The Venice Sustainable Fashion Forum (VSFF) 2022, which was held on 27 and 28 October at the Giorgio Cini Foundation (San Giorgio Island, Venice), was actively attended by institutions, brands, supply chain professionals, industry and business representatives and NGOs.

The main goal of the Forum, of which this was the first edition, is to accelerate a sustainable transition path in a sector that suffers from a lack of data and standardised measurement tools. These are increasingly crucial for the survival of companies and for accessing the funds and investments earmarked for innovation and sustainability projects. As emerged during the first day of the summit: you can only improve what you can first identify and measure.

Europe has set itself the ambitious goal of becoming the first carbon-neutral continent by 2050 and has drawn up a roadmap of measures with milestones in between. For example, a 55 per cent reduction in greenhouse gas emissions (compared to 1990 levels) by 2030, an increase in the share of renewables in the energy mix to 40 per cent, and an energy efficiency target of 36 per cent.

As part of the Green Deal, which includes investments of €1 trillion over the next 10 years for the ecological transition, the European Community adopted an Action Plan for the Circular Economy in March 2020. The plan focuses on resource-intensive sectors, including the fashion industry, and points to the concept of circularity as the basis for achieving the EU goal of climate neutrality by 2050.

But what and to whom are the necessary steps to be taken to achieve this? During the two-day VSFF, an attempt was made to find answers so that all actors in the supply chain and those who exert pressure on the system have common points from which to encourage the green transition.

During the day on 27 October organised by Confindustria Venezia Area Metropolitana di Venezia e Rovigo and The European House – Ambrosetti, with the sponsorship of Assocalzaturifici, the results of a sustainability assessment conducted on companies in the Italian fashion supply chain were provided for the first time. The title of the work was “Just Fashion Transition", coordinated by Carlo Cici – Partner and Head of Sustainability at Ambrosetti, and allowed for a more detailed investigation of the environmental and social impacts of the fashion system.

The study focuses on the challenges and opportunities of the sustainable transition in the fashion sector and outlines six recommendations, which we will see below, addressed to institutions and key players in the supply chain to promote a transition that is not only sustainable but also fair, equitable and capable of balancing the interests and expectations of the various stakeholders without leaving anyone behind (more on this in the box).

According to Ambrosetti's research, there are large discrepancies in the various estimates of companies' sustainability parameters, and this is due to the lack of standardised data and measurement tools. For example, carbon emissions in the fashion sector show a deviation of up to 310% between the different sources considered for the study; similarly, estimates of annual freshwater withdrawals by companies show variations of up to 172% from each other and up to 429% from data on water use for jeans production. Against this backdrop of inconsistent measurements, on which political and business leaders are then called upon to make fundamental decisions on a daily basis, however, emerges the obligation for around 1,000 European companies in the fashion and luxury sectors to make their quantitative sustainability performance public annually from the fiscal year 2023 or 2024 at the latest, according to the standards introduced by the new European directives.

Italy, in particular, ranks first in Europe in terms of the number of companies affected by this deadline, almost 300, followed by France with more than 130 and Germany with 110, while all other EU countries have an average of around 25 companies affected. Numbers that certify that the sustainable transition is a strategic issue for the national fashion industry, which has the duty and burden to be at the centre of the global debate in the sector and point the way to reducing the environmental, social, and economic impacts generated by this industry.

"It is well known to those in the industry how the transition towards sustainability is very complex," explains Flavio Sciuccati, Head of the Fashion & Luxury division of The European House – Ambrosetti. "Some peculiar factors characterise the sector: the strong segmentation ranging from high-end luxury to the lower segments of 'mass market' andfast fashion'; the brevity of the product life cycle and the continuous renewal of collections; the choices of 'globalisation' and the search for 'low cost' that have led to mass delocalisation and the exasperated fragmentation of the supply chains of all products in very often unsustainable conditions". All this, adds Sciuccati, 'in a regulatory framework and rules that are still being defined and that risk penalising the very companies that have always represented the true reservoir of innovation and creation of most of the sector's products'.

A major key theme emerged that involves everyone and that is that of responsibility, which is declined in different ways between the producer, the consumer, and the legislator. This was the topic discussed during the second day, October 28th, entitled “The Values of Fashion”, organised by Camera Nazionale della Moda Italiana and Sistema Moda Italia (SMI). Therefore, it is the responsibility of the institutions to provide clear rules defining standard criteria to identify sustainable companies, and consequently these must be rewarded with targeted investments and support. "Sustainability has a cost, but it does not have to come at the cost of complexity," said Maria Teresa Pisani – Acting Head, Sustainable Trade and Outreach Unit, United Nations Economic Commission for Europe. On the other hand, it is the responsibility of companies and stakeholders throughout the supply chain to find ways to unlock and foster circularity and sustainability, which have become real elements of market competitiveness. 

Lastly, there is the responsibility of consumers who must be given all the information they need to make informed purchases. Customers must know what they are buying in order to exercise their freedom of choice. Therefore, success will depend on a multi-handed effort that includes companies, the entire supply chain and end consumers. This opens other important issues, that of communication, collaboration and traceability. The choice of raw materials that limit the environmental impact at all stages of production, technology as an accelerator of sustainability, used through digital passports to inform the players in the supply chain but also customers on the ethical and sustainable credentials of products, the quality of Made in Italy not only as an aesthetic expression, but as a founding element of the longevity of goods and their circularity. Emerging circular economy models today represent only 3.5% of the global fashion market.

During the second day of the event, eight keywords were proposed that correspond to as many valuable themes aimed at outlining the framework of change that Italian fashion is focusing on to identify new virtuous paths that aim to achieve sustainability in the sector. Harmonise, i.e. to harmonise new common ways of interpreting sustainability; Educate, to educate all players in the supply chain to drive change; Think, to change state of mind and act in an all-round sustainable manner; Measure, to enable the continuous improvement of performance through standardised measurement systems; ReMake, to aim for the circular economy; Create, to create by already thinking about the future life of products; Make, to act by considering the essential role of collaboration within the supply chain; Make (It happen), to manage change through technology and sustainable innovation.

Following these guidelines, companies will witness the transformation of activities and the value chain through the implementation of best practices and the supply chain will become a protagonist on what has been done so far and what is being done for the evolution of a sector so central to the industry globally.

JUST FASHION TRANSITION

STUDY BY THE EUROPEAN HOUSE – AMBROSETTI ON THE FASHION SUPPLY CHAIN

The study measured the economic and financial performance of 2,700 companies in the supply chain, assessed the sustainability of 167 companies in the Italian supply chain and analysed the sustainability management tools of the 100 largest European companies.

There is no doubt that fashion causes significant impacts on the environment, but this cannot be said based on the data available today at a global level. Estimates of earth's climate-altering emissions generated by the industry range from 2 to 8.1 per cent of global emissions, a figure up to four times higher. On the social front, the estimated number of workers in the sector globally ranges between 60 and 75 million, most of whom live in developing countries where inequality, child labour, exploitation and unhealthy or hazardous working conditions are most prevalent. The purpose is to standardise the measurement of sustainability of companies and products and to increase the level of transparency of brands. The new European sustainability regulations will primarily impact brands and, subsequently, the entire supply chain. Without a sustainable supply chain, there can be no sustainable brands.

Furthermore, The European House – Ambrosetti's survey of 167 companies in the Italian fashion supply chain reveals that the adoption of instruments for managing sustainability, monitoring, the presence of specialised figures, and getting certifications only occurs when a company grows.

In this regard, the study proposes six useful recommendations to accompany the sector towards the goal of sustainability: the early adoption of tools capable of providing feedback, defining a roadmap capable of supporting the industry on the path to sustainability, agreeing on alliances between the players in the supply chain, creating a database and a permanent observatory of data, promoting and sharing a sustainable culture externally through dissemination actions, promoting luxury companies in Italy and France, not only as a symbol of quality but as the vanguard of sustainability. It emerges the need to reinvest fixed shares of brand margins to favour the scalability of circular business models and the sharing of best practices in the sector.

From here you can access the link where you can download the complete Just Fashion Transition study.