Fashion: The consequences of a non-sustainable business model on the value chain

The growing delocalisation of production during the last 20 years has had several consequences on the value chain in the fashion field.

It is to be noted that the textile and fashion industry is characterized by a long and complex supply chain in comparison to other fields. The production of the fibres used for textiles starts from an agricultural and petrochemical production, followed by transformation, manufacturing, logistics and retail.

When speaking about the value chain and its impact on the Triple Bottom Line (People, Planet, Profit) we must take into consideration each and every step.

From the environmental point of view water, materials and energy are the main resources to observe. But even if most environmental impacts concern the countries interested by the manufacturing process, the textile waste issue is global. If analysed from the point of view of the TBL the repercussions can be categorized as follows.

Repercussions on People.

Producing in countries where the cost of production is lower means indirectly exploiting the workforcein locations where labour laws do not provide that much legal support.

Therefore, the cost of production is as low as the quality of working conditions.

If this new business model is representing a source of income for many workers with no better option available, on the other hand it fuels a business model that prioritises the speed and to cost of production over the social condition of the workers.

The consequences are not only related to the working hours and the wages but also to theenvironmental and safety conditions inside and outside the production buildings.

Repercussions on the Planet.

From the quality of the materials employed in the production, to the recourse to coal-based energy and non-sustainable use of water and disposal of production waste, there are many environmental side-effects connected to the delocalisation of production without an adequate follow up on the value chain and traceability.

The consequences of a non-sustainable business model affect also the end-life of products; without a circular economy, there is a vast recourse to landfills and incinerations, with the additional chance for the unsold stocks to be sold to developing countries where the practices regarding the recycling of garments are non-existent.

Therefore, items are condemned to become a source of further pollution due to malpractices in the disposal process.

Repercussions on the Profit.

Not knowing all aspects of the value chain also means to lose track of the economic and financial system connected to it. The fact that a business model is profitable from one point of view does not make it good for all of the stakeholders involved. Starting with the workers, whose benefits are mostly non-existent, to the structure of the legislative system that in many cases does not grant a social security insurance or an adequate protection of workers in terms of rights, safety and health.

This means that backing a non-virtuous production cycle by means of a non-conscious purchase may end up financing practices that can affect all areas of the Triple Bottom Line.

Following this line of reasoning, we have also to consider the financial consequences of the exposure of brandswhen facing scandals of any kind and needing therefore to cope with a loss of trust by customers (to be translated in a decrease of sales), law suits, exposures performed by media with consequences on the brand’s image, etc.

Moreover, to be noted, changing a malfunctioning production process into a virtuous one is more expensive than constantly investing in sustainability throughout brand’s life.

Therefore non-sustainable business models may not be profitable in the long term.

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