Sustainability: what you need to know (en Inglés) http://www.wgsn.com/reports/boards/view?boardnum=13293...

Sustainability: what you need to know (en Inglés)

by Andrew Jobling, WGSN / 12.17.13

Take bold steps to drive sustainability in your business by taking a closer look at 'natural capital', reducing waste and areas for knowledge
sharing and collaboration.

WGSN ANALYSIS
Natural capital is becoming more of a consideration on the balance
sheet. Not only does it help businesses drive sustainability
improvements by putting them in business language, but it also helps
to clarify how these improvements could have an impact on the
business at a later date.

Waste is a major issue in fashion production but one that can be

overlooked for more dramatic problems such as pollution or labour
issues. But it is also one that can be targeted at the design stage and
thinking about waste at that point in the process can have a big effect
on the sustainability profile of a product.

The call for collaboration is a familiar one but it is also an area where
some solid gains are being made. The collaborative efforts in
Bangladesh are one important area but there are others too, including
the ZDHC group, and the topic is shifting from theoretical benefits to
practical achievements.

Three of the strongest messages to come out of the Textile Exchange Textile Sustainability Conference last month looked at how companies
can integrate better sustainability practices while boosting business too.

1. Value natural capital

NATURAL CAPITAL IS THE NATURAL RESOURCE BASE DRAWN

UPON TO DO BUSINESS AND THE IMPACT A COMPANY HAS ON
THE ENVIRONMENT."
Dorothy Maxwell, TEEB for Business Coalition

From a business perspective, paying attention to natural capital is becoming more important as resources become scarcer, environmental regulations
get tougher and consumers become more concerned.

Dorothy Maxwell is director at The Economics of Ecosystems and Biodiversity for Business Coalition (TEEB). She defines natural capital as both the
natural resource base drawn upon to do business and the impact a company has on the environment. It all has a cost, said Maxwell, and while most
of them are external some are becoming internalized – the escalating cost of raw materials is one example.

And once you start to look more closely and put a value on natural capital, it can start becoming integral to business decisions.

“You can use it to decide ’where will I be getting my fresh water from in five years’,” Maxwell said. “I think supply chain management and decisions on
sourcing will be the biggest applications for this.”

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Puma Cotton growing in a drought

Annabelle Bennett, account director at Trucost, said that valuing natural capital “puts it in a language that business understands”. And that’s
important because the gap between the natural capital cost and the price we pay is shrinking, she said, citing examples such as the imposition of
green taxes and the removal of water subsidies.

With those costs becoming part of the cost of doing business, looking more closely at natural capital (for example not just the price of cotton, but
breaking it down into how much is paid for water use as well) can help show up areas to target. It can also flash warning signs over potential future
volatility.

For Kering, whose Puma unit helped pioneer the corporate Environmental Profit & Loss account, it’s becoming an even more important part of doing
business.

“We’re rolling out EP&L across 18 of our brands,” said Dr Helen Crowley, Kering’s conservation and ecosystem services specialist. “We have refined
the methodology, we’re creating more and more real data rather than modelling, we’ve added another KPI in water pollution – there’s a lot going on.”

Maxwell summed it up when talking about the opportunities to be found when visibility into all areas of the natural capital cost base is increased.

“$18bn is the natural capital cost per year of the apparel industry – that’s mainly in cotton production and particularly in water usage,” she said.
“That’s a risk, and also a big business opportunity.”

2. Target waste

THINK OF THE YEAR 2100. EVERYTHING WILL HAVE TO BE IN

SOME KIND OF CIRCULAR SYSTEM OR WE WILL REALLY BE IN
TROUBLE."
David Meyers, Green Ant Advisors

Waste is the textile sector’s biggest problem with regards to sustainability, said Jörg Diekmann, director of international sales at Hohenstein, adding
that a major reason for that is because of a very low awareness of it in Asia.

But there are areas that can be easily targeted, he said, if the investment is there to do so.

“We have to start in the production processes to get rid of waste we don’t need,” he said. “Using less dye is possible, using less water is possible. All
this needs to be implemented.”

Where the investment comes in is in driving those changes while remaining competitive.

“The problem is our industry gets faster and faster and we need to be more flexible at a time when we are trying to get economies of scale,” said
Diekmann. “We need new technologies that would allow us to be flexible while also remaining financially competitive.”

But for David Meyers, principle at Green Ant Advisors, waste can be seen as a concept that doesn’t exist if businesses embrace a circular economy.
That’s because our current linear economy is where raw materials are transformed into products that are then eventually burned or sent to landfill,
while a circular economy is where everything is re-used.

Than can mean some materials decomposing and returning to the resource pool, but for other materials it means recycling, upcycling and closed loop
production. Meyers says that while the ability to completely operate in this way is tough for most companies, with global raw material consumption
being what it is, it’s certainly worth thinking about from a business perspective.

“Think of the year 2100. Everything will have to be in some kind of circular system or we will really be in trouble. So think of all the change that will

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have to take place between now and then. It’s a massive business opportunity, probably the biggest business opportunity since the industrial
revolution,” he said.

3. Collaborate with others

$18BN IS THE NATURAL CAPITAL COST PER YEAR OF THE

APPAREL INDUSTRY – THAT’S MAINLY IN COTTON PRODUCTION
AND PARTICULARLY IN WATER USAGE. THAT’S A RISK, AND
ALSO A BIG BUSINESS OPPORTUNITY.”
Dorothy Maxwell, TEEB for Business Coalition

Sustainability initiatives can be better implemented by working together rather than in isolation, even if it means what were once closely guarded
production secrets becoming shared best practice.

The Zero Discharge of Hazardous Chemicals (ZDHC) group has the ambitious aim of eliminating hazardous chemicals in its members products and
manufacturing processes by 2020. Imprtantly, the group is backed by heavyweight members such as Nike, adidas, H&M, Esprit, Benetton, Puma,
C&A and Inditex, among others.

ZDHC also wants to develop a transparent process to screen and eliminate hazardous chemicals in the apparel & footwear industry by the same date.
Charles Dickinson, SVP, head of global quality management & sustainability at Esprit, said working openly with each other is vital to achieve this.

“When we joined, we knew we were making a commitment to zero discharge but we didn’t know how we were going to get there,” he said. “What we
realized is that we couldn’t achieve our aim without collaboration. You don’t realize how rich the knowledge you have within your own company is until
you start to share it with others.”

Auditing production facilities is a natural part of ZDHC’s process and that is an area where collaboration can have multiple benefits – for example by
reducing the cost of multiple audits if one programme can be recognized by several retailers.

Brands and retailers have been breaking new ground in sharing and collaborating recently, particularly in the safety initiatives currently taking place in
Bangladesh, but Marieke Weerdesteijn, programme manager at Solidaridad, said that a lot of the time in audits is spent trying to hide the problems
and that their effectiveness can be increased if the factories themselves are brought into the process on an ideological basis too.

“If we want to improve the impact of auditing we need to move to more self-auditing or joint auditing, so the ownership of sustainability is jointly held,”
she said.

Negocios y estrategias > Información de negocios y tiendas > Conferencias de tiendas

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