When we think of sustainability issues, the apparel industry is probably not the first thing to come to mind. The current environmental and social realities of this vast industry present some huge challenges though. Much attention has been paid recently to the consequences of the “fast fashion” phenomenon, in which mass retailers create and sell inexpensive clothing in response to the latest trends (e.g. Forever 21, H&M, Forever 21, Target, Uniqlo and Zara). Using cheap materials and labor allows companies to churn out new collections rapidly, but the model has some serious drawbacks. According to a McKinsey and Company study, consumers purchased 60% more items of clothing in 2014 vs. 2000, but kept each items half as long. These garments either fell apart, fell out of style or were simply viewed as disposable.

A recent study by the Ellen McArthur Foundation found that one garbage truck of textiles is wasted every second. And the Copenhagen Fashion Summit reported that fashion is responsible for 92 million tons of solid waste dumped in landfills each year. If current trends continue, the fashion industry will use up a quarter of the entire planet’s carbon budget by 2050. This “take, make and dispose” M.O. is not only wasteful, but also polluting. Clothes release half million tons of microfibers into the ocean annually (equivalent to 50 billion plastic bottles!). Around 100,000 marine animals are killed each year due to microfibers and other forms of plastic waste. To compound matters, they are extremely difficult to remove and are now interfering with food chains. The fashion industry is also the second-biggest consumer of water, producing 20 percent of wastewater while also generating more greenhouse gas emissions than all international flights and maritime shipping combined.

The no-waste economy should be applied to fashion, just as it is in the food industry. We need action at each stage of the supply chain, starting with sustainable sourcing of fabrics, through to design, exploration of possible alternatives to distribution, and recovery and recycling of clothing.

With the major environmental concerns, it’s easy to overlook the appalling workplace conditions and human rights abuses. According to unions and workers’ rights groups, pressure to meet fast deadlines is leading to women working in some Asian factories being sexually and physically abused.

The economic impact is also staggering. Approximately $500B is lost every year due to clothing that’s barely worn and typically not recycled.

Green America, a network of businesses committed to sustainable practices of which I’m a member, has done some great work on this issue and has some great resources including a Consumer Guide that highlights steps that everyone can take to make a difference. It also provides a scorecard of major U.S. apparel manufacturers sustainability record, a guide to chemicals of concern, and an FAQ. The report and the other resources are available at GreenAmerica.org/program/toxic-textiles.

In the custom sustainable investing portfolios we manage for our clients, we’re able to screen out the companies that are the laggards, leaving those companies that are making real progress in confronting these issues. It’s always critical though to look at the risk and return consequences of any screening so our process ensures that our screened portfolios are still properly balanced and diversified.
Harry Moran,