think will be discussed within
the next year or so as we get this first piece of the work done.”

In Europe, there is, of course, the official EU ‘Ecolabel’ programme which was
established in 1992. Products and services meeting the necessary criteria can
carry the Ecolabel flower logo.

The scheme covers a wide range of product groups, including cleaning
products, appliances, paper products and clothing and textiles. In fact, Adil
Elmassi points out that the clothing and textiles sector is the largest user of the
scheme. However, even so Elmassi adds that “the vast majority of our
members tend to use more private or national schemes. There are many
labels in our sector that are competitors. The vast majority are using more
national or private labels than European Ecolabel.”

While some are more forthright about the difficulties created by this
fragmented picture and the lack of consistency and uniformity in eco labelling,
Elmassi believes companies are justified in choosing the scheme which is
appropriate for them. He says the most important fact is that some form of eco
labelling is used and that it is consumer-friendly. “The main message we
deliver is that there is need to use these labels but the decision is made by the
company. We do not dictate conduct and we don‟t say you should use this
label rather than the other. They know which one they want to link their image
to, which one costs less, which one suits their marketing best. So there are lots
of considerations.”



Malcolm Ball says the fragmented nature of the landscape to a degree comes
down to the fact that many companies are still at a fairly early stage in this
regard, “and people are still working out what works and what doesn‟t”.

However, he adds that the sooner something more uniform can be developed
in terms of messaging to consumers, the better. “We want to work together
with the other key trade associations to get our message right,” Ball says, to
eliminate the confusion created by “this cacophony of different messages”.


Industry action

Industry action

Environmental concern has become increasingly important for clothing and
textiles producers and retailers. However, just as we have seen in regard to
social issues, some companies have moved faster than others.

Given the changing views of consumers, what the leading companies in this
field have in common is the recognition that a strong green agenda can be an
important differentiator in the marketplace.

Corporate platforms

Companies such as Nike and Timberland in the US, C&A in the Netherlands,
M&S in the UK, and H&M in Sweden have all been acknowledged for the
environmental platforms they have established. Meanwhile, specialist clothing
manufacturers such as Patagonia, which have made environmental-
consciousness their prime selling point, have also played an important role in
greening the clothing sector.

In addition to the clear consumer demand, Barry identifies three other key
drivers behind M&S’s ‘Plan A’ sustainability platform: business efficiency,
employee motivation and the need to innovate and cater for new markets. All
these elements serve to underline the clear business case which now exists
for having a strong environmental agenda.

Malcolm Ball of ASBCI believes what we are seeing in the environmental area
is a convergence of two beneficial factors. A strong environmental programme
is good from a marketing point of view and “there is a gain to be made against
the bottom line”.

Beth Holzman of Timberland supports the business efficiency argument. “You
look at the energy that we‟re saving in our buildings that will help us get to our
carbon neutral goals but, at the same time that is really helping us reduce our
total costs as a business.”


Industry action

Collective action, information sharing and competitive issues

There seems little doubt that major companies can turn environmental
challenges into commercial opportunity. However, notwithstanding progress
across the board and particularly the attention start-ups often give to
sustainability, going ‘beyond compliance’ is more difficult for SMEs, which
have nowhere near the resources of the large companies to fund product and
technological development, and may not stand to gain the same marketing
benefit.

In this context, the work of trade associations and industry networks to assist
in information sharing and the spreading of best practice is clearly critical.
However, given that an environmental platform can potentially be a
differentiator in the marketplace and that the technological innovation required
to produce products more sustainably can entail substantial investment, the
principle of information sharing is a delicate one.

However, Amy Roberts of the Outdoor Industry Association (OIA), which has a
large eco working group, says that with regard to sustainability there is a
strong commitment to a broader environmental objective. “I think there‟s a
bigger environmental ethic within the outdoor industry to maybe put those
competitive edges aside to some degree and bring best practices together,”
she says.

Roberts points out that some of the larger companies may have ten, 20 or
even 50 people working on different environmental efforts, while a smaller
company or start-up may just have one. “One person obviously is not going to
make the same advances on their own. And so it [the eco working group]
enables the smaller companies to come in and adopt some of the best
practices, even at a baseline level, that maybe they wouldn‟t know about or
wouldn‟t have the resources to try to come up with on their own.”

Part of the reason why there is this particular commitment to a collective
approach, Roberts says, comes down to the particular connection that OIA
companies have with the natural world. As the companies are making shoes
and clothes to allow people to recreate in nature, the “natural desire to protect
the natural world is instilled already in a lot of people that already work in the
outdoor industry”.


Industry action

Fortunately, the spirit of cooperation does not appear to be restricted to
outdoor specialists. Steve Lamar says the environmental projects at the
American Apparel and Footwear Association (AAFA) are there “to help
everybody”, enabling “companies that haven‟t taken as many steps on this
path to learn from what others have done”. And there is also information-
sharing among the leaders: “The ones that are most advanced, they learn from
each other.”

While M&S’s Mike Barry concedes that there is inevitably a competitive
element too, this actually underlines that talk of a tangible business benefit is
not just PR. “There‟ll always be a little bit of it now that is competitive,” he says.
“I think real step-change innovation comes from businesses trying to compete
to get market advantage. Those that succeed are the ones that can walk that
fine line, collaborate and compete at the same time.”

The environmental working groups established by trade associations underline
the importance this area is assuming within the overall work and remit of
industry groups. Steve Lamar says the amount of time the AAFA devotes to
environmental matters is increasing every year. But it is not just cooperation
within the membership of trade associations that is furthering the
environmental agenda. Information sharing between industry groups on
environmental matters is also proving valuable. For example, the OIA has
been briefing the Environment Committee of the AAFA on its eco labelling
work.

Malcolm Ball believes the integrated nature of the supply chain means there is
a great need for cooperation between different forums. He describes ASBCI as
the type of “networking forum” which can foster just such cooperation. “Our
organisation has traditionally been drawn from middle management, technical
people, lab people, buyers, merchandisers. Our membership needs to know
what the common goals and common issues are. But our membership doesn‟t
have senior board members. They meet in other forums. If all these forums
communicate then we get an in-depth relationship through our organisation
and there‟s a common approach or a common knowledge.”

The RITE Group, meanwhile, is an information-sharing network set up in the
UK specifically to work in the environmental field. Formed in 2007 by two
academics from the University of Leeds, it aims “to provide advice and fact-
based information to minimise the negative environmental impact of the


Industry action

production, use and disposal of textiles and apparel”. Its stated aim is “to drive
forward the sustainable production of textiles and clothing throughout the
global supply chain through a number of new initiatives and expert working
groups”. The working groups develop best practice for sub-sections of the
textile industry and coordinate conferences, seminars, publications and
interactions with other like-minded groups.

The RITE Group has a bold agenda, covering most of the challenges
highlighted in this report. In addition to providing a forum for inter-disciplinary
discussions on sustainability/green debates, it aims to promote best practice in
reducing the impact of textiles on the environment; to develop methods of
objectively assessing the ‘greenness’ of textile production, processes and
products, eventually through a scoring/grading system based on a full life cycle
analysis; to develop clear, industry accepted, definitions of commonly used
green/sustainability terms; to develop clear ways of objectively communicating
‘greenness’ information to consumers; to promote and encourage the use of
scientific facts in all sustainability/green debates; and educate brands,
retailers, manufacturers consumers, media and pressure groups to understand
what is fact and what is hype.

Meanwhile, Jef Wintermans of Dutch trade association Modint says he was
buoyed by the positive view taken towards environmental challenges by
representatives from a wide variety of countries at the IAF’s Global
Responsibility Committee meeting in Cologne in April this year. He views IAF
as a “meeting place” where representatives from different countries can share
insights and work together on common problems.

Engagement with NGOs and multi-stakeholder options

Engaging with the campaign community and NGOs is also seen as important.
“One of the things we try to do is reach outside the industry and find what
lessons that we can find there,” says Steve Lamar. He says one of the themes
companies he is speaking with are stressing is the importance working with all
stakeholders, including environmental groups.

Beth Holzman says multi-stakeholder engagement is fundamental to
Timberland’s approach to environmental issues. “Our commitment to working
with multi-stakeholder organisations and institutions is I hope very apparent.
It‟s really embedded in our transparency and accountability philosophy, and


Industry action

our philosophy around stakeholder engagement is that we want to be as open
and communicative with stakeholders, so we can improve our programmes
and the impacts that come out of those programmes.”

Holzman says Timberland believes in “collaborative opportunities that can help
scale our impacts” and also aims to be “as inclusive as possible to get all
different sides of the equation that we should be considering when designing
and implementing those programmes”.

Consulting all stakeholders, including representatives of government and
NGOs, is a key element in the development of the OIA’s eco index, says Amy
Roberts. Once a provisional index has been developed, she says the OIA will
“need to go out and get stakeholders to come in and look at it and criticise it
and make suggestions so that it will be credible. And that would include NGOs
but also currently within the eco working group we do have a participant from
the US Environmental Protection Agency so we have a Government
participant already.”

She also points out that the OIA’s eco working group has open meetings about
four times a year, and the organisation is keen to invite NGOs in to make
presentations to these meetings. “I can see a scenario where we would have
them come in, do a presentation to our group, share the information that they
feel can help these companies make better-informed decisions. I think they‟ll
find our industry very open to getting knowledgeable input from lots of different
sources about the different impacts and different manufacturing environments
in different countries.”

However, while clothing companies have joined in multi-stakeholder
partnerships, such as the Ethical Trading Initiative and the Fair Labor
Organization (FLA) in the US, to address the issue of working conditions in the
supply chain, there has to date been less in the way of formalised multi-
stakeholder collaboration on environmental issues.

The most notable example of such cooperation in the clothing and textiles field
is the Better Cotton Initiative (BCI). BCI describes itself as “a collaborative
global process, involving a wide range of stakeholders from farmers and their
representatives along the cotton value chain to brands, and retailers”. Its long-
term aims are to demonstrate the inherent benefits of better cotton production,
particularly the financial profitability for farmers; to reduce the impact of water


Industry action

and pesticide use on human and environmental health; to improve soil health
and biodiversity; to promote Decent Work for farming communities and cotton
farm workers; to facilitate global knowledge exchange on more sustainable
cotton production; and to increase the traceability along the cotton supply
chain.

In keeping with the multi-stakeholder ideal, the BCI is governed by a Steering
Committee which includes companies, producer organisations, NGOs, trade
and industry organisations and civil society institutions, as well as international
organisations. Current members are Adidas, Gap Inc, H&M, the International
Federation of Agricultural Producers (IFAP), International Finance Corporation
(IFC), Ikea, Organic Exchange, Oxfam, Pesticide Action Network UK and
WWF.

The organisation also draws its funding from a broad range of stakeholders,
and says it strives for a well-balanced financial support to avoid financial
dominance of one specific stakeholder group. It is currently funded by the
Swedish International Development Agency (SIDA), the State Secretariat for
Economic Affairs (SECO) of the Swiss Confederation, as well as members of
the Steering Committee and Better Cotton Partners, which are described as
“stakeholders that consistently participate in the development of Better Cotton
over time, playing an active role in BCI on a cross-section of issues, and
contributing financial or in-kind support to BCI”. Current Better Cotton Partners
include Cotton made in Africa, ECOM Agroindustrial Corp., International
Labour Rights Forum, Hemtex, Levi Strauss, Marks & Spencer and Nike.

There appears to be consensus among both NGOs and companies that multi-
stakeholder collaboration can be extremely effective. The success of BCI and
of multi-stakeholder initiatives dealing with social issues appears to bear this
out. But in spite of the success of the Ethical Trading Initiative (ETI) and others
in dealing with social issues, many have reservations about whether the
clothing industry could establish some form of counterpart dealing with
environmental matters because the area is too broad to be approached in the
same way.

With an overall umbrella approach, Steve Lamar says, it would be “really hard
to create something that was meaningful because the issue is so enormously
huge”. Most feel that multi-stakeholder collaboration in the environmental


Industry action

space may be more effective if focused on specific issues, such as the Better
Cotton Initiative.

Mike Barry adds: “I think the ETI has been very successful on the social side.
Do we need something similar on the environment side? There is clearly going
to have to be more collaboration there. Clearly over the next five years there
have to be more collaborative mechanisms about environmental protection in
clothing. I think generally you‟ll see things progressing on two routes. One is
the multi-stakeholder group that looks at all issues generally, so looks at
sustainable clothes in its entirety. And you‟ll get sector-specific or issue-
specific groups working on cotton, on polyester, on wood, dye-houses that can
focus on practical solutions for that area.”

Ingrid Schullström believes there could be scope for existing multi-stakeholder
initiatives which deal with supply chain issues to expand their remit to look at
environmental factors specifically related to the supply chain. However, she
shares Lamar’s reservations about a multi-stakeholder collaboration that could
take on the entire environmental mantle.

“If you mean everything that is concerning us, that we could join in a multi-
stakeholder initiative and deal with every environmental issue that is relevant
for a company, I would doubt that it would be very efficient,” Schullström says.
“Then I think it would be easier to work with climate separately and maybe
water separately.”

David Santillo of Greenpeace also feels there is merit in focusing multi-
stakeholder collaboration on specific issues. “There is an element these days
of proliferation of multi-stakeholder consultations on various things which can
sometimes have difficulty getting away from the superficial,” he says. “They
focus on coming out with common statements which are very watered down by
the time they come out, or they start on processes that don‟t really seem to
have a specific end. Where there is perhaps a much greater need to put some
effort in is on much more direct, much more case-specific working with
stakeholders, maybe an individual stakeholder, an individual NGO, or a small
group of NGOs that are actually focused on finding solutions to a particular
case.”

Nothing may seem more likely to compromise multi-stakeholder dialogue, or
be more disconcerting for companies striving to improve their environmental


Industry action

profile, than a report from a campaign group revealing or alleging
environmental abuse or failings in monitoring. The recent Greenpeace report,
Slaughtering the Amazon, which alleges that companies, including Nike and
Timberland, have been sourcing leather from farms linked with Amazon
deforestation is a highly topical case to point. The problems of traceability of
the suspect leather demonstrate all too well how convoluted supply chains
exacerbate the challenges facing the textiles, clothing and footwear sectors.

Such incidences may highlight the tensions that exist between the corporate
sector and NGOs, but they also serve to underline how important cooperation
between the two is. Indeed, what the Greenpeace revelations show is that the
campaign community, even if it often takes a sceptical view of industry, can be
an important source of information. Dialogue with NGOs is not just about
hearing the other side of the argument. It can provide invaluable intelligence.

While Santillo says that Greenpeace does not have “any permanent
adversaries and nor do we have any permanent allies”, he adds that “where
we can help people by providing information, getting them in touch with other
companies in that field that maybe have got new approaches and new
technologies, we‟re all for it”. A number of companies implicated in the
Slaughtering the Amazon report, including Nike, Adidas and Timberland, all
expressed a desire to meet with Greenpeace to discuss the report’s findings.

Sarah Shoraka of Greenpeace UK, who worked on the report, says “the olive
branch is there”. She adds: “I think the way we‟ve tried to approach this is by
telling these companies that they‟ve got these problems and we want to work
with them to sort it out. I don‟t think we‟ve taken an aggressive stance and said
that they‟re irredeemable. And in a way the fact that they‟ve got these CSR
policies in place and they‟re trying to make progress in other areas means that
I think they will want to work with us.” So in fact, rather than driving a rift
between companies and campaigners, there is a sense that even this
potentially damaging and embarrassing report could be a catalyst for further
stakeholder collaboration.


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