THE SUSTAINABILITY SERIES

Article 2 of 5

In the last article I discussed the challenges faced by organizations in adopting the Sustainable Development approach. I felt that it is important to dive deeper and understand the challenge of different lens stakeholders have for Sustainability as this is where things go wrong, even if the Top management is in the driving seat.

Let’s first understand why the challenge exists?

I think we will all agree that all the successful organizations have few things in common, focused and relevant top management, a well-knit strategy and most importantly an aligned stakeholder base.

While organizations are careful in formulating strategy and identifying the top management, they have been found to think through the capital and technology issues much more carefully than those involving stakeholder alignment. That imbalance is a primary reason new strategies fail, especially this is profound for organizations trying to shun the conventional business models to adopt a Sustainable Development approach.

However, as discussed in the previous article very few people are able to relate business with the concept of sustainable development.

Stakeholders are usually focused to achieve their business objectives rather than collaborating for a common goal.

This is due to both lack of clear and cohesive goals as well as the lack of understanding on how Sustainable Development Approach can be inculcated into their area of operations.

Let’s look at the stakeholders' focus (lens) and the challenges it brings in adopting sustainability in an apparel organization.

1. Business team

Business teams continue to evaluate projects and approaches from the perspective of the tangible economic returns rather than the long term ESG returns and opportunities that may shape up with changing business landscape and/or externalities. As a result, the business teams are always keen about the economic return on investment and the payback period both having very rigid and strict requirements.

In few cases, Sustainable Development projects do fit or nearly fit in the criteria but for the larger percentage it is not the case. Therefore, it is important that the business teams are aware about the externalities and are able to understand the future economic impacts of being unsustainable, ranging from higher implementation costs, loss of customer base and the reduced natural and social capital all leading to potential loss in revenue or the competition despite being competitive on costs.

Further, I have seen that the discussion usually revolves around the chicken and egg situation where business is looking for the demand for sustainable products and operations while on the other hand the customer is looking for a range of sustainable products before defining what is needed. (I am very interested to understand how my readers think this issue can be addressed)

2. Designers

Designers are the soul of an apparel organization. However, due to non-alignment of all the stakeholders on the Sustainable Development agenda they find themselves in the space where business is pushing for fast fashion, products with minimum cost and maximum fashion quotient, while investors and customers are looking for sustainable products that resonate with the increasing demand of minimal or no negative impact on environment and society. Adding to that, most of the designers lack understanding or face challenges on defining a sustainable product.

“Is bamboo fibre sustainable?”

“Can a garment with a 5% mix of organic or recycled cotton be called sustainable?

These are questions that need accurate and transparent answers from all the stakeholders within the value chain and without an overall alignment this is just impossible. In the midst of this, until clear vision and alignment with all the stakeholders is available, designers resort to focusing on what is sellable. 

3. Sourcing / Manufacturing

This team is the backbone of any apparel organization. However, they are always under constant pressure of providing the best quality products at the least cost with shortest possible lead time. One of the main reasons for this pressure is fast fashion which is changing the outlook of the entire fashion industry and is aiming at meeting or rather creating a need to wear current fashion trends amongst customers. 

Again, if all the stakeholders are not aligned, the pressure of fast and cheap merchandise leaves little room for the sourcing team to experiment and explore potential opportunities to adopt sustainable materials and processes. Moreover, with this pressure sustainability for them ends up being a cost either in the form of compliance with ESG requirements or adopting sustainable materials or sustainable practices because the other stakeholders do not give the required weightage to these.

This has major impact on the Sustainable Development Agenda as the maximum negative impact of an apparel and textile organization lies within its supply chain.

4. Customers

Customer is king! This is true to certain extent but I believe in recent times the organizations have been smartly pushing customers to buy what they want to sell.

Organizations are not transparent in communication with customers and sometimes make the customers believe they are buying sustainable products despite that not being true (Green washing), as highlighted in the previous article. This is possible because much like the businesses most of the customers are also not sure about how and when a product can be called sustainable.

Having said that the customers of tomorrow are able to visualize the plight of unsustainable business practices on earth and their own wellbeing. The customers are becoming vocal in their demand for sustainable products and so are the other important stakeholders of the society including NGOs and the investors.

However, unfortunately the demand is muted and given the option a larger set of customers still choose the cheaper option overlooking the sustainable quotient. This has left the businesses in limbo where they are not sure whether their customer base is ready to support the shift to Sustainable Development.

5. Investors

Investors are the true king of today. Defining from what is required, how it should be manufactured to the extent of product positioning. Sadly, most of these are still focused on maximizing the economic return.

I believe the investors have the power of defining the new rules of business returns and pushing the organizations to adopt Sustainable Development Agenda. Once that happens, they can actually close the loop between different stakeholders and ensure better alignment.

Some of the prominent and visionary investors have already started on the journey and the recent launch of Global Investors for Sustainable Development Alliance (GISD Alliance) cements the thought. Under the program, 30 influential leaders from the corporate world will work together in a bid to free up trillions of dollars from the private sector to finance the Sustainable Development Goals (SDGs), a collection of 17 global goals providing the blueprint to achieve a better and more sustainable future for all.

6. Communication / Marketing teams

Transparent and Accurate communication takes a key role in the process of transition to a Sustainable Development business model, as transparency requirements increase. However, without stakeholder alignment and any concrete collaborative shift, communication teams are forced to create false claims, without transparent and concrete evidence, to counter the competition and resonate with the demand of investors and customers.

In certain cases the information shared by other stakeholders is incomplete or inaccurate due to their limited or misunderstanding about what is sustainable. In either case it leads to the act of Green washing which if unchecked not only becomes a platform for reputational risk but also further misaligns the stakeholders who continue to focus on their functions.

In lieu of the above, I believe it is imperative to ensure that the stakeholders are aligned and there is a mechanism of continuous capacity building of all the stakeholders on the concept of Sustainable Development.

I will discuss some of the ideas in the next articles that will help organizations to embark on the journey of the Sustainable Development and address the challenges discussed in the first two articles.

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