Thanks to Rajinder Bhandal for sending me this super interesting blog!

A key highlight of my teaching last term, as Module Leader has to be on the LUBS2970 Corporate Social Responsibility module, at Leeds University Business School. I have been discussing the role of fast fashion with my second-year undergraduate students on this module for the past 3 years. Each year the workshop activity involves discussing the Ethical Apparel Index (NC State University) which involves watching the video accompanied with a discussion.

Last term, the year was particularly memorable thanks to my wonderful teaching colleague (soon to be Dr) Veronica Gonzalez-Navarro, who introduced me to this eye-opening article published in the National Geographic: “​Fast fashion goes to die in the world’s largest fog desert. The scale is breathtaking” during the workshop which led to future fruitful discussion and discourse amongst students.

I was keen to learn more on the impact of fast fashion from Veronica in the form of the following questions:

1. What type of action is needed to raise more awareness of this issue in Chile and the world over? What is the role of the consumers in all of this? The Ethical Apparel Index is combining CSR with technology – what are your thoughts on this initiative? 

I think that raising consumer awareness about fast fashion’s environmental and social impacts is key to moving towards a more sustainable industry. In basic economic terms: If demand for unsustainable fast fashion items is reduced, there are fewer incentives for producers to produce, and then supply for these items should contract. To bring about this change and turn towards products whose production and consumption methods are sustainable, it is key to raise consumer awareness regarding the impacts of the items they want to buy. In this way, they are more likely to make more informed decisions and even decide to refrain from buying certain clothing items whose supply chain causes social impacts such as forced and child labour or huge piles of waste that end up coexisting with communities that have little or no relationship with the generation of waste, as is the case in northern Chile.

In my opinion, education regarding sustainable purchasing behaviours is key to increasing consumer awareness. Some actions could be:

1. Increase the amount of information available on the impacts generated by the production of a clothing item. For instance, if a consumer in Europe does not know or does not see that fast fashion items are likely to end their life cycle in countries of the global South that already deal with many social and environmental challenges, it is unlikely that they will take this information into account in their decision-making process. The dissemination of information by NGOs, governments and companies is key to raising awareness of the many negative impacts that could arise through unsustainable production and consumption practices.

• Teaching to apply critical thinking when purchasing an item. This could be done at home, in schools and through different community organisations. Critical thinking would imply not only taking into consideration the price of an item but rather inviting reflection on why an item has a low price or two items that are similar in terms of appearance and function have different prices. Some questions that could support this process are: does the sale price of this item consider the real cost of producing it? Were the environmental and social impacts generated in its production incorporated into the price? If this item is so cheap, who is assuming the cost of this? Was the item I am buying ethically produced?

• Signalling mechanisms for consumers: Incorporate a symbol, sign or code into the items for sale that allows the consumer at the time of purchasing to recognise the environmental and social impacts of a produced item or which items have been produced ethically. In this sense, tools such as the Ethical Apparel Index, which condenses the available information regarding the impacts of the industry, are key in providing consumers/clients relevant information at the time of purchasing with almost no cost to the consumer.

•   What is wrong with the supply chain in this context? Who takes responsibility for the supply chain?

More than what is wrong, I think that because supply chains are now global, it is harder to identify and manage the many negative impacts generated in the fast fashion supply chain (or any product supply chain). In this sense, in my view, some key elements need to be considered when analysing the main issues: the complexity of supply chains, lower prices, and the market incentives that reduce the implementation of CSR practices.

• Nowadays supply chains are too complex. They usually extend across different countries with different institutional contexts: regulatory frameworks, and cultural and normative elements. To have more sustainable supply chains, there is a need to acknowledge global responsibility for any impact produced across the supply chain. This implies a collective effort to mitigate or reduce the socioeconomic and environmental impacts produced at the different stages of the supply chain. In other words, coordination and cooperation in the implementation, monitoring and enforcement of any public or private policy/measure/initiative that aims to tackle the identified impacts. However, in practice responsibility for action usually relies on single countries or even single organisations. This limits the ability to produce the much-needed systemic change in the way how we produce, use, consume and dispose of fast fashion or any other good.

• Globalisation has made it easier for transactions to occur between countries and with this, textile industries can sell their products at lower prices. This is driven by advances in technology, more efficient production methods, reduction in shipping costs due to more and better transport infrastructure, increased storage logistic capacity and multiple agreements on export and import tariffs between countries. As an outcome of this, production costs are being reduced and the time frame for goods delivery is being cut to a minimum. Both help to reduce the price of clothes and fuel the fast fashion industry.

• Market incentives are (as they usually are) in cost reduction/cost-efficiency. Thus, in the run for cost reduction, the ability and willingness of companies to take care of any negative social or environmental impact is overseen or reduced to a minimum, especially at the lower tiers. In these tiers producers handle commodities (e.g. cotton). Because commodities are homogeneous (cotton is cotton regardless of where is produced) and one does not distinguish easily who produces what (so recognition of good practices is limited), the incentives are in producing at lower costs so manufacturers can purchase their products instead of those from the competition. In this sense, CSR practices in the bottom tiers of the textile industry are seen as an increasing cost that reduces competitive advantage rather than a benefit for society and/or the environment.

All of the above makes it difficult to account for and manage the socioeconomic and environmental impacts produced in the supply chain. In this way, the prices at which items are sold usually do not reflect the cost to society (social cost) of producing them but rather are a reflection of the private costs or the costs that the high street company has to sell them. In this way, sales prices are much lower than they should really be if one considers the real cost of production, that is, if one incorporates into the financial exercise of companies all the externalities generated during the production process. Today, lower selling prices, together with the reduction of waiting time between placing an order for a product and reaching the hands of the final consumer, have encouraged the development of fast fashion and the negative impacts we are experiencing.

• Can the returns policy be more robust and what would you recommend?

One alternative to reducing fast fashion’s environmental and social impact is to reduce the speed of selling by incrementing the time that we spend on deciding on the actual purchase (decision-making process). This could be done through more strict return policies or by making returns more “difficult” to consumers. Today, when buying clothes, people buy online without trying them on and without being convinced that the item they choose is really what they want. These aspects are not analysed in depth when buying clothing items because the costs for consumers to return these items are low: if we don’t like it, we can return the item for free and receive a full refund and we can return everywhere (e.g. store, post office, lockers). Considering the above, an alternative would be to set a maximum number of times that the same consumer can return in a period of time. This would force us to think more when defining what item we need and want to buy. The same if we “penalise” returns by charging an amount per item or by considering partial or no refund. Finally, another alternative is that returns must be made in-store. This could have two effects: it will be more “costly” for the consumer to return the item and when going to the store to make the return, the consumer could be encouraged to try out the item or other items and thus make more conscious purchases.

• What is the role of product life cycle assessment (LCA)?

LCA is a method to systematically assess the environmental impacts of a product considering its whole life cycle. That is, the impacts generated from acquiring raw materials to the end of life of the product.

A set of impacts is considered in LCA. These include climate change, land use, resource depletion, water depletion, and human toxicity, among others.  In my view, it is a powerful tool to identify at which stage each impact is produced so it can be a guide for public and private policymaking, and it is also useful as a tool for consumers to make more informed purchasing decisions. LCA can make consumers aware of the impact that the product itself has on the environment, and it could also assist in analysing which product has less impact when comparing two or more alternatives of the same product. For instance, LCA could show if a white shirt being sold in store A has less/more environmental impact than a white shirt being sold in store B.

This is a good summary of the methodology which has been layout in the ISO14040 guideline: European Commission – Life Cycle Assessment (LCA).

Example of H&M in 2021: H&M is collaborating with Lee to create more sustainable denim

• How do companies implement the law ‘Extended Liability of the Product (Ley REP) and assess its impact?

Textiles are not included yet as part of the Ley REP (they are not priority products). However, there were many talks between authorities to include it.

In terms of the law, I am not too familiar, but I found the information below in the Chilean Environmental Ministry in case you find it useful.

Ley REP (Ley 20.920) / Law 20.920) – Part of the circular economy initiatives of the Chilean environmental ministry: “Producers of priority products are responsible for the organization and financing of the management of waste derived from the marketing of their products in the country” (Source: https://economiacircular.mma.gob.cl/ley-rep/).

How it is implemented (source: https://economiacircular.mma.gob.cl/wp-content/uploads/2020/07/LEY-REP-20920.pdf)

“Environmental ministry (MMA) regulates: establishes collection and valorisation goals in addition to other obligations.

• Producers (PPP): they register with MMA and present management plans to comply with obligations, through a management system which can be individual or collective. It includes:

-Annual estimate of priority products to be marketed in the country.

– Strategy to achieve compliance with obligations.

– Financing mechanism.

– Tendering procedures.

– Monitoring and control mechanisms for contracted services.

– Procedures for collecting and delivering information to the MMA.

– Systems for verifying compliance with the plan.

– Environmental Superintendency supervises

Conclusion

Upon reading the blog, you may be considering the notion of fairness and [in]justice for the people and communities that are caught up on the actions as part of fast fashion business processes. The key question remains – what action will YOU take?