I’ve always struggled to get my head around economics and finance. But, when I was completing FutureLearn’s Fashion and Sustainability course, I was able to hear from industry experts about economic sustainability. Connecting economics to a topic I’m so involved in made it easier to understand.
Currently, economics isn’t focusing on sustainability. Businesses focus on financial growth each year, which is vital for businesses to survive. The luxury fashion industry thrives when it comes to financial growth, of course. But, it severely lacks in aspects like planetary boundaries and human equality. Dr Simon Mair spoke about something that Kering CEO, François-Henri Pinault said:
“When a young brand joins Kering, it gains access to a worldwide real estate team:
We have people who know the stand-alone store locations as well as the malls of
every big city in the world. We have relationships with landlords. We know the fair
price for rent. If you’re a small brand in London, opening a store in Berlin or Hong
Kong can be daunting. Once your brand is part of Kering, our experts will help you get
In other words, he is saying that ‘being bigger means you have more control over you environment.’ This is advantageous as the market is extremely competitive. But, the need to continuously grow and expand comes at the detriment of the environment. We used to see brands make 2 collections per year, but due to the rapid expansion of consumerism, this has risen to 6+ collections per year.
Businesses are affected by macroeconomic variables. This means large-scale/general economic factors such as interest rates and taxes. There are also microeconomic variables which is connected to the individual. For example, when it comes to fashion collections, a brand can’t predict consumer emotion or response. Mair connected this to productivity gains, explaining that brands ultimately want to sell the same amount of product but produce it cheaply. This creates an unsustainable supply chain in which profit is prioritised over people or nature. In the fashion industry, productivity gains may mean using machines to produce clothes rather than people. It may also involve breaking down a production process so that skill is not needed. The process no longer involves highly skilled workers or creativity and the skill that was once passed down through generations is lost.
Mair proposes that economy needs to be re-imagined so that people and nature are dominant. The value of people and sustainability needs to be incorporated into the economy and thought about in financial terms. Economics and ecology are intertwined, and there are many issues that stem from it. These issues include: diminishing resources, land use, biodiversity loss, climate change, slavery, consumption, and waste.
One way the industry could shift its economics is by turning to a circular economy – this is already happening within some businesses. I wrote a post about circular economy and why brands are promoting it.
For the individual, shopping vintage is a great way to support circular economics. Taking small steps such as only buying when you need something, shopping second-hand, or up cycling what you already have in your wardrobe, is a great way to start your own personal sustainable journey.
With the demand for sustainable fashion increasing, businesses are being forced to look at sustainability in their economic agendas. Forbes’ economic sustainability article gives an insight how sustainability is and economic benefit.
It is predicted that the next decade will be the sustainability decade, particularly for the luxury fashion industry. With nearly 70% of consumers willing to pay premium for sustainable products, it looks as though we are headed for a sustainable fashion economy.