Georgina Laird, Sustainable Investment Analyst at Aegon Asset Management, discusses the increasing demand for sustainable fashion and anticipates a loss of business for companies ignoring ESG.
“It’s never been cheaper to be fashionable, but the problem is items don’t stay fashionable for very long, and social media influencers encourage a ‘wear it once’ culture.
“Fast fashion is cheap for a reason – it relies on the use of cheap synthetic materials that have profound negative impacts on the environment and low paid, mistreated workers. But research tells us that consumers are increasingly willing to pay more for sustainable goods.
“We believe consumers are becoming more aware of what sustainable indicators to look for when they are shopping – a focus on ESG in the production process, good labour practices in their supply chain, a circular model that considers the end-of-life stage of garments.
“Today, more and more brands are launching sustainability initiatives, but there remains a stark gap between the leaders and laggards. There is a lot of work yet to be done across the industry, including increased investment in new technologies that help to mitigate the harmful processes in production, and that allow products to be effectively recycled at the end-of-life stage.
“In addition, regulatory engagement will be necessary to encourage a more circular model across the industry. Companies that don’t think about sustainability today are likely to lose out if they cannot keep up with this sustainable trend. Stronger disclosures around the ‘what’ they are making, and ‘how’ it was made are not just welcomed, they will be necessary to succeed.”