Fashion Briefing: The European Fashion Alliance is seizing control of local sustainability policies

Made up of 28 European organizations including the organizers of 11 fashion weeks and the official Italian and French fashion bodies of Camera Nazionale Della Moda Italiana and Fédération Française du Prêt à Porter Féminin, respectively, the EFA’s main directive is to help the small and medium enterprises that make up 99% of the local fashion industry to prepare for European sustainability legislation. This legislation includes the Greenwashing Directive, already in place, as well as extended producer responsibility and the European Corporate Sustainability Directive, among other new regulations. 

Because of its participants, it’s set to be an influential agency, particularly as Europe is regarded as a global sustainability policy leader ahead of the U.S.

The conference highlighted findings from the organization’s report set to come out in the next couple of weeks about the state of fashion and sustainability in Europe. It was also the place to hear from luxury and fashion heavyweights like LVMH and Chanel, as well as the European industry fashion bodies, about the state sustainability and related challenges. One of the key focuses was SMEs, including how they’ll be impacted by the sustainability legislation and informed of its updates. 

EFA’s report findings

The report showed that the most sustainability investment right now from the brand side is going into product quality and durability, ahead of packaging and material innovation. Less than 50% of respondents to a survey informing the report said they use recycled materials in their products, and only about 50% said they publicly disclose their sustainability efforts. The survey respondents work at fashion brands and businesses across Europe. With Europe housing most large fashion brands, this may explain why material innovators are struggling. Just last week, Swedish textile-to-textile recycler Renewcell went bankrupt.

“Consumer circular solutions should be the very last solution to be put in place,” said Federico Brugnoli, the founder of Milanese sustainability consultancy Spin360 and a speaker at the conference. Brugnoli said Renewcell’s lack of post-consumer materials signaled that brands were unwilling to engage in its business model.

Crucially, for most SME brands, there are financial and human resource challenges to receiving adequate sustainability training, according to the report and the conference conversations. Many of the businesses have taken on consultants, but it is not always an effective path for them considering the amount of pending regulation and the related complexities.

“We have tons of consultant companies calling us and saying we can guide you in this new regulation,” said designer Henrik Vibskov, who shows at Copenhagen Fashion Week. “You have to sign up, or you’re doomed, they seem to say. It’s confusing.”

It was announced in January that the E.U is setting up a consumer products envoy to answer questions about the sustainability regulation requirements. “We also aim to simplify things like the reporting obligation,” said E.U policy coordinator Ruth Reichstein.

Other responses from the survey shed light on how brands are thinking about excess inventory. Off-price is still the major way that brands manage unsold stock. Forty-seven percent of respondents manage their unsold goods through sales, rather than upcycling and resale. According to the Business of Fashion insights, LVMH held $3.5 billion in unsold inventory last year, while Kering held $1.6 billion. 

LVMH is also facing issues related to returns, as reported by Glossy in January, as the luxury sector looks for ways to offload its products without destroying them. Destruction of goods was banned in France as of February last year, and the rest of Europe is set to adopt this law, as well, although exact dates have not been announced.

Artisan preservation

In terms of social responsibility, 65% of survey respondents said they’re prioritizing craft and skills preservation above living wages, according to the report. 

The challenge with the luxury sector is that, to focus more on sustainable production, brands need to rely more on local artisans. However, those communities are dwindling because the profession has largely been underpaid. This accelerated when luxury brands moved elements of their production to China. 

“In the case of artisans, don’t just buy them and bring them into your own big company,” said Paolo Naldini, director of Italian cultural institution Cittadellarte. “That sounds very sensible to a financial officer — making a cost reduction to control it better. You will kill it, at the end of the day, and that is bad for you in the long run. Instead, become a promoter or cultivator, helping with visibility and helping them become even more recognized, even in their own territory.”  

For luxury brands like Chanel, a focus on artisan techniques may be an opportunity, especially with the new storytelling opportunities offered through digital product passports.

“The question that drives us is, ‘How can you ensure that sustainability is simple, but not simplistic?,’” said Guy Morgan, global sustainability director at Chanel. “When you think about the holistic sustainability of different product categories, it’s really complicated. You can’t boil it down to just the environmental side of things.”

“When you think about all the savoir-faire, the artisans, … they are the heartbeat of our sector,” said Morgan. He said there are thousands of SMEs in Chanel’s supply chain alone. “They need to be taken into consideration when we think about the sustainability performance of different product categories, too.”

Technology is a key driver of sustainability 

Sixty-three percent of survey respondents said sustainability is the main driver of tech adoption, over efficiency and cost reductions. However, only 44% of respondents said they know what a digital product passport is, despite the expectation that all brands selling in the E.U. will be required to include product passports on each of their items by 2026. Sixty-one percent of respondents said they’re interested in new business models like blockchain, web3, NFTs and the metaverse, but only 18% said they’re interested in using AI for design purposes and within the client experience. 

LVMH, which has led the way in establishing sustainablility-related technology alliances, has established partnerships with the likes of Fairly Made, the Aura Blockchain Consortium, Weturn and Save Your Wardrobe. Many of these technology companies have come out of LVMH’s “La Maison de Startups,” which funds and supports emerging tech businesses.

LVMH is also incorporating design technologies into its day-to-day. “With [digital design tool] Clo3D, we are training our designers to use [new] tools and software,” said Alexandre Capelli, head of sustainability at LVMH . “It is quite powerful, in terms of sustainability, because it helps our teams to save resources and reduce the number of samples. We also started using Browzwear 2 years ago.” Browzwear is another design program used to design clothing digitally.

In addition, Capelli said, “Data harmonization is important right now. We’re [being asked] for more figures, more data — and some brands use one type of software, others use another one. The question is: How can we develop the right and most efficient data models where we can consolidate and classify all the figures that are needed for DPPs and other reasons, and then share the data?”

Collecting and analyzing data is still a process that is underway for many of the luxury brands and organizations that were present at the conference. 

“We are in the knowledge economy,” said Pascal Morand, executive president of the Fédération Française de la Couture. “Sustainability is data and, conversely, those databases at any level need to go further, in terms of granularity and recognizing differences of quality and geographic locations. We need to collect information, but then we need to see which information we do collect, what we choose to highlight and how we communicate this information.”

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