The Elephant in the Boardroom
In 2017 The World Resources Institute (WRI) published a working paper entitled “The Elephant in the Boardroom: Why Unchecked Consumption Is Not an Option in Tomorrow’s Markets.” This report, written explicitly for the C-suite and the boards of global businesses, plainly states that while incredible advancements have been made in pivoting traditional business models to adapt to sustainability targets, there is a major element that is not being addressed: “the uncomfortable topic of our business dependency on consumption.” Current business models are centered on growth; and yet, the available resources of this planet are already being exceeded to meet today’s consumption needs. The WRI report was not specific to fashion (although fast fashion was used as the case study for “fast-moving consumer goods”), but rather analyzed the status quo business model in general that predicates increased consumption as the only route to economic prosperity. But the report may as well have been written directly to the global fashion industry; this is an industry that is expected to continue to grow by nearly 5% per year for the forecastable future (for context – the global population is growing at a rate of just under 1% per year, while global GDP is growing by 3% per year).
The WRI report identifies the growing middle class in countries such as India and China as a key contributor to consumer growth – increased expendable income goes hand-in-hand with increased consumption, but also, this is a demographic being targeted as an emerging market. And indeed, the 2022 edition of the State of Fashion Report, an influential industry summary compiled by the Business of Fashion and consulting group McKinsey & Company, found that following the economic slump of the pandemic years, a near total recovery was observed in Chinese markets (in line with its growing middle class population).
One of the few fashion executives willing to name the issue of overconsumption, Paul Dillinger, Head of Global Product Innovation at Levi’s, has openly stated that the fashion industry is “propped up on unnecessary consumption” (see: The Day the World Stops Shopping by J.B. MacKinnon, 2021). But his is often a lone voice in an industry overrun by drops and limited-edition runs, incessant advertising and influencing, sales, perks and promotions – all designed to keep product moving, to keep meeting targets, to generate profit, to increase growth. To address overconsumption would mean not only acknowledging the very real ceiling of ecological limits, but also admitting that the current model no longer works.
The WRI report does not mince words about what needs to be done: “To ensure that the global community’s social and environmental goals are met will require a full delinking of business growth from negative environmental and social impacts.” By their assessment, “business innovation would need to be ‘radical,’ not ‘incremental’” because “incremental shifts will not be enough …” Understanding that due to the ultimate finitude of ecological limits change will be inevitable, the authors of the report suggest that those businesses that begin to innovate now will be the leaders of tomorrow, the ones who not only survive but thrive, whereas those who remain firmly entrenched in the status quo will be “outcompeted by disruptive new entrants that are more innovative and transformational.”
But what does it mean to be truly radical in this environment? If there is one thing the fashion system tends to get right, it is adaptability, an openness to change. It was innovation in the textiles industry that triggered the Industrial Revolution, and the fashion industry was one of the first to adopt what fashion scholar Kate Fletcher has called the “international division of labour” – moving various levels of production and manufacturing to the cheapest bidder around the globe (see: Sustainable Fashion and Textiles: Design Journeys by Kate Fletcher, 2014). From innovations in technology (sewing machines, mass manufacturing) to shifts in design (pants for women in the 20th century, athleisure during the pandemic), the industry has proven itself to be remarkably responsive to the shifting needs and desires of fashion users. It is an industry that has change and adaptability built into its DNA; without change, there is no fashion. And today this is no different; increasingly recycling, resale, and circular economy solutions are being adopted. And yet, not only do these solutions not truly target overconsumption – they don’t eliminate the initial resource use required to create or repurpose items, and can, in fact, promote increased consumption due to the perception that recycling negates impact – but they create no meaningful break with the status quo system.
A “radical” idea is one that promotes “extreme social or political change.” To be truly radical, therefore, would mean building a new system, rather than finding means by which to make the current system less bad. The WRI report suggests that addressing overconsumption is “uncomfortable and unmentioned, both because the model has worked so well financially in the past and because addressing it challenges the traditional business model.” And in truth, it has worked well – the global apparel industry is worth up to $3 trillion, which amounts to about 3% of the global GDP (and is equivalent to the GDP worth of the oil industry). But if the fashion industry has long prided itself as being at the forefront of innovation, is the industry as a whole willing to lead the way in exploring new business models that actively do good by people and the planet?