London Fashion Week may have showcased the fabulous side of the industry, but there’s a dark impact behind the clothes that needs to be addressed.
The ugly face of fashion
The glamour and glitz of London Fashion week has come to an end and, as usual, supermodels showcased tomorrow’s trends as designers unveiled their Spring/Summer 2020 collections.
The fashion world has to, by its very nature, look ahead; but with growing pressure from climate change activists, the industry is being forced to reflect upon a footprint far more costly than that of a red-soled Louboutin.
When asked which industries have the most harm on the environment many of us would think of transport, mining and manufacturing, but would fashion spring to mind? It may come as a surprise then that the UN Conference on Trade and Development considers the fashion industry to be the second most polluting industry in the world, consuming more energy than the shipping and airline industries combined, as well as being responsible for about 10% of greenhouse gas emissions.
It’s facts like these that prompted Extinction Rebellion (XR) to put on their own far more solemn closing show earlier this week outside London Fashion week’s central venue. Beginning at Trafalgar Square, the group, whom in April blockaded Oxford Circus for five days with their now iconic pink boat, marched a funeral procession along the Strand in protest to fashion week’s encouragement of ‘fast fashion’.
‘Fast fashion’ is a term used to describe inexpensive clothing produced rapidly by mass-market retailers in response to the latest trends. In an age where many won’t post an Instagram picture wearing the same outfit twice, there is huge demand for quick, cheap clothing. This change in consumer habits has seen the global consumption of clothes double between 2000 and 2014.
One cannot dispute the major role the multi-billion dollar fashion industry plays in the global economy, creating millions of jobs around the world, however its effect on the environment can no longer be ignored.
Only last month at the G7 summit, French President Emmanuel Macron announced his plan to advance sustainability in the fashion industry, enlisting the help of Kering CEO Francois-Henri Pinault. Pinault, responsible for luxury brands such as Gucci and Yves Saint Laurent, has been appointed to unite brands from around the world to reach their sustainability targets.
Taking steps towards sustainability
It’s promising that many fashion brands had already recognised the need for change prior to XR’s protest. On the final day of fashion week the UKs biggest luxury fashion brand Burberry staged its collection. Burberry (named leading luxury brand in the 2018 Dow Jones Sustainability Index) have, amongst other initiatives, also pledged to stop destroying unsold clothes in a bid to preserve the company’s exclusivity. Earlier this year Prada launched their Re-Nylon collection of six bags crafted from reclaimed plastics, textile fibre waste and fishing nets, highlighting their efforts towards promoting a responsible business.
And it’s not just luxury brands recognising the need for change. Zara, the biggest brand of the third largest apparel company in the world Inditex, have pledged to use 100% sustainable fabrics by 2025. Zara have also partnered with the Red Cross to donate leftover stock.
No plans to change
However there can be no denying that ‘fast fashion’ can be a profitable business regardless of its environmental impact. In a paper published by the Environmental Audit Committee (EAC) in February 2019, Boohoo was named as one of the least sustainable fashion brands in the UK. The company have not signed up to the targets set by the Sustainable Clothing Action Plan to reduce their carbon, water and waste footprint, nor have they signed up to an agreement working towards a living wage for all garment workers. Despite this they continue to go from strength to strength reporting revenue increases of 48% to £857m in the year to February 2019 and now command a greater market value than their AIM listed rivals ASOS. Boohoo remains one of only two retailers we’re positive on and this outlook remains unchanged over the medium term.
With concerns about the environment increasingly in vogue, brands will be expected to publicly account for their actions. But until consumer habits change it seems shareholders of ‘fast fashion’ companies, such as Boohoo, don’t have anything to cry about.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.