Executive Summary

This business report has been prepared as a part of Supply Chain Management for

the Bachelor of Fashion (F&T Marketing) at RMIT. The fashion industry is one of the

biggest players in the global economy. The raw materials stage, processing and

production as well as distribution all have huge implications on our planet.

The objective of this report was to research and discover how the Triple Bottom Line,

as well as sustainability concepts, can be applied to fashion brands. A number of key

frameworks were investigated in relation to brands supply chains. The Triple Bottom

Line serves as a central tool to support a firms sustainability goals. This framework

is based on three pillars of sustainability; planet, profit, and people. The G4

Sustainability Report is another tool that discloses an organisations most critical

impacts on the environment, society and the economy. The Ethical Consumer Model

re-articulates policies and campaigns to influence ordinary consumers on aspects of

social change through the promotion and packaging of consumer products.

A case study of Honest By and Zara assisted in key recommendations and strategies

for the brands in terms of sustainability and the TBL. Honest By is the worlds first

100% transparent brand, disclosing such information as the origins of raw materials,

the address of the manufacturing factories as well as how much the garment is

marked up. Many strengths are presented in all three of the TBL concepts; people,

profit and planet. Zara was riddled with environmental and ethical issues and it was

clear that they would benefit from rethinking their supply chain more similarly to

Honest By.
Lastly, key recommendations for the fashion industry as a whole are outlined. These

included for the industry to become more transparent, a slow fashion movement and

a closed loop systematic approach to garments.

The information throughout the report was sourced through peer-reviewed journal

articles, websites, and directly from researched companies (Honest By & Zara). A

limitation that arose was due to the fact that a university student conducted the

research.
Introduction

Fashion is the second most polluting industry in the world with every stage of the

design and manufacturing process harmful to the earth. We as consumers must be

aware of the human impact on the environment and social responsibility. The two

main issues concerning sustainability within the fashion industry is the earths natural

resources are threatened, as well as social concerns such as workers rights in third

world countries.

Sustainability in fashion demands brands to be environmentally conscious in every

stage of planning, manufacturing and distributing their garments.

Cotton accounts for 90% of natural fibres used in the textile industry making it an

essential fibre used in almost every fashion label. Cotton production is extremely

water intensive and chemically pollutant, heavily relying on the use of pesticides. Not

only this, a vast amount of land is cleared to grow cotton, while simultaneously

reducing natural carbon sinks, contributing to climate change, and destroying

habitats. Not only is the start of the product life cycle hazardous to the environment,

the last stage is often forgotten about- the disposal or end of life stage of a garment.

Fast fashion has enabled consumers to continually buy and throw away garments,

making it the biggest contributor to landfills. In the past two decades the global

average consumption has doubled from 7kg per person to 13kg- the Australian

average is twice that at 27kg per person (Milburn, 2013). There has been a shift in

the traditional model of consumerism. International fashion giants such as H&M have

enabled the average consumer to purchase garments at low prices. With such a fast

turnover, companies are still making a profit while selling a pair of jeans for $25.
Social responsibility in the fashion industry came to a forefront in 2012 with the

collapse of Rana Plaza in Bangladesh. Over 1,100 garment workers were killed

when the multi story factory complex collapsed (Coulter, 2016). The tragedy forced

global companies and brands to address the working conditions, safety and labour

issues that riddled the garment industry (Coulter, 2016). While the immediate focus

was on building and fire safety, it was significantly important to concentrate on

worker engagement. The Rana Plaza workers had initially raised concerns to

management regarding the cracks of the complex however were left unheard.

Measuring sustainability is becoming increasingly important within the fashion

industry. The responsibility of sustainability does not just fall on fashion brands;

consumers have an equal accountability. Conscious consumerism is about sharing

existing resources and limiting new purchases. Consumers are beginning to take into

account the impact that their purchases have regarding people and the environment.

We as consumers have to understand how purchases can assist in shaping more

sustainable business practices as well as a more responsible economy as a whole.

Buy less, choose well, a quote by Vivienne Westwood is the perfect mindset we as

consumers need to have.

Literature Review
Triple Bottom Line (Planet, Profit, People)

The function of integrating sustainable principles into supply chains is an evolving

research area with a number of theories, models, and frameworks. The triple bottom

line serves as a framework for consumers perceived sustainability of fashion brands

and a central tool to support a firms sustainability goals (Park & Kim, 2016). The

term triple bottom line was created by John Elkington in 1994 and proposes three

pillars of sustainability. These include environmental, economic and social or

otherwise known as planet, profit, and people.

Fashion brands that are vertically integrated may find incorporating sustainable

practices easier as it less complicated to monitor and control various business

functions that bring products to market (Supply Chain Brain, 2013). Brands that are

not vertically integrated must establish relationships with their suppliers in order to

guarantee an ethical supply chain. The TBL approach can be linked throughout the

supply chain. The people component of TBL for example may connect with the

processing or production stage of manufacturing. In terms of sustainable and ethical

practices, a firm may investigate how the garment workers are treated in factories.

The planet component refers to how environmentally friendly the raw materials

stage of the product is. Lastly, profit can be linked to the retail, consumption and

post-consumption stage of the product life cycle. However, there is some criticism of

the TBL approach. Hindle 2009 argues that the three separate accounts cannot

easily be added up. It can be difficult to accurately measure the people and planet

accounts the same way as profit. He explains in the example of how to calculate the
cost of depriving children of their childhood in order to work at such a young age

(Hindle, 2009).

In todays modern society, fast fashion is encouraging over-consumption and

disposability (Park & Kim, 2016). Park & Kim argue in their article that the TBL

approach may not apply to fast fashion brands. One of the main arguments

presented is that consumers may perceive that the benefits offered by a fast fashion

brand outweigh the negative aspects such as the unsustainable nature of disposable

fashion (Park & Kim, 2016). The main benefit of the fast fashion industry is their

ability to consistently mimic high-end brands at an affordable price. Those who

cannot afford high-fashion products still have that desire for updated, on trend

fashion. There is a general lack of understanding among consumers regarding the

impact fast fashion brands have on the planet and people. Unsustainable

manufacturing and consumption is what the TBH can help reduce by pointing out a

firms weaknesses concerning people, profit and planet. Park & Kim concluded their

research that incorporating the TBL framework will assist consumers perceptions of

a fashion brands sustainability.

G4 Sustainability Report

The fourth generation of the Guidelines launched in 2013, aims to prepare

sustainability reports that can be used by brands to make purposeful sustainability

practices. A great benefit of this model is that it gives an organisation insight into

risks and opportunities. The model also assists in streamlining processes, reducing

costs and improving efficiency. On the other hand, Ghuliani points out a critique of

the G4. He states the recent development of the report puts increasing pressure on

companies. Brands now feel that sustainability reporting has become a burdensome
task rather than a strategic review. A framework like this must find the balance of

being an effective tool for business while not being too troublesome for the brand to

complete.

Ethical Consumer Model

Combining ethics and shopping has vastly become a mainstream concept among

brands. The ethical consumer model best illustrates the combination of the two. The

ethical consumer is defined by Adams & Rainsborough as a consumer who shops in

a rational and ethically inflected way by considering the ethical practices in the

domain of consumption (2010, pp. 258). This consumer is shaped by their own

values and beliefs as well as their concern for fairness. The ethical consumer model

re-articulates policies and campaigns to influence ordinary consumers on aspects of

social change (Barnett et al. 2005). Through the promotion and packaging of

consumer products, companies are able to encourage consumers that they are

making ethical shopping decisions, for example Fairtrade. A criticism of this

particular model is outlined by Irwin 2015, which points out that we cannot simply

shop our way to a better world (Irwin, 2015). This model supports the theory that

ethical and sustainable companies and brands would have the larger market share,

however this is not the case. Fast-fashion giants such as H&M and Zara dominate

the market by far in comparison to sustainable brands. In the 2010 Wall Street

Journal article, Karnani laid out the point clearly that brands believe that what is best

for society means sacrificing profits (Karnani, 2010). Adams & Rainsborough believe

that ethical consumption is a growth market. Previously mentioned before, Fairtrade

have tapped into this growing market. In 2007, Fairtrade had a 47% increase on the

previous year (Fairtrade Foundation, 2009). It is vital that everyday consumers are
educated on sustainable practices within the fashion industry to normalize the theory

of ethical consumption.

Closing the Loop

Closing the loop is a circular production model (Lejeune, 2016). It presents

opportunities for collaborations between larger and smaller businesses within the

fashion industry. The circular production concept means that the end product or

garment is entirely recycled then transformed back into fibers enabling the garment

to be recreated. This model of sustainability, immensely reducing the footprint of

traditional fashion models, encourages zero waste. For the TFC industry, this system

intends to keep textile resources, then recovering those materials at the end stage of

the garment in order to create new products (Gunther, 2016). However, closing the

loop does present challenges. Key principles set out by the circular fashion model

include Design with a Purpose and Design for Longevity. Both of these do not sit

at the low-cost culture of fast fashion. Another critique of the model is that products

must be returned by their end users at collection points, which the garments are then

transported to large recycling facilities. Consumers are expected to take their

unwanted clothes to these collection points without economic gain. The point

highlighted here is how willing consumers are to do this. A closed loop system is not

liable for major fashion brands and in conclusion is not enough to develop a more

sustainable fashion industry.

Case Study
Honest By
Launched in January 2012, Honest By is the worlds first 100% transparent company.

Founded by Bruno Pieters, Hugo Bosss former art director, his theory is that the

consumer has all the power when it comes to ethical and sustainable fashion

(Borromeo, 2013). Honest By implements a new model where everything related to

the garment is traceable. From where the materials come from to where it was

made, and even how much staff within the company earn are all disclosed on their

website. Peiters created Honest By after working many years within the luxury

fashion industry. He soon learned that luxury goods at luxury prices were still being

mass-produced in countries such as India and China (Borromeo, 2013). While

working in Southern India, Peiters began to observe how the natives wore clothes

from their own materials growth, woven and sewn locally (Honest By, 2017). He

wondered if such transparency would work in context to a designer or luxury level

on an international scale. Honest By is true to their brand image and is not another

green washed brand.

Honest By are so committed to their mission of sustainability that they offer a

consultancy service to help other businesses develop their own traceable products

(Rineheart, 2012). Another social aspect the brand does well is challenging the

existing fashion mold. Peiters believes that true change can only occur when

students of today are encouraged. The Future Fashion Design Scholarship

sponsored by Honest By awards 10,000 to a student who wishes to develop their

collection with sustainability and transparency as cornerstones (Chua, 2014). The

scholarship requires the student to take on sustainability and find alternatives to

leather, fur and other animal products used in the manufacturing of the garments.
Sustainability is apparent throughout Honest Bys entire supply chain. Suppliers are

investigated to ensure every component in every product has little impact on the

health of the consumer as well as the environment (Rineheart, 2012). Honest Bys

website encloses of total transparency of the processing and production stage. Refer

to Appendix C for a screen shot of the information that shows with purchasing a

garment online.

In the processing and production stage, the social or people aspect of the TBL is in

line with the brands values. Suppliers are vetted to ensure every component in

every product has the smallest impact on our health and the environment (Rineheart,

2012). Honest By ensure that working conditions in production facilities are safe and

workers rights are protected.

The environment -or planet- aspect of the TBL is Honest Bys forte. Refer to

Appendix A for a summary of this. The brand is true to their mission statement of

enabling customers to make the most informed choice when shopping by providing

consumers with every inch of information necessary.

Zara
Zara is the worlds leading destination for fast-fashion consumers. Their success is

largely due to todays Millennials who are demanding, on-trend and value-minded.

Zara have mastered producing adaptations of high-end garments, available to the

public weeks after the designs premier on the catwalks. Zara is the main fashion

brand of parent company Inditex. In 2015, Inditex had an estimated worth of over

$100 billion (Indvik, 2015), well ahead of Nike and major competitor H&M.
In relation to the Triple Bottom Line, Zara was found to have a number of strengths in

the raw material stage of production. Refer to Appendix B for a summary of planet,

people and profit in context to TBL.

Zara have a vertically integrated supply chain, therefore not relying completely on

outside partners. Zara also claim to source their majority of raw materials locally in

Spain (Chettupalli, 2013). Moreover, Inditex promote raw material training for their

key suppliers. Participants are trained on the most common raw materials used by

Zara. They are educated on their environmental, social and economic impacts and

risks (Inditex, 2017). There are also initiatives for the use of more organic fibers to be

used in the raw materials stage of manufacturing. In order to keep wastage to a

minimum, Zara use a program that sheers fabric in a way that there is little to no

excess (Chettupalli, 2013).

The processing and production stage of Zaras supply chain exposes a number of

unsustainable and unethical practices. In 2013, Zara was accused of slave and child

labour in garment factories in Argentina (Osborne, 2013). Factory conditions were

appalling and laborers were made to work sixteen-hour days without breaks. Not

only this, workers, children included, were prevented from leaving the factories

without permission. Furthermore, in relation to the planet aspect of the TBL, Zaras

weaknesses outweigh their strengths. In 2013, Zara was linked to Chinese factories

that sandblasted jeans. The sandblasting process is extremely harmful and is known

to cause lethal pulmonary disease (Emmanuel, 2015). Not only this, in 2012,

Greenpeaces Toxic Threads investigation discovered that 60% of Zara samples

tested positive for NPEs (Emmanuel, 2015). NPEs are cancer-causing amines

released by AZO dyes.

Zaras warehousing, transportation and distribution centers present a number of

strengths and weaknesses in regards to the TBL. The profit aspect of the TBL shows

strength in that Zaras demand is production based resulting in little inventory in their

supply chain (Pokharel, 2013). This then translates to a lower working capital for the

business. Zara own and operate eleven factories in Spain. Every garment

manufactured is sent to these factories to be inspected before distribution (Berfeild,

2013). This could be seen as a strength from the businesses point of view, or a

weakness from an environmental perspective. Garments are transported from all

over the world to be inspected in Spain, and then distributed globally. A massive

amount of C02 emissions are released into the earths atmosphere. In terms of

Zaras logistical activities, most inbound logistics are road haulage and garments

manufactured in Asia are transported via plane (Idiji, 2012). Finally, due to the limited

runs and the large variety of styles Zara offer, garments are distributed in small

batches meaning transportation is more frequent, contributing again to their already

large carbon footprint.

Areas of improvement lay within the distribution and transportation, as well as the

production and processing aspects of Zaras supply chain. More environmental and

ethical practices