Cheap fashion is an environmental disaster; luxury fashion is sustainable? Think again.
It was a seemingly innocuous line in Burberry’s 200-page annual report. As well as bringing in more than 2.7 billion GBP in annual revenue in 2019, a series of notes towards the end of the document revealed that the luxury British fashion house had destroyed unsold products worth 28.6 million GBP. It later confirmed that they had been burned.
When an eagle-eyed observer spotted the revelation, the condemnation was swift. This was a brazen and ecologically reckless “bonfire of vanity”, according to one newspaper columnist. There were calls for a boycott, and demands in the UK parliament that such waste be outlawed.
It quickly emerged that burning good stock was a widespread industry practice to stop surplus being sold too cheaply, diluting valuable brands. The debate widened. We know that “fast fashion” and T-shirts that cost less than a cup of coffee are an environmental disaster. Now attention is increasingly turning to sustainability at the luxury end of the market.
“Change is happening but not fast enough,” says David Ravel, a wealth manager at LGT Vestra based in London and the founder of the "Sustainable Textiles Alliance". Ravel, whose father and grandfather were in textiles, joined LGT Vestra in 2016, and saw potential in using the power of investors to guide clients in positive directions.
He founded the alliance in 2017 and works with designers and companies including Lenzing, the multinational fibre manufacturer, which makes cellulose, a recyclable natural component derived from wood. Ravel says luxury fashion, including couture, poses unique as well as common threats to sustainability.
Brand protection is only one of these threats, in an industry that must predict demands for stock, while working according to strict seasons and constantly focussing on what’s next. “Often a pattern is recognisable so can’t be given away to be reused, hence the old-fashioned method of burning,” Ravel adds.
More broadly, there is a misconception that designer brands have, by default, high-end ethics. “People think, ‘OK, you’re fast fashion, you’re bad, and you’re luxury so that means quality’,” says Professor Rebecca Earley, a design researcher at University of the Arts London, and co-director of the Centre for Circular Design at Chelsea College of Arts. “But often if you look closely at the supply chain it’s still full of problems and impacts.”
In one sense, a degree of sustainability is sewn into couture and designer fashion; quality materials and manufacturing are made to last. “But you look at the portfolio below that level and even luxury brands have everything from caps to T-shirts and almost tourist products,” Earley says. “They’re still being produced in ‘fast’ conditions and have the same impact.”
Luxury brands often also use the same suppliers, factories and contractors as high street brands, with all the same knock-on effects in terms of working conditions and the environment; for example, when it comes to water-intensive cotton farming in nations with extreme water shortages.
There is often little incentive to do better. “Linear production with virgin materials is optimised and profitable, and the fashion business is built on that model,” Earley adds. “Lots of research and innovation agencies develop visions, and brands say, ‘yeah, that’s interesting, but we’ve made so much money, so why would we stop?’”
Yet even Earley says there is positive movement. Pressure to change is growing perhaps most significantly among consumers as all industries face a new reckoning in the age of the climate crisis, plastics pollution and the advocacy of big names such as Greta Thunberg.
“This younger generation is coming through – the children of wealthy families – and they are really demanding to know how sustainable everything is,” Ravel says. “‘Is this fur real? Why are you using cashmere here?’ We’re definitely seeing a change.”
Ravel thinks this partly explains the rise of designer peer-to-peer rental companies such as HURR, Cocoon and Rotaro at the top end of the market, as well as Depop, which now has more than 15 million users worldwide reusing clothing that might otherwise be thrown away.
It’s also becoming easier and more socially acceptable in designer fashion to source and sell – and wear – more sustainable materials. Yak wool, for example, has for some time grown as an alternative to cashmere, which comes from goats that can have intense demands on fragile ecosystems.
Christopher Raeburn was a pioneer of high-end sustainable fashion long before it was cool. For more than 15 years, he has applied a designer aesthetic and quality in manufacturing to his “remade” ethos, reusing existing materials.
“When I first started, the narrative and vocabulary wasn’t there around responsible design,” the London designer says. “Now it’s front and centre of a lot of corporate strategies. That’s an amazing evolution in a relatively short time.”
Companies such as Lenzing are racing to develop fibres and processes that challenge that default business model of virgin materials and waste. Prices are dropping. Ten years ago, Raeburn had to pay 50% more for recycled fabrics and materials. “Now it’s the same more often than not,” he adds.
Raeburn says there is still much to do – more doing as well as talking – and a need for a greater focus on circularity. “It’s not just about making things from recycled material, but also making them recyclable,” he explains.
Ravel says supply chains must mature so that competitors pool resources and trade existing materials rather than mothballing or destroying unused fabric, for example, even before it enters a production line.
As the Burberry case shows, scrutiny and transparency are often required to make companies change course. Earley has some confidence in various indexes that certify brands based on their commitment to ethics and transparency. Legislation has been slower to materialise, although France passed a law earlier this year prohibiting the destruction of unsold stock, among other measures.
Burberry, meanwhile, did not simply ride out the scandal. It promised to stop destroying unsold stock, saying it would reuse, repair, donate or recycle it instead. “Modern luxury means being socially and environmentally responsible,” said Marco Gobbetti, the label’s CEO, who hoped others would make the same change.
Notably, it wasn’t just a public outcry that drove Burberry’s promise to do better; the company’s shareholders were among those who expressed shock about the stock fires, and what it symbolised in the high-stakes world of high fashion. After all, when change needs to happen quickly, nothing talks faster than money.
Waste of resources in the name of fashion is not the only environmental problem the world is currently struggling with. If we do not manage to massively reduce our CO2 emissions in the coming years, experts expect serious consequences for humankind. LGT is convinced that everyone must fulfill their social and corporate responsibility and make a contribution to a livable future. Banks and financial service providers can do this by actively working to ensure that capital no longer flows into organizations or companies that damage the environment. For example, LGT has excluded companies involved in the mining of coal from its investment universe.