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PULSE OF THE FASHION INDUSTRY 2019 UPDATE
2019 UPDATE
Publisher Acknowledgments
Global Fashion Agenda, Boston Consulting The authors would like to thank all of those
Group, and Sustainable Apparel Coalition who contributed to this update.
Special thanks go to Global Fashion Agenda’s
Authors
Strategic and Associate Partners, as well as
Morten Lehmann, Gizem Arici, Sebastian
the industry experts and the broader fashion
Boger, Catharina Martinez-Pardo, Felix community who have contributed their time,
Krueger, Margret Schneider, Baptiste insight and expertise to this update and/or
Carrière-Pradal, and Dana Schou took part in the Pulse survey and interviews.
Copywriter Global Fashion Agenda team
Thomas Tochtermann, Jonas Eder-Hansen,
Christine Hall
Alice Roberta Taylor, Anne-Lieke van
Cover Leeuwen and Eva Kruse
Good for You Boston Consulting Group team
Dr Javier F. Seara, Christine Barton, Pascal
Art direction
Enohnyaket, Kelli Gould, Imogen Price, Mario
Thomas Blankschøn Simon, and Sarah Willersdorf
Graphic design Sustainable Apparel Coalition team
Daniel Siim, IDna Group Alexandra Rosas and Veronique Tjon
2019 Copyright © Global Fashion Agenda, Boston Consulting Group, Inc. and Sustainable Apparel Coalition
All rights reserved. Reproduction is strictly prohibited without prior written permission from the publishers.
Every effort has been made to trace the copyright holders for this publication. Should any copyright holders
have been inadvertently overlooked, Global Fashion Agenda, Boston Consulting Group and Sustainable
Apparel Coalition will make the necessary changes.CONTENT
INTRODUCTION TAKING THE PULSE THE PULSE CURVE CONSUMER
OF THE FASHION AND THE ROADMAP SENTIMENT
INDUSTRY TO SCALE
P. 01 P. 03 P. 07 P. 11
PRIORITIES TO DRIVE ENDNOTES APPENDIX GET IN TOUCH
FUNDAMENTAL
CHANGE
P. 15 P. 19 P. 20 P. 25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
PULSE OF THE The 2019 Pulse Score1 shows that the fash-
ion industry has improved its social and
widen. About 40% of the industry have
not yet reached beyond Phase One of the
FASHION INDUSTRY
environmental performance in the past Pulse Curve.2 As a result, if the industry
year, but at a slower rate than the previous does not implement changes at a fast-
year. Despite this improvement, the fash- er rate, it will not be able to achieve the
2019 UPDATE
United Nations Sustainable Development
ion industry is still far from sustainable.
Goals3 or meet the Paris Agreement.4
Furthermore, the findings demonstrate
Global Fashion Agenda, Boston Consult-
that fashion companies are not imple-
ing Group and Sustainable Apparel Coali-
menting sustainable solutions fast enough
tion call upon industry leaders to increase
to counterbalance negative environmental their pace towards a deeper and more
and social impacts of the rapidly growing systemic change. Companies must push
fashion industry. If the Pulse Score stays harder, with more focused and coordinat-
on its current trajectory, the gap between ed efforts, to overcome technological and
industry output and the Pulse Score will economic limitations that hinder progress.
Ø+5% p.a.
EXHIBIT 1 (+81%)
Growth rate projected to increase by 10%
Industry trajectory over past
3 years and projection $3.3T
Gap between industry
growth and Pulse Score
improvements increasing
Risk that the gap will widen if industry does
+4-5% not increase the speed of finding, developing
$1.9T
$1.8T and implementing measures to improve their
$1.7T environmental and social sustainability practices
Growth rate decreased by ⅓
+4pt ?
+6pt 42pt
38pt
32pt
Apparel/Footwear Industry Size
Pulse Score
2017 2018 2019 2020* 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*
*Note: Numbers for years marked with an asterisk mark are projections. Industry size and growth rates for apparel and footwear RSP value in USD based on fixed 2018
exchange rates. Growth rates until 2023 based on Euromonitor data, growth rates between 2023 and 2030 extrapolated based on Euromonitor data at CAGR 5%.
Source: BCG analysis: Euromonitor; GFA: CEO Agenda 2018 1/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
+4pt
Pulse Score growth slowed by Pulse Curve was achieved by firms adopt- This awareness is beginning to have a
one third in 2019 ing sustainability strategy development greater effect on consumer purchas-
The 2019 Pulse Score increased four and governance, setting targets, imple- ing decisions, with more than a third of
points from last year, from 38 to 42 (out improvement menting best practices and aligning their survey respondents reporting they have
already switched from their preferred
of 100), compared to six points in 2018, association affiliations. These important
which means that the speed of measura- since past year preparatory changes will take time—typ-
brand to another for reasons related to
responsible practices. More than half of
ble progress has decreased by a third.
but measureable ically around two years—to translate into
trackable success further along the Pulse
the respondents said they anticipate that
their next purchase decision will be based
Although the continued progress is
encouraging, its decreasing speed is
progress Curve. Meanwhile, frontrunners displayed on these practices. For the first time, this
lower measurable progress, as their work data confirms that most consumers in-
concerning. In the last two years alone decreased by ⅓ in scaling up solutions and bringing prov- clude sustainability considerations in their
the apparel and footwear industry grew decision-making framework. These results
en initiatives deeper into the value chain
between 4 to 5%, in line with projections indicate a shift in importance of these
Without growth in environmental and so- does not necessarily immediately trans-
through 2023 that show annual growth of cial practices through scaling up existing considerations and represent a strong
late into Pulse Score gains. In addition,
approximately 5%. This is largely driven sustainable practices, adopting more effi- signal to the industry.10 This clear trend
tackling issues which require innovation
by increasing demand in Asia-Pacific and cient business models and implementing will continue to grow. It is just a matter of
or changes in business models require time before responsible practices become
developing countries.5 By 2030 the global transformative changes, the gap between
collaborative action. pivotal to decision-making factors when
apparel and footwear industry is expected the growth of the industry and the Pulse
to grow to 102 million tonnes in volume purchasing a product.
Score will widen further. This could have a
Consumers more aware of sustainability,
and USD3.3 trillion in value.6 Moreover, the dire effect on the long-term environmen-
an increasingly important driver in pur- However, consumer considerations of
Sustainable Development Goals estimat- tal, social and financial prosperity of the
chasing decisions sustainable practices are not yet pow-
ed that global carbon emissions need to industry and planet.8
As news outlets and social media shine a erful enough to be the most important
be reduced by 45% from 2010 levels by
light on social and environmental respon- driver of purchasing behaviour. Quality
2030 if global warming is to be limited to The majority of improvements came and aesthetics still dominate decision
a 1.5°C increase and net zero carbon emis- from two segments: small-size players sibility in the fashion industry, consumer
making.11 Nevertheless, for 7% of consum-
sions are to be reached around 2050.7 in the mid-price segment, and medium concern is growing. Mentions of sustain-
ers sustainability is the most important
Even under optimistic assumptions, the and large-size players in the entry-price ability in social media increased a third
decision-making criteria. Yet, the industry
industry’s existing solutions and speed segment. Efforts spreading among the faster than overall social media growth cannot wait for the consumer to lead this
of progress will not deliver the impact smaller companies in the entry-price between 2015 and 2018. Awareness is movement—it is up to fashion leaders to
needed to transform the industry. Fashion segment are encouraging to see. This highest among younger people, especially take bolder moves today to transition to a
needs deeper, more systemic change. movement along the initial phases of the Millennials.9 sustainable industry.
2/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
TAKING THE PULSE OF
THE FASHION INDUSTRY
EXHIBIT 2
Evolution of industry-wide Pulse Score
Speed of measurable progress slowed vs. last year 2019 vs. 2018
2018 vs. 2017
+4pt
+6pt 42pt
This section takes an in-depth 38pt
look at the Pulse Score
results to examine the main
drivers of progress and road- 32pt
blocks the industry faced
during the past year.
In the past year the Pulse Score of the
fashion industry increased from 38 to 42
(out of 100), showing progress toward
advanced social and environmental
performance with companies historically
performing lower than average repre-
senting the main driver of progress. This
four-point improvement represents a
slower rate of measurable progress than
previous years and indicates the increas-
ingly difficult challenges companies face
in advancing their Pulse Scores.
3/25EXHIBIT 3
PRE-PHASE PHASE ONE PHASE TWO PHASE THREE PHASE FOUR
Pulse Score improvements by Taking Uncoordinated Actions Building the Foundation Implementing the Core Expanding to Scale Unlocking the Next Level
performance quartile along the
Pulse Curve 1st quartile:
3rd quartile with biggest upward
42 Top Performers
development during the last year 2nd quartile
65
47 (+1)
3rd quartile
>70 (+4)
60-69 43
(+11)
50-59
4th quartile:
40-49 Bottom
Performers
30-39
16
20-29
(+4)*PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Key results by segment and size EXHIBIT 4 Pulse Scores by segment and size
For a more nuanced understanding of Strong improvements made in previously low-performing segments
Pulse Score 2019 (vs. 2018)
the industry’s progress, the Pulse Score Global
Revenue Size Market Share 0 10 20 30 40 50 60 70 80 90 100
is broken down by segment and size to
reveal patterns and to incorporate tailored $0-$1B 2% Small players - Luxury 52 (+1)
recommendations. Premium segment
>$1B 5% Large players - Luxury 54 (+3)
Premium segment SC* $0.1B-$1B 3% Sustainability Champions 80 (±0)
The premium segment saw solid scores
$10B 2% Giant players - Fashion 58 (±0)
some of these advances are not reflected
in Pulse Scores, but this does not mean >$10B 6% Giant players - Sports 85 (+1)
that projects are unsuccessful, but ratherPULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Key results by value chain step this section are not comparable to the sustainability that involve target defini-
Examining Pulse Scores along specific previous years. tion, strategy setting and governance.
steps of the value chain that require more The latter step essentially encompasses
Two steps within the value chain that the production of garments and footwear.
attention reveals performance differenc-
As for other steps in the value chain,
es. Since the enhancement update of the show above-average performance are
Product Development showed average
indicators in the value chain section in the Management & Target Setting and Sup- performance, whereas Packaging, Trans-
Higg Brand & Retail Module beta version, ply Chain. The former covers enabling portation, Distribution, Retail, and Use &
the scores along the value chain steps in activities and overarching aspects of End-of-Use showed lower performance.
EXHIBIT 5 Pulse Scores by value chain step: Management & Target Setting and Supply Chain show strongest scores Weak Strong
70
Management Product Use
Product Development Supply Chain Packaging Transportation Distribution Centres Retail Stores
& Target Setting & End-of-Use
Normalised total 56 38 42 32 30 31 28 31
1st quartile 75 53 68 54 46 48 45 47
2nd quartile 68 45 46 23 22 22 28 35
3rd quartile 59 41 42 30 32 33 24 34
4th quartile 21 11 14 19 19 19 17 9
Spread
Top/Bottom 54 42 54 35 27 29 28 38
6/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
THE PULSE CURVE
AND THE ROADMAP TO SCALE
The Pulse Curve showcases a five-phase trajectory of the Pre-Phase: Taking Uncoordinated Actions Phase One: Building the Foundation
Companies in the weakest performance Building the foundation usually starts with
industry’s social and environmental performance, provid- segment show little progress. With a a formal commitment to sustainability.
ing guidance for fashion companies as they assess their lack of visibility over environmental and Companies in this phase start to build
current standing, locate themselves against their peers social performance along the value chain, the enablers by empowering dedicated
finding the right starting point proves resources, setting targets and direct-
and map out their next steps. ing efforts toward creating visibility in
to be a challenge. Most companies here
Each phase defines a set of priorities and milestones for have yet to commit fully to sustainability the supply chain. They have mustered
the organisational will and resources to
companies to focus on, which are summarised by the CEO and lack a clear strategic direction and
initiate activities. Fashion companies in
Agenda.14 The Roadmap to Scale15 captures these priori- corresponding internal structure. Many,
this phase have a clear view of their own
however, engage in initial actions that are
ties along the Pulse Curve and offers actionable guidance mostly uncoordinated and opportunistic.
performance, responsibilities and overall
footprint, while seeking knowledge from
for the sustainability journey of fashion companies. The Roadmap to Scale does not cover
outside experts and associations. This
this pre-phase, when companies are still foundation lifts the individual Pulse Score
becoming aware of the possibilities for and will prove crucial for later success, as
change and lack a clear strategic direction it facilitates all efforts undertaken. Com-
and corresponding internal structure. The panies in this phase focus on key enablers
roadmap begins with Phase One, after that lay the groundwork for any initiatives
fashion companies have formally commit- implemented along the Roadmap to Scale
ted to improving their environmental and and determine the brand’s ability to scale
social performance. sustainability efforts later.
7/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Phase Two: Implementing the Core Phase Three: Expanding to Scale Phase Four: Unlocking the Next Level
Targets, dedicated resources, budget- Companies amplify their efforts and take Pulse Scores rarely rise above 80 because
ing and established traceability enable their initiatives to scale while reaching doing so largely depends on technolog-
the industry to implement collaborative deep into their value chains. In close ical and business model innovations that
initiatives that address core business collaboration with their suppliers, they go far beyond what is currently availa-
processes and impact areas within their implement improvement measures and ble and what individual companies can
supply chain. Both environmental and advanced solutions that increase profita-
accomplish. This further proves that the
social issues are preferably tackled using bility as well as environmental and social
fashion industry needs to invest in trans-
a standardised measurement tool and performance. At some point these initia-
formational innovations and disruptive
reporting framework. In parallel, im- tives also begin reaching their limits and
business models. Scaling these technolo-
provements to the material mix are un- attainable impact. Fundamental, trailblaz-
dertaken. All exemplary initiatives create ing solutions are not broadly available. The gies will depend on leadership, a fit-for-
positive momentum in the organisation, majority of large sportswear and fashion purpose ecosystem and industry cooper-
unlocking further resources. As they pro- players operate in this phase. Their efforts ation among regulators and consumers.
gress, fashion companies start to realise to scale up activities in their supply chains Only with a strong commitment can the
their preliminary positive environmental, have only led to small, incremental returns industry push the Pulse Curve upward to
social and financial impact. in Pulse Score improvements. a greater degree.
8/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
EXHIBIT 6
PRE-PHASE PHASE ONE PHASE TWO PHASE THREE PHASE FOUR
Pulse Curve and Roadmap
to Scale Taking Uncoordinated Actions Building the Foundation Implementing the Core Expanding to Scale Unlocking the Next Level
Guidance for brands to
benchmark themselves and
understand next steps
20 40 60 80
>70
60-69
50-59
40-49
30-39
20-29Continued from previous page Continued from previous page Continued from previous page Continued from previous page Continued from previous page
PRE-PHASE PHASE ONE PHASE TWO PHASE THREE PHASE FOUR
FOURTH
INDUSTRIAL
REVOLUTION
PROMOTION OF
Joining global platforms to
BETTER WAGE
promote better wage systems
SYSTEMS
CIRCULAR Training designers, reducing pre-
FASHION and post-consumer waste and
SYSTEM engaging customers
SUSTAINABLE Baselining and improving material
Increasing share of non-conventional materials and implementing
mix starting with high volume and
MATERIAL MIX sourcing guidelines
high impact materials
COMBATING Setting science-based targets,
implementing efficiency programmes Collaboration along value chain and with industry peers, manufacturers,
CLIMATE and increasing the use of renewable investors and policymakers
CHANGE energy
RESPECTFUL AND Implementing collaborative
Expanding collaborative initiatives in supplier base and increasing worker
SECURE WORK initiatives to enhance working
engagement and skills
ENVIRONMENTS conditions in main facilities
EFFICIENT USE OF Implementing collaborative
Scaling efficiency programmes across supply chain and investing in
WATER, ENERGY resource efficiency programmes
targeted, high-impact initiatives
AND CHEMICALS in main facilities
SUPPLY CHAIN
TRACEABILITY Increasing supply chain visibility starting with tier-one/tier-two, gradually extending to tier-three/tier-four
TRACEABILITY
RESOURCES Dedicated resources with management mandate growing into a full team embedded in organisation
ENABLER STRATEGY Measurable targets leading to a full sustainability strategy closely tied to the corporate strategy
COMMUNICATION Internal and external communication with stakeholders
10/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
CONSUMER SENTIMENT
Consumers are increasingly aware and maintain a competitive edge with con- EXHIBIT 7 Importance of sustainability for consumers and its triggers
Importance of sustainability mostly triggered by climate change and natural disasters
concerned about social and environ- sumers. As more digital and social media
mental responsibility in the fashion natives come of age, with their expecta-
industry. Proprietary research by Boston tion and desire for information, brands Importance of sustainability when purchasing fashionI 42%
Consulting Group16 shows that 75% of must increasingly connect with them
33%
consumers in the five countries surveyed where they are most engaged.
view sustainability as extremely or very
important. This is further substantiated Raising awareness drives consumers to 18%
by an increase in sustainability mentions switch to brands they trust
on social media, which was a third higher
Research shows that 38% of consumers 4%
than the overall growth of social media 3%
report actively switching from their pre-
posts. As the growth of positive mentions Not at all important Somewhat important Neutral Very important Extremely important
ferred brand to another because it credi-
of sustainability is more than proportion-
bly stands for positive environmental and/
al, brands have an opportunity to lever- Triggers of sustainabilityII
or social practices.17 Drilling down further,
age their work toward better practices,
contribute to the positive momentum and young consumers are more interested Climate change awareness efforts 50%
in social and environmental practices in
75%
fashion, with 48% of the Founders genera- Natural disasters in the world 49%
tion18 stating they have switched brands Reading about sustainability 44%
based on these considerations, compared
of consumers in to just 28% of Baby Boomers.19 More than Watched a documentary on sustainability 32%
50% of consumers plan to switch brands Flooding in many parts of the world 29%
the five countries in the future if another brand acts more
Tsunami in Asia 16%
environmentally and socially friendly than
surveyed view their preferred one. The question is no Factory fire in Bangladesh 13%
sustainability as longer whether it is necessary to improve
sustainable business practices, but rather Other 4%
extremely or very how long it will take before consumers
stop buying from brands that do not act I. Question: How important is sustainability to you when purchasing fashion products, on a scale of 1 to 5?
important. responsibly.
II. Question: Which of the following, if any, triggered you to become conscious of sustainability as an issue?
Source: BCG Sustainability survey March 2019, N = 703 (US) ; 703(UK) ; 529(FR) ; 514(CN) ; 523(BR)
11/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
For
7%
17%
of consumers, looking
sustainability successful
is the key purchasing
16%
and
23%
criterion, but prioritise
high quality,
receiving good
value for money
Overall consumer expectations can be However, sustainability considerations The strongest triggers for conscious to change lives for the better, reduce the
divided into table stakes, or basic require- are not yet powerful enough to be the behaviour concerning sustainability are carbon footprint and be a role model. For
ments, and the differentiating attributes most important purchasing criterion. For climate change efforts (50%) and natu- outerwear, the strongest association is to
they are willing to pay a premium for. establish oneself as a community leader.20
7% of consumers, sustainability is the ral disasters (49%). Consumers mostly
Taking a stand against child labour, animal Furthermore, the importance attributed to
key purchasing criterion, but 23% prior- acquire information about sustainability
cruelty and unsafe working conditions, various aspects differs geographically. For
for example are aspects that consumers itise high quality, 17% looking successful issues through online search (35%), social
example, in the US social aspects have
expect as a baseline. Examples of dif- and 16% receiving good value for money. media (31%) and non-digital print media
a relatively higher importance, whereas
ferentiating attributes that consumers Consumers nevertheless expect brands to (29%).
in China, environmental aspects have a
potentially find worth paying more for in- be concerned about environmental, social relatively lower importance.
clude the use of responsibly sourced and and ethical issues and to act accordingly. Sustainability carries different mean-
recyclable materials, and biodegradable Sustainability considerations are seen as ings and associations, depending on the
packaging. Consumers expect brands to
a prerequisite rather than a driver of pur- fashion category. For clothing (excluding
be concerned about those issues and act
chasing decisions. outerwear), the strongest associations are
accordingly.
12/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Three consumer segments and six nested brands difficult questions, for example ically, the open segment has a proportion- sustainability into account in purchasing
subgroups21 how a brand ensures that labelling re- ally strong representation in Brazil (20%) decisions.
Three broad segments emerged in the quirements are met. For these consumers, and the US (18%).
survey data regarding consumer percep- responsible practices are a key purchasing Middle ground (49%): These consumers
tion on the importance of switching to a criterion, on par with style and quality. This segment can be further broken down express a mild interest in sustainability
brand with more responsible practices. The demographics of members of this into three subgroups: The enthusiasts in fashion and other product categories.
group range from high-income Gen Xers (3%), for whom sustainability is a key Their knowledge about it is superficial,
Open (16%): These are consumers who with graduate or professional degrees purchasing driver; the subgroup high and they view sustainability as a nice-
have a high interest and knowledge about and retired Baby Boomers with medium involvement (10%), where sustainability to-have factor. They also expect brands
production conditions. Their knowledge income to Millennials who are employed plays a major role in purchasing deci- to take action and communicate about
goes beyond the superficial, and they ask full-time with medium income. Geograph- sions; and the believers (3%), who take it. These consumers follow the recom-
EXHIBIT 8 Six key segments of sustainability consumers The exhibit shows an aggregated percentage of population in subsegments
Majority of fashion consumers are in the middle ground The circles are an indicator for sustainability practice level i.e. how important sustainability is for the consumer segment
100% of population
Resistant (35%) Middle ground (49%) Open (16%)
Enthusiasts (3%)
High involvement (10%)
Believers (3%)
Supporters (7%)
Low involvement (42%)
Rejectors (35%)
Over-index: Demographic Sustainability practice level: Sustainability practice level: Sustainability practice level: Sustainability practice level: Sustainability practice level: Sustainability practice level:
characteristics that occur
over-proportionally in Summary Summary Summary Summary Summary Summary
subgroup compared
to total sample • Not interested in • Mild interest in • Mild interest in • Interest in sustainability • Interest in sustainability • Sustainability is key
sustainability in fashion sustainability in fashion sustainability in fashion in fashion and in other in fashion and in other driver when choosing
• Do not practice and in other categories and in other categories categories categories products
sustainability in other • Some attitudes show • Purchasing decisions • Several attitudes • Have chosen brands • Over-indexes in
categories certain interest in with sustainability in show some interest in based on sustainability in sustainability on all other
• Seek to stretch fashion sustainability mind sustainability the past and will do so in categories
income Profile over-index: • Support sustainability in • Consider sustainability in the future Profile over-index:
Profile over-index: • Lower income other categories purchasing decisions • Sustainability plays • Gen X
• Boomers and Silent • Home maker, not Profile over-index: Profile over-index: major role in purchasing • Male
Generation employed • Lower income • Founders and Millenials decisions • High income
• Lower income • Female • Medium income Profile over-index: • Graduate and
• Mostly high school • Self-employed • Full-time employed • Millenials and Boomers professional degrees
education • Low/Medium income
• Retired, home maker, not • Retired or self-employed
employed 13/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
mendations of brands or people they because they expect them to be more ex- In addition, although the fact that 35% of
trust. For this middle ground, a common pensive. Price is their first purchasing cri- consumers in the resistant segment reject
standard (which does not yet exist) would terion. Among the other criteria they use sustainability outright appears to be an
ensure that the recommendations they to make purchasing decisions, sustainabil- insurmountable hurdle, the industry can-
follow are backed by action. In terms of ity is not one of them. The typical mem- not afford to take the same view. Since
purchasing practices, they view a compa- ber of this segment is a Baby Boomer, has the responsibility for driving change falls
ny’s attitude about responsible practices low to medium income, usually has a high to brands, so too does the job of figur-
as being important, but the key purchas- school education, and is either retired, a
ing out how to get resistant consumers
ing drivers are aesthetic and price. Typical homemaker or unemployed. They have a
on board to see sustainable products as
members of this segment have medium proportionally strong representation in
a new and necessary normal. To do this,
income, are often female and may be the UK (42%).
brands will have to understand the specif-
self-employed, homemakers or otherwise ic needs of these consumers and create
Implications for brands: Take further
not employed. They have a proportionally an overlap between them and sustainabil-
action and openly share progress
strong representation in China (54%). ity drivers.
Improving social and environmental con-
ditions in their value chains is becoming a
The middle ground can be broken down For both messaging as well as actions,
table stake for brands. Not only is taking
into two subgroups: supporters (7%) and brands need to understand the use cases
action inevitable, communicating about
low involvement (42%). While the former and business models that their customer
the actions is also essential. Brands need
supports sustainability in fashion and groups are most interested in. Addition-
to understand how to target the right
other categories but does not consider it ally, brands need to understand exactly
consumers with their communication re-
upon purchase, the latter pays attention what consumers expect from their prod-
garding their efforts to address social and
to the topic without concretely support-
environmental issues. ucts in terms of social and environmental
ing it.
responsibility. Building onto their actions,
Resistant (35%): These are consumers Brands can use these segments to refine brands must create offerings and messag-
who are not interested in the topic of their messaging, with the goal of mak- es that respond in alignment with their
sustainability in fashion, or in other cate- ing their communications relevant to the customers’ interests and main drivers for
gories, such as food and furniture. They broader middle ground and the believer sustainable purchasing practices, hence
might even feel deterred from purchasing subset of open consumers. Together promoting more responsible practices
products marketed as more responsible, these groups make up 52% of consumers. that resonate with their customers.
14/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
PRIORITIES TO DRIVE
TRANSFORMATIONAL
40%
CHANGE
The fashion industry must overcome its aligned with corporate strategy, com-
roadblocks to achieve more substantial munications that clearly convey efforts
improvements that lead to a systemic
change. Solving the challenges of scaling
and innovating disruptive technologies is
internally and externally, and the use of
standardised reporting frameworks. of the industry that
a necessity for future progress. Collabora-
tion is therefore a prerequisite to advance
the sustainability performance of the
Once these fashion companies have laid
the foundation, they can then focus on
the four core priorities in the CEO Agenda
did not move beyond
the Pre-Phase and
industry, which requires not only fashion by:
companies but the wider eco-system to
be on the same playing field. • Increasing supply chain traceability
A closer look at the playing field reveals
that about 40% of the industry did not
by tracing tier one and two manufac-
turers Phase One of the
Pulse Curve has
move beyond the Pre-Phase and Phase • Combating climate change by im-
One of the Pulse Curve, highlighting the plementing measures that reduce
urgent need for these players to laying greenhouse gas emissions
to address the key
the foundation and move toward target-
ing core business processes and impact • Improving efficient use of water, en-
areas for improving their social and envi- ergy and chemicals by implementing
ronmental performance. The critical initial efficiency programmes in processing
steps for these companies have been
identified. Key enablers are the first step
to lay the groundwork for any sustainabil- •
stages
Deepening efforts to establish
enablers and the
ity initiative as they determine the brand’s
ability to scale their initiatives down the
line. These enablers include dedicat-
respectful and secure work environ-
ments by upholding standards for the
respect of universal human rights for
four core priorities
ed resources, strong support from top
management, measurable targets closely
all people employed along the value
chain of the CEO Agenda
15/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
The other 60% of the industry, which Calling on the broader ecosystem to step
already has the aforementioned enablers up to the challenge
in place, should focus on scaling up their Even the most advanced brands face
impacts on the core priorities for immedi- limits to what they can achieve in isola-
60%
ate implementation. tion. To master the significant roadblocks
lying ahead, a strong ecosystem of col-
As a next step for companies moving for- laboration is required to drive impact by
identifying best practices and inspiring
ward with the core priorities, the industry
innovative solutions.
should accelerate collective action to the
next level of transformational priorities,
Two of the key players in the eco-sys-
also described in the CEO Agenda, to
of the industry should
tems are governments and policymakers.
create fundamental change by: While there is much to be done, there is
also increased momentum to create a
• Establishing a sustainable material
focus on scaling up
supportive regulatory framework, which
mix by reducing the negative effects the industry should seize and seek to
of existing fibres and developing new further develop.
innovative, more responsible fibres
core priorities • Building circular fashion systems by
designing, producing, selling and
Governments and policymakers are in-
creasingly keen to play a more dominant
role in advancing the environmental and
and accelerate efforts collecting products that enable the social practices of the fashion industry,
reuse and recycling of post-consumer for two reasons. The first is that the call
textiles at scale for sustainability comes from citizens, or
on transformational
more specifically, the electorate (e.g. the
• Promoting better wage systems by Global Climate March). The second is that
collaborating with industry stake- the pace of the fashion industry’s work
priorities of the
toward better practices is not happening
holders to explore opportunities to
fast enough— policy intervention can help
develop and implement better wage
accelerate it by, for example, applying
systems
CEO Agenda
incentive structures in favour of sustaina-
bility actions.
• Leveraging the fourth industrial
revolution, by embracing the oppor- Some governments have already launched
tunities in the digitalisation of the national initiatives. To name two exam-
value chain and engaging with other ples, the multi-stakeholder initiatives in
brands, manufacturers, and govern- Germany22 and the Netherlands23 led by
ments to prepare for the transition of governing bodies bring together nu-
workforce. merous stakeholders. Governments in
16/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
partnership with companies, business contribute their knowledge to help shape
associations, trade unions, civil society incoming legislation. A smart political
groups and standards organisations pro- approach will ensure a level playing field
vide a platform from which more progress and clearly define sustainability meas-
toward sustainability can emerge and ures. It will avoid additional reporting and
scale. However, the question is whether auditing initiatives, instead incentivising
national approaches are the right answer socially and environmentally responsible
to an international issue. Instead of asking business practices, assisting in proving
the business case. Helpful policy measure-
brands to join a separate initiative in every
ments could entail competition regulation
country, which often involves differ-
as part of future trade agreements to
ent approaches, creating unnecessary
ensure human rights are respected. Or tax
burdens for industry, government action
incentives to create reward systems for
needs to align with businesses and take
the use of sustainable materials to gener-
a more international approach. Moving ate demand.
forward, coordinated action is crucial to
overcoming the challenges of the fashion The industry itself can proactively ap-
industry, given its global nature. An overall proach regulators on the supranational
policy approach, timelines and incentives level and call on national regulators to en-
must thus be aligned at an international gage in international cooperation, helping
level. Progress is already underway to these policymakers understand the need
align these initiatives with the industry for common frameworks and rigorous
using OECD Due Diligence Guidance for standards. Other industries within the
Responsible Business Conduct24 as the European Union, such as packaging27 and
backbone, as for example, the Sustainable consumer electronics,28 have achieved
Apparel Coalition joining forces with the common standard setting.
Dutch and German national initiatives.25
NGOs and media must continue pushing
To pave the way for effective policy, gov- businesses and consumers to support this
transformation strongly by encouraging
ernments and businesses need to work
consumers to find and exercise their voice
together. As a prerequisite for close col-
and urge businesses to supply high-qual-
laboration, policymakers need to be clear
ity sustainable products. NGOs focused
on what the role of governments should
on consumers have a significant role to
be. Business should define its commit- play in educating them via tools such as
ment to change. One factor that contrib- the Fashion Transparency Index29 or Good
utes to the ongoing lack of clarity in this On You.30 These tools provide consum-
area is the traditionally low overall policy ers with ethics ratings and sustainability
engagement from the fashion industry information about factories and suppliers
itself. Active political scrutiny emerged involved in the manufacturing of gar-
after the Rana Plaza disaster;26 the indus- ments from the brands and retailers they
try should seize this as an opportunity to purchase from.
17/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Similarly, investors have important re- place to take a bold stand is urgent. The the challenges of scale and utilise disrup-
sponsibilities. They can serve as a catalyst situation demands that industry players tive technologies that will lead to new
for change toward better ways of doing both jointly lead and push these efforts ways of doing business. Governments and
business if they prioritise sustainability toward common standards and collabora- businesses must also collaborate closely
in their investment decisions. Investors tive efforts on transformational priorities. to establish widespread policies, and in-
should agree to standard disclosure re- This will unleash the forces that the fash- vestors should engage their investees on
quirements, driving impact and helping to ion industry needs to be able to close the the topic of improved socially responsible
push for common reporting frameworks. gap between its own growth and its effort practices. Fashion players who have all
For example, by joining the consortium of to achieve a neutral, or even positive foot- the foundational priorities in place to take
investors led by Mirova, which has called print, moving toward more sustainable a bold stand should both lead and push
for such a framework31, and support the business practices. these efforts toward common standards
Sustainable Apparel Coalition and Global and work with others to tackle the trans-
Reporting Initiative’s efforts toward com- formational priorities. The industry should
mon sustainability reporting frameworks32 also harness the increasing prevalence of
FOR A
In addition investors should engage their sustainability in the consumer conscious-
investees on the topic of improved social ness by communicating their develop-
and environmental practices and ask them ments, which will encourage consumers
to join the push for a common framework,
potentially working together with legisla-
tors.
WORLD to actively purchase more responsible
products.
As for co-investment, the fashion industry BEYOND Global Fashion Agenda, Boston Con-
sulting Group, and Sustainable Apparel
NEXT
can learn from the best practices of other Coalition hope the fashion industry will
sectors to inspire them on ways to collab- respond to the call for future collabora-
orate. For example, the car manufacturers tion and innovation. This research was
BMW and Daimler teamed up to jointly
confront new players and regulation by
working on five joint ventures at the same
SEASON conducted with the aim to ultimately
advance the sustainability agenda and
consequently help to safeguard the future
time.33 This offered them a level of scale We call on industry leaders to react now of the fashion industry, our people and
they could not achieve on their own to to the findings highlighted in the Pulse our planet.
address disruptive businesses, such as car of the Fashion Industry 2019 Update and
and ride-sharing and electromobility, but use them as a driving force for immediate
also the regulation that is likely to ensue. action.
Given the plateau where the industry finds The fashion industry has shown progress
itself—with 60% of companies struggling toward better social and environmen-
to find a way past the technological and tal performance over the year, but the
economic hurdles, and 40% still working slackened pace is alarming. We must
to catch up— the call for players in the increase the momentum to establish
ecosystem who have all core priorities in lasting impact. Businesses need to solve
18/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
ENDNOTES
6 Global Fashion Agenda and Boston Con- ion Industry. Retrieved 13 April 2019, from nership-for-sustainable-textiles-cooper-
sulting Group (2017). Pulse of the Fashion https://www.globalfashionagenda.com/ ate-to-align-on-674445443.html
Industry. Retrieved 10 April 2019, from publications/#pulseofthefashionindustryre- 26 E.g. European Parliament (2017). Report on
https://www.globalfashionagenda.com/ port the EU flagship initiative on the garment
wp-content/uploads/2017/05/Pulse-of-the- 16 Research conducted in March 2019 with
sector. Retrieved 12 April 2019, from http://
Fashion-Industry_2017.pdf almost 3,000 participants spread out be-
www.europarl.europa.eu/doceo/docu-
7 IPCC (2018). Global Warming of 1.5°C. tween Brazil (523 participants), China (514
ment/A-8-2017-0080_EN.pdf
Retrieved 11 April 2019, from https://report. participants), France (529 participants),
27 European Commission (2018) Packaging
ipcc.ch/sr15/pdf/sr15_spm_final.pdf the UK (703 participants) and the US (703
8 Global Fashion Agenda and Boston Con- and Packaging Waste. Retrieved 19 April
participants). To complement the results, a
sulting Group (2017). Pulse of the Fashion social media listening has been conducted. 2019, from http://ec.europa.eu/environ-
Industry. Retrieved 10 April 2019, from 17 Ibid. ment/waste/packaging/index_en.htm
https://www.globalfashionagenda.com/ 18 Founders are defined as being born be- 28 European Commission (2018) Waste Elec-
wp-content/uploads/2017/05/Pulse-of-the- tween 1997 and the mid-2000s. The survey trical & Electronic Equipment (WEEE). Re-
Fashion-Industry_2017.pdf sample only includes individuals aged 18 or trieved 19 April 2019, from http://ec.europa.
1 See Taking the Pulse of the Fashion Industry 9 Consumer sentiment survey conducted by older and the Founders in the survey were eu/environment/waste/weee/index_en.htm
in Appendix. Boston Consulting Group in March 2019 for born between 1997 and 2001. 29 Fashion Revolution (n.d.). Why transparen-
2 See Global Fashion Agenda and Boston the Pulse of the Fashion Industry Update 19 Baby boomers were born between 1947
cy matters. Retrieved 18 April 2019, from
Consulting Group (2018). Pulse of the Fash- with 2,900 participants from Brazil (523 and 1966.
https://www.fashionrevolution.org/about/
ion Industry. Retrieved 16 April 2019, from participants), China (514 participants), 20 See exhibit 10 in Appendix.
transparency
https://www.globalfashionagenda.com/ France (529 participants), the UK (703 21 See exhibit 11 in Appendix.
30 Good On You (2019). Who made my
publications/#pulseofthefashionindustryre- participants) and the US (703 participants). 22 Partnership for Sustainable Textiles (n.d.).
Survey complemented by a social media clothes? And other important questions.
port Socially and Environmentally – we’re on the
3 United Nations (n.d.). About the Sustain- listening analysis based on posts on Insta- right track. Retrieved 16 April 2019, from Retrieved 18 April 2019, from https://good-
able Development Goals. Retrieved 16 April gram, Twitter, reviews, blogs etc. https://www.textilbuendnis.com/en. onyou.eco
2019, from https://www.un.org/sustain- 10 Ibid. 23 The Social and Economic Council of the 31 Mirova (2018). Sustainability requirements
abledevelopment/sustainable-develop- 11 See exhibit 9 in Appendix. Netherlands (2016). Agreement on Sustain- in the apparel industry Retrieved 10 April
ment-goals/ 12 The top quartile comprises 25% of the mar- able Garment and Textile. Retrieved 16 April 2019, from https://www.mn.nl/en/publica-
4 United Nations Climate Change (2015). ket with the highest Pulse Scores, the other 2019, from https://www.ser.nl/-/media/ser/ tions/sustainability-requirements-in-appar-
Paris Agreement. Retrieved 16 April 2019, three quartiles following in succession. downloads/engels/2016/agreement-sus- el-industry/
from https://unfccc.int/sites/default/files/ 13 Stella McCartney (2019). Circularity – re- tainable-garment-textile.pdf
32 GRI (n.d.). GRI Standards. Retrieved 18 April
english_paris_agreement.pdf generative farming. Retrieved 13 April 2019, 24 OECD (n.d). Retrieved 16 April 2019, from
2019, from https://www.globalreporting.
5 Boston Consulting Group calculation based from https://www.stellamccartney.com/ http://www.oecd.org
org/standards
on Euromonitor data (worldwide apparel experience/en/sustainability/circularity-2 25 Sustainable Apparel Coalition (2018).
33 BMW Blog (2019). BMW and Daimler Con-
and footwear industry production value, 14 Global Fashion Agenda (2019). CEO Sustainable Apparel Coalition and German
firm Five Joint Ventures for Mobility Ser-
historic 2018 fixed exchange rate, USD). Agenda 2019. Retrieved 12 April 2019, from Partnership for Sustainable Textiles Cooper-
Projection until 2023 based on the same https://www.globalfashionagenda.com/ ate to Align on Supply Chain Due Diligence. vices. Retrieved 10 April 2019, from https://
Euromonitor data; projection until 2030, ceo-agenda-2019/# Retrieved 18 April 2019, from https://www. www.bmwblog.com/2019/02/22/bmw-and-
Boston Consulting Group analysis by ex- 15 See Global Fashion Agenda and Boston prnewswire.co.uk/news-releases/sustain- daimler-confirm-five-joint-ventures-for-mo-
trapolation of Euromonitor projections. Consulting Group (2018). Pulse of the Fash- able-apparel-coalition-and-german-part- bility-services
19/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
APPENDIX
20/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
Taking the Pulse of the Fashion Industry The Pulse Score
WHY A PULSE SCORE? 1. Expert interviews going through Higg Index has a brand, a facility, and a product The Pulse is a baseline score, pow-
The Pulse Score is a global and holistic BRM questions to test patterns and module. ered by the Higg Index, for measur-
baseline of the sustainability manage- validate and pressure testing answers ing and tracking the sustainability
ment, target setting and implementation live with sustainability managers Last year, the Brand & Retail Module has management and target setting of
of sustainability initiatives of the fashion been renewed, incorporating the users’ the global fashion industry on key
sector. It is based on the Sustainable Ap- 2. Pulse survey answers to reconfirm feedback and experiences. The new ver- environmental and social impact
parel Coalition’s (SAC) proprietary Higg sustainability patterns and perfor- sion is holistic, provides an understanding areas. It is measured on a scale from
Index and extends its scope to extrap- mance to increase sample size and of key impacts, is actionable and supports 0 to 1002.
olate its findings to the entire industry. fair market representation further business integration in clarifying internal
The Higg Index is the most extensive interdependencies.
+4pt
and representative existing transparency 3. Expert sounding board to validate
+6pt
measurement tool of the industry. and discuss results This version sets a new benchmark, with 42pt
results by value chain step not being
The Pulse Score creates transparency and To get a representative view of the entire directly comparable to the previous years.
38pt
a common understanding of the indus-
try’s most critical issues. This serves as a
market, results were analyzed by compa-
ny size and price positioning, and re-
The overall scores remain comparable.
32pt
foundation for the landscape to change, weighted according to the overall market
channeling investments and innovation structure based on revenue contribution.
into those areas that smart businesses will
capture and benefit from. ABOUT THE HIGG INDEX
The Higg Index, developed by the Sus-
METHODOLOGY tainable Apparel Coalition, is a suite of 2017 2018 2019
The Pulse Score was developed based on: sustainability assessment tools that em-
power brands, retailers, and facilities of all
SAC Higg Index Brand & Retail Module sizes, at every stage of their sustainability
(BRM) as the underlying data source, journey, to measure their impact on envi- Strong >70
clustered into segments to detect pat- ronmental and social dimensions and to 60-69
terns1 and is complemented by: identify areas for improvement. The Higg 50-59
40-49
30-39
20-29
The Higg Brand & Retail Module beta module is unverified, meaning in this context that it is based on a self-assessment that has not
been audited or reviewed externally. WeakPULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
EXHIBIT 9 Top fashion purchase criteria
For 7% of consumers, Sustainability is their top criterion when making a fashion purchase
2%
23% 7%
17%
Stand out with style High quality Popular with influencers* Makes me feel successful*
16% 7%
15% 7%
Good value for money Manufactured sustainably Brand for me Timeless*
7%
Totals do not add up to 100 due to rounding.
Based on need sizing through factor analysis of
functional decision criteria for fashion purchase*
Original wording: Brand makes me feel successful /
Fashion forward Timeless, doesn’t go out of style / Recommended
by celebrities, experts or bloggers
Source: BCG Sustainability survey March 2019, N =
703 (US) ; 703(UK) ; 529(FR) ; 514(CN) ; 523(BR)
22/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
EXHIBIT 10 Emotional factors of sustainability Question: Thinking about sustainabili-
Quantitative analysis deconstructs sustainability into 11 emotional factors ty, which emotional fulfillment do you
seek when purchasing products in
fashion categories?
Source: BCG Sustainability survey
Reducing my carbon footprint March 2019, N = 703 (US) ; 703(UK) ;
529(FR) ; 514(CN) ; 523(BR)
Feeling less guilty Be a role model
for wearing luxury for those around me
Shaping mission of Changing lives
brands and companies for the better
Establish myself as a community leader Emotional Fighting for social justice
hooks for
sustainability
Providing advantages
Paying it forward I had to others
Doing something Fulfilling my
other than work faith/believe
23/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE CONTENT
EXHIBIT 11 Emotional factors of sustainability Source: BCG Sustainability survey March 2019, N =
Quantitative analysis deconstructs sustainability into 11 emotional factors 703 (US) ; 703(UK) ; 529(FR) ; 514(CN) ; 523(BR)
Average descriptors Resistant (35%) Middle ground (49%) Open (16%)
Age 47 years 41 years 42 years
Income
H 18% M 49% L 33% H 22% M 46% L 32% H 23% M 48% L 29%
Gender
F 51% M 49% F 49% M 51% F 48% M 51%
Segment sizes per country US 36% UK 42% FR 35% US 46% UK 45% FR 50% US 18% UK 13% FR 15%
CN 31% BR 30% CN 54% BR 50% CN 15% BR 20%
No child labor, 46% No child labor, 50% No child labor, 62%
Top table stake attribute
Cruelty free, 43% No animal testing, 48% Safe working conditions, 58%
No animal testing, 39% Cruelty free, 47% No animal testing, 58%
Sustainably sourced materials, 36% Made in country known for sustainability, 39% Brand donates rev. share to charity, 42%
Top differentiator attribute
Manufacturing w/o excessive waste, 35% Manufacturing w/o excessive water usage, 39% Only natural/organic ingredients, 40%
Biodegradable packaging, 34% Brand donates rev. share to charity, 38% Recycled materials, 40%
24/25GET IN TOUCH GLOBAL FASHION AGENDA
Frederiksholms Kanal 30-C
1220 Copenhagen K
Denmark
GLOBALFASHIONAGENDA.COM
MORTEN LEHMANN
MORTEN@GLOBALFASHIONAGENDA.COM
THE BOSTON CONSULTING GROUP, INC.
200 Pier 4 Boulevard
Boston, MA 02210
USA
BCG.COM
JAVIER SEARA
SEARA.JAVIER@BCG.COM
SEBASTIAN BOGER
BOGER.SEBASTIAN@BCG.COM
SUSTAINABLE APPAREL COALITION
PO BOX 237
San Francisco, California 94104
USA
APPARELCOALITION.ORG
BAPTISTE CARRIÈRE-PRADAL
BAPTISTE@APPARELCOALITION.ORG
25/25PULSE OF THE FASHION INDUSTRY 2019 UPDATE
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