Sustainability commitments outlined by fashion brands prior to the Covid-19 crisis could suffer unless action is taken to prevent backsliding, according to a report.
The report, by Boston Consulting Group (BCG), the Sustainable Apparel Coalition (SAC) and technology firm Higg Co, said prior to the outbreak of the virus, many brands had made environmental and social commitments on carbon emissions, responsible sourcing and worker wellbeing.
However, it added the fashion and luxury sectors had been severely impacted by the pandemic, and global sales had decreased by 60-70% in April.
Manufacturers also faced cancellations of completed and near-completed orders. A survey conducted by SAC and Higg Co in April found 86% of manufacturing facilities had been impacted by cancelled or suspended orders. As a direct consequence, 40% struggled to pay employees, leading to layoffs and factory closures.
“With livelihoods jeopardised in some of the poorest nations in the world, the human toll of the pandemic is expanding out further, eliminating incomes and threatening food, shelter, and security for those at the start of the value chain,” the report said.
The report said fashion brands must work in partnership with their suppliers to solve immediate inventory challenges as a result of the virus.
It added brands must recognise the importance of open dialogue and constructive partnerships with suppliers to recover from the impact of Covid-19. Shared solutions must be found to protect worker livelihoods and sustain trust.
“Cancellation of completed orders will be a measure of last resort, while cancellation without consultation or collaboration will be an unacceptable practice,” it said.
Sustainability must be integrated throughout business recovery strategies with leaders making it “central to post-pandemic decisionmaking”, and transparency should be accelerated to assess and demonstrate the positive environmental and social impact.
Javier Seara, BCG managing director, fashion and luxury sector, said: "This is a moment of truth for fashion industry players. Companies will need to change and are already changing their businesses to adapt to the new reality. Relentlessly incorporating sustainability practices into these changes will be the critical factor that separates winners from idlers."
The Bangladesh Garment Manufacturers and Exporters Association estimated almost $3.2bn worth of orders had been cancelled or suspended due to the virus.
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