Summary

• The fashion industry contributes significantly to sustainability challenges, with high carbon emissions and widespread greenwashing practices.
• Increased regulations are pushing retailers to adopt genuine sustainability practices, requiring tangible changes and transparency throughout the value chain.
• Retailers should invest in sustainable materials, enhance transparency, and utilize technology to substantiate sustainability claims and build consumer trust.
• Understanding material selection and utilizing data-driven insights can help retailers identify opportunities to implement eco-friendly solutions and drive positive change in the industry.

Introduction

With heightened environmental regulations looming, how can retailers achieve the sustainability goals that lie ahead of them? 

Fashion is one of the most unsustainable industries in the world, accounting for ~3-5% of global carbon emissions, with material production itself contributing ~25-40% of the industry’s CO2 emissions.[1]  

These stats are not new, nor is the rise in companies saying they are focusing on “sustainability” or implementing “sustainable practices.” 

However, many of these communication efforts are simply greenwashing.  

What Is Greenwashing?

Greenwashing refers to, “deceptive marketing tactics that are used by companies to give the impression that their products or practices are environmentally friendly when, in reality, they may be harmful to the environment.”[2]

These “tactics” may take the form of unsubstantiated claims without any data to back them up, or vague language, such as “eco-friendly,” “good for the planet,” or “sustainable.” 

A recent European Commission study revealed that more than half of green claims by companies in the EU were vague or misleading, and ~40% were completely unsubstantiated.[3] 

Not only is greenwashing detrimental to driving substantial change in the fashion industry, but it also negatively impacts consumer trust and brand reputation. In an era of heightened consumer awareness, customers are not going to pay for this blanket statement of sustainability.  

Increased Regulations for Truly Sustainable Retail

Simply saying you are sustainable is not enough, and regulators are taking steps to ensure brands are held accountable. 

To drive true sustainability, brands must do more to make tangible, meaningful changes and increase transparency in their processes.  

These regulations will impact companies and consumers globally, spanning the entire fashion value chain from product design to marketing. Some examples include: 

• As many as 16 pieces of legislation relating to fashion and textiles were under discussion in late 2023 in the EU alone, with the first coming into force in 2024.[4]
• The New York Fashion Sustainability and Social Accountability Act in the United States plans to hold major brands accountable for ESG impacts and supply-chain traceability.[4]

What Should Brands and Retailers Do?

With marketing claims under tight scrutiny, retailers should improve their use of sustainable materials and focus on transparency and building trust. 

The fashion industry has begun making this change by accelerating investment in material alternatives that are more sustainable than traditional ones, both through textile innovation and recycling.[1] 

Brands that want to stay ahead need to better understand where and how to incorporate sustainable materials as well as how to talk about them. 

Utilizing Technology

McKinsey points out that, as regulators increase requirements for backing up sustainability claims, retailers need to understand their own supply chains and operations. To do this, McKinsey advises that brands, “invest in research and data intelligence to gather robust,  verified evidence to substantiate and credibly support sustainability claims.”[1]

By understanding the production of materials and operations, companies can make better choices and be more transparent in communicating exactly how they are implementing sustainable practices. 

Using better materials and making accurate claims that their customers can trust allows brands to create better practices for the planet. 

Retailers can build trust by:

• • Creating accurate product descriptions and hang tags that are not greenwashed 
  • Providing proof of their initiatives and being specific about the materials they choose and the collection process 
  • Developing a communications plan that’s personalized to the end consumer and puts real data behind the actions of the campaign
  • Educating consumers to help them feel they are a part of something meaningful 

Understanding Material Selection

Retailers need to prioritize the fundamental aspects of sustainability, including material selection. By using a retail intelligence platform, teams can identify market penetration for sustainable fibers and use this data to collect information on different materials, including where they are being used, who is using them, and how usage is changing over time.  

What Does the Data Show?

Using EDITED’s data, we can see that products described using sustainable keywords equal 34% of ranges, up from 28% in 2023. 82% of these materials are related to fabric choices, with the majority containing recycled polyester. Virgin polyester continues to dominate assortments, with recycled alternatives accounting for less than 25% of tops, handbags, and dresses.

Retailers are primarily investing in responsible textiles (82%) and certifications from a third-party company (9%) to help build consumers’ trust in brands. 

This data-driven approach enables retailers to visualize material use across assortments to understand where opportunities exist to explore more eco-friendly solutions.   

Conclusion 

The urgency of sustainability in the fashion industry cannot be overstated. With environmental regulations tightening and consumer awareness on the rise, retailers must embrace authentic sustainability practices. Greenwashing is no longer an option; consumers, stakeholders, and regulators demand transparency, accountability, and tangible action. 

With data from a retail intelligence platform, retailers can gain valuable insights into market trends, consumer preferences, and the adoption of sustainable materials to identify opportunities for incorporating real eco-friendly solutions into their strategy and how to talk about it.  

By embracing innovation and transparency, retailers can position themselves as leaders in the industry, driving positive change and shaping a more sustainable future for fashion.

Read more in our sustainability report here.  

Sources: 

1. https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2023/the-state-of-fashion-2023-holding-onto-growth-as-global-clouds-gathers-vf.pdf
2. https://onetreeplanted.org/pages/greenwashing?gad_source=1&gclid=Cj0KCQjwn7mwBhCiARIsAGoxjaKoXkxne2oesRPAdxJKnArHY7QOKpvs2uUnS-R_Cixu2B6BLXnEFG8aAi2AEALw_wcB 
3. https://www.businessoffashion.com/opinions/sustainability/why-big-brands-are-pushing-back-against-sustainability-regulations/
4. https://www.businessoffashion.com/articles/sustainability/the-state-of-fashion-2024-report-sustainability-regulations-eu-fashion-value-chain/