How capital intensive is it to go ‘sustainable’?
The definition of sustainability is; is your business going to be around in the future because you are taking the right and proper actions today? ‘Sustainable’ is not to be taken as a short term gain for which we do the wrong thing, exploit a resource or situation and only engage public relations in thinking and broadcasting but not acting and really being truly green. Sustainability is longevity and longevity only comes with consistently doing the right thing. We rely on major global brands to do the right thing. The vast majority of key brands today are invested in doing the right thing because they want to have sustainable businesses. To be successful they need to manage their reputational risk at every stage in the supply chain.
These organizations need to have social, environment, safety, regulatory and quality attributes delivering to its overall brand value and proposition right. To them this is an investment and not a cost. To them it is about doing the right thing and being a sustainable business. A bad reputation is very damaging to any business in today’s vocal and visible media.
Now on the point of how much capital intensive it is, I would say, it depends on which business you are in. For example, if you’re a Textile Mill and using a lot of performance chemicals for washing, dyeing and treating fabrics and garments, it could be a lot more expensive as you need water treatment plants and more.
As far as the garment manufacturing industry is concerned, I think they can reduce being capital intensive since there are many good practices like reducing energy and electricity usage whether its fuel, petroleum or gas; sourcing raw material from environmentally responsible suppliers; and ensuring the packaging material used is made up of renewable and bio degradable substances.
Companies can also work on designing eco friendly products or advocating eco friendly ways of using products. For example, a famous apparel company found that 80% of the carbon footprint of jeans is not as a result of growing cotton, transportation or manufacturing it but is instead due to the actions of the end user – ie the consumer. When the jeans are washed in a washing machine with warm water, the carbon footprint escalates dramatically. So the company is considering designing cold wash fabrics with awareness campaigns to promote cold washing while simultaneously reducing the energy use and carbon footprint.
A combination of the above good practices such as reduce, reuse, recycling water, using less energy, asking staff to use electricity in a conservative manner; material design efficiency and lean management concepts not only supports sustainability but also helps companies save on operational costs.
What level of awareness is there amongst manufacturers as many often see all these new standards and requirements imposed by global brands and retailers as a hindrance and added cost to business?
This perception is misguided and can depend on the maturity of the manufacturer and its management.
History has so far demonstrated that successful businesses will be the ones that understand these requirements as a pre-requisite to doing business and should be priced into the products themselves.
Producing Safe Products, Complying with regulations, being Socially and Environmentally responsible is a basic human desire and need. This is not something for which you can always demand a premium. Your customers are already assuming that you are doing the right thing. You can not say that if I do all these good things will you pay me more. It is already assumed, given and expected by customers.
The top of the supply chain is occupied by global brands and retailers that interface with everyday customers in global markets who understand this very well. They are often the major change agents enforcing these requirements with foreign manufacturers in developing countries. If they get it wrong then their brands are at the mercy of the international media. Their reputational risk is huge if something goes wrong – hence why they are adamant about managing and monitoring their operations with as close to possible perfection.
My message to foreign manufacturers is to look at these new standards and requirements as opportunities to gain preferred supplier status. Think of them as a prerequisite to future, sustainable business.
Secondly, if you become a successful exporter then you also develop the right ingredients and brand credentials to become a successful domestic brand.
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.