Ethical fashion: fast fashion cure or quixotic fancy?

Five years ago, the Rana Plaza tragedy shocked the world. The collapse of the garment factory, killing 1,138 workers, flung back the curtains to expose the devastating consequences of wilfully-lax supply-chain oversight. Fast fashion has since been widely criticised for ingraining unsustainable consumption habits in consumers which harm the environment and human rights. However, its opponent, ethical fashion, has arguably commanded less attention. Here we explore if ethical fashion stacks up in the ring against fast fashion giants.

Is it a financially viable ‘cure’ and is there a trustworthy ‘ethical’ standard that consumers can arm themselves with against fast fashion? Or will ethical fashion lose the battle?

Is ethical fashion commercially viable enough to bring down the fast fashion titans?

The notion that sustainable fashion could not only be profitable but also competitive enough to challenge mainstream fast fashion giants seems almost paradoxical, considering that it seeks to pay workers well above sweatshop wages. The fact that fast fashion industry revenue has grown at an annualised rate of 21.5% over the past five years whilst the UK ethical clothing market experienced negative growth of around  12% over 2014 and 2015, seems to confirm ethical business models are too expensive to be profitable.[1]

Consumer behaviour research suggests a similarly bleak outlook. A study from retail research agency, Verdict, found 20.2% of consumers would be unwilling to pay more for sustainable clothing.[2] Although a 2016 Oxfam Australia showed that 21% of 1,000 survey participants were willing to pay more than $10 to ensure the safety of workers making their clothes, a majority of 48%  would only pay an extra $2 to $5.[3]

Despite bias and sample size concerns, this research largely suggests that consumers don’t value sustainability and ethical practices enough to justify paying the higher prices. But if society can intertwine ethical considerations with consumption habits, then the ethical garment industry might stand a chance against fast fashion.

Slow fashion is one such resurging concept which visualises a clothing market that incurs less social and environmental costs. Much has been said of fast fashion’s hand in cultivating a trend-chasing culture of ‘buy and dispose’ in devastatingly high quantities. Slow fashion champions instead demand driven by quality in low quantities.

The circular economy model offers another potential solution which not only calls consumers to act, but also requires the supply side to redesign their business models. It follows a circular system of: lease/ purchase, use and return, upcycle/mend, recycle, then rinse and repeat. It pioneers a structural change to the current buy-and-dispose model, which facilitates more ethical consumption. This cycle doesn’t just incentivise companies to create high-quality and durable products, but even necessitates it if firms are to compete in the circular economy.

One notable circular model success is Rent the Runway. Touted as the ‘Netflix for dresses’, they announced profitability for the first time in 2016 with revenues of $100 million.[4] It follows a model of subscriptions (unlimited rentals per month or four rentals per month) or a pay-as-you-go service. Rent the Runway’s customer has a median age of 30 and 90% are working professionals, suggesting that they are currently not going head to head with fast-fashion firms who target the 16-24 age bracket.[5] The company is however trialling lower cost subscriptions and more casual-wear to edge into the fast-fashion demographic. Although rewiring ingrained “throw-away” consumption practices is challenging, the success of such companies suggests a paradigm shift is underway.

For the moment, a key obstacle for new companies adopting this model are, of course, hefty start-up costs. Viggo, a Danish baby clothing rental service, has predicted profits for 2018 onwards, but 2016 was their third year combatting development and start-up costs.[6] As brands under the clothing rental model eventually recoup start-up costs and grow larger user bases, thereby spreading a culture of reusability, they may pose a more credible threat to fast fashion.

Changing cultural norms in consumer behaviour and redesigning markets to accommodate more ethical decisions is all good and well. However, without transparency around different companies’ ethical practices, making better decisions will remain a challenge for customers.

Are current standards enough?

Beloved Melbourne-based label Gorman has long been perceived as ethical, and if not ethical, quirky enough to imbue the oft associated social awareness (the brand supported the ‘Yes Vote’ and boasts an organic cotton line). Nevertheless, in 2016 it landed on Oxfam’s annual ‘naughty list’ for failing to disclose its factory locations.[7] Therein lies a central issue, can consumers trust something to be ‘ethical’ if there is no universal standard? By extension, can consumers be blamed for making unethical purchases when they’re not given adequate information to navigate towards more socially conscientious products?

Certain verified marks exist which reduce information asymmetry and help consumers make more ethically-minded choices. Most notable is the Fairtrade mark, adorning garments made of cotton for which the producers have been paid a fair price. A multitude of these symbols exist and they can partially bridge the information gap to help consumers make more ethical choices, but arguably need to be supported by a robust legal framework.

California introduced legislation, the Transparency in Supply Chain Act, that required companies doing business within the state to disclose what action has been taken to ensure their supply chains are slavery and human trafficking free. However, the legislation has been criticised as being riddled with flaws – non-compliance incurs no penalties and the legislation does not consider how up to date, or out of date as it may be, the information disclosed is.[8] In Australia, there is no similar legal framework at all that facilitates this kind of accountability or oversight.

Without a robust legal framework and trustworthy standards for ethical practice, the onus is largely on consumers to do the research so as not to fall prey to firms engaging in unethical activity.

Where to from here for ethical fashion?

Since the Rana Plaza tragedy, Baptist World Aid Australia has released an annual ‘Ethical Fashion Guide’. The 2018 report grades companies on their systems in reducing the risk of forced labour, child labour and supply chains exploitation.[9] The 2013 report graded 128 brands, that figure has since risen to 407. Though progress is undeniable, it would arguably be a stretch to declare leaps and bounds have been made from that which enabled the Rana Plaza tragedy (and many others).

Today, countless smaller competitors are stepping up to bat. Despite this, the changes fast-fashion has wreaked on the garment industry and attitudes towards consumption of fashion are vast, and appear to be better addressed by vast, systemic changes as well. Perhaps consumption attitudes and decision-making needs to change first to allow these competitors, these ‘disrupters’, and new business models to truly effect broader change and stem the tide of fast-fashion.

[1] Ethical Consumer. (2016). Markets Report 2016. Retrieved from http://www.ethicalconsumer.org/portals/0/downloads/ethical%20consumer%20markets%20report%202016.pdf

[2] Gilliland, N. (2017, Mar 23). How ethical fashion brands are marketing to conscious consumers. Retrieved from https://econsultancy.com/blog/68924-how-ethical-fashion-brands-are-marketing-to-conscious-consumers/

[3] Oxfam Australia. (2016, 20 Apr). 89% of Australians would pay more for clothes to ensure safety of overseas garment workers. Retrieved from https://www.oxfam.org.au/media/2016/04/89-of-australians-would-pay-more-for-clothes-to-ensure-safety-of-overseas-garment-workers/

[4] Carson, B. (2016, Dec 28). Rent The Runway, the ‘Netflix for dresses,’ just raised another $60 million and claimed profitability for the first time. Retrieved from https://www.businessinsider.com.au/rent-the-runway-profitable-raises-60-million-fidelity-2016-12?r=US&IR=T

[5] O’Connor, C. (2016, Nov 16). Rent The Runway To Open Neiman Marcus Stores-Within-Stores As Startup Surpasses $100M Annual Sal. Retrieved from  https://www.forbes.com/sites/clareoconnor/2016/11/16/rent-the-runway-to-open-neiman-marcus-stores-within-stores-as-startup-surpasses-100m-annual-sales/

[6] Deloitte. (2016). Vigga Annual report 2016. Retrieved from https://datacvr.virk.dk/data/offentliggorelse?dl_ref=ZG9rdW1lbnRsYWdlcjovLzAzLzdlLzQwL2RlLzNkL2Y4MTQtNGEzZi1hOGU3LTZiMjAzYjk4MDE4Y

[7] Oxfam Australia. (2016). Naughty Nice List. Retrieved from https://www.oxfam.org.au/wp-content/uploads/2016/11/naughty-or-nice-list-2016.jpg

[8]Cusumano, E. (2017, Jul 25). Is The California Transparency in Supply Chains Act Doing More Harm Than Good?. Retrieved from http://legaldesign.org/calblog/2017/7/25/is-the-california-transparency-in-supply-chains-act-doing-more-harm-than-good

[9] Baptist World Aid Australia. (2018). 2018 Ethical Fashion Report. Retrieved from https://baptistworldaid.org.au/resources/2018-ethical-fashion-guide/

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