Sustainable Fashion’s New KPIs Push the Envelope on Eco

Like financial metrics, measuring sustainability is a non-negotiable, yet many fashion companies are still just getting started, lacking ambition or consistent metrics across the industry.

Today, with the urgency well upon the industry to act, there’s a greater focus on the current critical KPIs and making even quicker progress on them.

“This is a turn-around decade for our planet, so sustainability KPIs need to be more ambitious than they were five years ago,” said Nicole Rycroft, founder and executive director at Canopy, a forestry conservation nonprofit. “Luckily, many brands and designers are indeed setting more ambitious climate and biodiversity targets.”

Supply chains, she said, must change in a matter of months and years — not decades.

Go Big or Forfeit Home (Planet Earth) 

For one, companies are going bigger than before on biodiversity targets.

Brands may need to get more political, as KPIs for biodiversity (especially forestry conservation) include political engagement, advocacy or investment in new carbon credit projects, as well as regenerative agriculture programs.

More than 320 brands, retailers and designers — representing more than $587 billion in annual revenue — have signed on to the CanopyStyle fashion commitment including Amazon, Target, Uniqlo and Burberry to align with ambitious biodiversity targets that follow the latest science.

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“Scientists are clear that we need to conserve 30 to 50 percent of our forests by 2030 if we are to stabilize our climate and halt the precipitous decline in biodiversity,” Rycroft said. “To achieve these levels of conservation we need to log 50 percent less forests to make packaging and viscose and stop clearing forests to grow cotton or raise cattle for leather.”

With ancient and endangered forests (those high in carbon and biodiversity) in dire straits, conservation is the “fastest, most cost-effective way to stabilize our climate,” according to Rycroft.

“Forests represent 30 percent of the climate solution and are habitat for 80 percent of the world’s terrestrial species,” she said. “Conserving the world’s ancient and endangered forests is key to planetary health and halting future pandemics (and the ensuing social and economic disruption).”

With the majority of a brands’ impact residing in Scope 3 (indirect operations), raw material sourcing is a major zone for “explicit and ambitious targets,” Rycroft said. “We’re starting to work with brands and producers to develop KPIs such as ‘reduce their raw material sourcing by 50 percent by 2026 with prioritization of materials/products with the highest-carbon and biodiversity footprint.’” Milestones can include smart design of boxes that cut packaging by 85 percent by 2025, or so, or the introduction of new business models like lease, rental, repair and secondhand sales that reduce units produced by a certain percentage, she explained.

Over the past six years, progress has been earnest with 90 percent of global viscose producers modeling commitments akin to CanopyStyle and more than half of the global viscose supply chain having shifted out of critical forests.

Making Circularity Happen Faster 

To accelerate circularity, next-generation solutions and new business models are a source of hope but not a solution in itself.

“A KPI in this area of sustainability includes ’50 percent of materials used are made from next-gen fibers and processes by 2030,’” said Rycroft, who defines next-generation solutions as the designs, systems and technologies in line with guidelines set by Nature Needs Half, an international coalition of scientists, conservationists, nonprofits and public officials trying to downsize resource use. The guideline essentially is a take-half and save-half, asking that 50 percent of the planet be conserved for nature. 

Milestones include money invested, strategic partnerships and commitments to alternative feedstocks, such as old textiles or microbial cellulose.

As for resale, metrics still vary widely depending on the company.

Working with New York University’s Center for Sustainable Business, Reformation was one company that spoke candidly on its resale partnership with ThredUp last December relying on metrics around customer acquisition. Meanwhile, veteran resellers like eBay are going a more tried-and-true route, not unlike companies counting off the plastic water bottles diverted from oceans.

“I think what’s interesting, too, being on eBay is we sell everything, so we can’t necessarily get that specific about a KPI that would apply to all the different types of products,” said eBay chief sustainability officer Renee Morin. “Typically, we’ve relied on avoided carbon emissions through the lifecycle of that product because its resold, how many emissions are avoided because it’s used more than once. That tends to be one [metric] we can track pretty easily.”

Academia is still grappling with these metrics of circularity, however, because of one glaringly obvious reason.

“As an academic, that one is a little tough because any time you want to propose a new metric you have to defend it against thousands of other people in the world who might see it differently,” said Dr. Jennifer Russell, a professor of sustainable biomaterials and circularity at Virginia Tech. “With the research that I did with the United Nations Environment Program, we introduced new metrics that talked about what was avoided — so material avoided, carbon emissions that were avoided — trying to recognize that every time you have to get something new, there’s a much higher broad range of total costs including the environmental ones.”

The challenge in any new metric, she said, is simplifying it to the masses or communicating the benefits without a point of comparison. What is circular without new products?

“It’s not that circular products don’t have impact, it’s just that because we’re so eager to find a solution, some way of chipping away at these massive problems like climate change, we are trying to frame them as a positive… it’s not that there’s only benefits,” Russell said. “Re-manufacturing has a huge electricity and emissions costs, but it’s relatively less than making a new one, so we talk about the difference. I think that that’s something that can maybe make someone a bit distrustful about the messaging they’re hearing about circular economy because we’re not talking about the absolute impacts of repair — but we’re talking about why repair is better than new.”

Russell said companies should prioritize the holistic lenses of sustainability and “stop looking for a single data point to make decisions on.”

Exec Pay Linked Back to ESG 

Executive compensation linked to environmental, social and corporate governance factors is also gaining ground as a KPI for fashion sustainability.

In March, companies like Nike and Chipotle garnered attention for linking executive pay to ESG factors. For the first time, Nike will be linking executive compensation to progress in “deepening diversity and inclusion, protecting the planet and advancing ethical manufacturing,” a press statement noted.

Meanwhile, members of Parliament similarly drilled Boohoo on the suggestion to do the same.

Kering is another proponent of a monetary “metrics approach.”

“You give monetary value to your internal impacts; you are not speaking about a liter of water, tons of CO2, but you will give monetary value to be sure that you take into account all of the negative externalities,” said Marie-Claire Daveu, chief sustainability and institutional affairs officer at Kering during a press event held by The Fifth Avenue Association on Tuesday, noting that the former measurements are too “technical” and limited.

For Kering, the open-sourced environmental profit-and-loss tool guides not only its own business operations but that of 200 other companies, per Daveu’s latest assessment. Kering internalizes the equivalent of about 70 euros per ton of carbon.

Twinning DEI and ESG for the Win  

Diversity, equity and inclusion metrics are being refined by the sustainability set.

Human resources firms are starting to link up with sustainability firms to drive greater impact across DEI initiatives. ESG credit ranking nonprofit Just Capital recently unveiled its Corporate Racial Equity Tracker giving greater transparency for companies across six dimensions of racial equity including pay equity, anti-discrimination policies and community investments.

With racial equity plans aligned with financial and sustainability plans, “we reduce the risk of racial equity being seen as a “charity cause” and instead re-emphasize addressing social injustice as a key leverage for opportunity and economic growth,” said Shereen Daniels, founder and managing director of HR Rewired, a firm that recently partnered with sustainability consulting firm Enzo Advisors, LLC.

Despite strides in promoting the use of quantitative metrics, some experts enthuse qualitative data is a long-neglected gap.

“I think we’re still lacking a lot of the first-person account. It’s easy for those that have always had the power to continue to hold the power,” said Michelle Gabriel, an educator at Glasgow Caledonian University in New York.

By September, Gabriel hopes to unveil findings of her research project aimed at collecting the lived experiences of individuals who identify as Black, Indigenous, and people of color or LGBTQIA+ within fashion, to serve as a metric for how sustainable the industry is on a human level.

She is gathering intel from consumers, headquarter employees, supply chain staff, subcontractors, farm workers creating the fibers and retail workers among them.

With one in four jobs in America in retail, job losses fell heavily on store associates racking up a 373,000-job deficit as of January, as per figures from the Labor Department. “Retail is proportionally the most diverse, [yet is] always unconsidered in decision-making,” claimed Gabriel, calling retail workers “invisible participants.”

Following the recent anniversary of the Rana Plaza collapse, Gabriel believes not much will change unless lived experience becomes a pillar of public sustainability reports.

For More, See:

Fashion’s Sustainability Landscape: Who’s Investing in What?

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