The COVID-19 pandemic and its effects on the global economy have produced historic challenges for the fashion industry. This has included plummeting consumer spending and supply chain disruptions. Sustainability should arguably be one of the fashion market’s top priorities, according to McKinsey. The silver lining for sustainable living is it could speed up the shift to greener supply chains. This not only could benefit clothing stores but also affect the overall fashion industry. It could involve major sustainability changes involving more recyclable raw materials, eco-friendly substitutes for hazardous chemicals, and reduced water consumption. This can help the fashion industry to survive the new normal after the coronavirus outbreak.

Economic Impact of the Fashion Industry

The fashion industry is a massive global market worth nearly $1.8 trillion, according to Common Objective. It includes several stakeholders in the manufacturing of clothing, footwear, and leather.                                                                     

Value Chain

Textiles and related raw materials are used in the supply chain for several functions, according to the United Nations Alliance for Sustainable Fashion. This includes:

• Design
• Manufacturing
• Distribution
• Consumption
• Disposal

This market is driven by fashion goods’ seasonality. Over the past decades, this situation has affected the production and life cycle of fashion goods.

Global Impact

Since its formation, the fashion industry has become one of the world’s biggest consumer goods markets. This includes complex value chains with enormous economic importance. In fact, fashion is the second-largest market for consumer goods in Organization for Economic Co-operation and Development (OFCD) countries. It only follows food and drinks.

How Will the Pandemic Change the Fashion Industry? (video)

Income and Jobs 

The fashion industry is also responsible for the generation of income and jobs. It employs more than 60 million people throughout the world. In fact, in some countries, the apparel and footwear sectors are a large contributor to a nation’s gross domestic product (GDP).

Post-Pandemic Sustainability in the Fashion Industry

The Sustainable Apparel Coalition (SAC) recently published a report on creating a more sustainable fashion industry post-COVID-19.

COVID-19 and Sustainability Programs 

The Novel Coronavirus disease (COVID-19) has affected clothing and footwear companies to different degrees. Some companies have de-prioritized sustainability such as waste management and recycling, due to financial challenges. Meanwhile, other companies have doubled-down on their sustainability efforts because they have that option.

Sustainability experts in the fashion industry highlight the importance of focusing on making the fashion industry more sustainable after the COVID-19 outbreak ends. In fact, the global crisis has revealed how fragile the system of fashion sustainability is. 

Weaved or Siloed 

It’s likely the current pandemic will become a game-changer in terms of sustainability. That includes wholesale changes in environmental and social perspectives. Fashion-focused companies’ sustainability during the viral outbreak has varied greatly. However, companies that weaved sustainability throughout their operations have performed better than those that siloed it or ditched all sustainable efforts.

Bearing in mind the latest waste generation and recycling statistics, taking a more eco-friendly becomes a must, as this approach can provide mutiple benefits. This includes improved health, wellbeing, and safety of workers in the fashion industry throughout the world. Companies that take this particular approach will probably be strong post-pandemic and sustain strong relationships with their business partners. 

Going by what the lectures behind an innovative master’s degree in fashion design and business teach us, having a career in the fashion industry means being knowledgeable and skilled in many different areas. 

Effects of COVID-19 on the Global Fashion Industry

The ongoing global crisis has caused many companies in the fashion industry to take a more sustainable approach. This has been due to various factors, including health issues caused by synthetic chemicals used for clothing products like tie-dye t-shirts. 

COVID-19 and Sustainability 

The global pandemic and lockdowns have caused some companies in the fashion industry to realize the negative effects of non-sustainable practices. This includes the effects on workers and the planet. 

Shift to Sustainability 

Many fashion and footwear companies have pivoted away from synthetic chemicals due to their negative effects on workers and the local environment. They’ve switched to natural materials, including options like hemp, bamboo, and roots. 

Going by what the lectures behind an innovative master’s degree in fashion design and business teach us, when we consider the fashion industry, we should look further than mere aesthetics, focusing on different ethical considerations, as well. That’s why more and more companies are shifting focus on true sustainability. This includes other factors besides natural and organic materials, including sustainable design/manufacturing and fair wages.  

A Beginner’s Guide to Sustainable Fashion (video)

Economic Losses 

The first human case of the coronavirus disease was reported one year ago in December 2019. Since then, the ongoing pandemic continues to affect the global economy, including the fashion industry. In May 2020 Bangladesh alone reported $1.5 billion of canceled orders, according to Bloomberg. In addition, global fashion and luxury sales plummeted up to 70% from March to April of the same year. 

Economic Recovery 

Some economic experts have suggested that going sustainable might help some companies in the fashion industry to recover from pandemic losses. Various industry leaders have also called for new ideas to limit the pandemic’s negative effects on the fashion industry. This includes building transparency and accountability within the value chain.

New Sustainability Options Due to COVID-19 

Thinking Smaller 

The global pandemic has created new opportunities for designers and consumers. For example, 

fashion designers could focus on creating a fashion collection that’s one-fourth of what they produced in the past. The collection could still maintain traditional features yet use sustainable practices. For example, they could still be lovely and wearable, yet produce less waste and treat workers fairly.

There’s also a big demand from Generation Z for fashion that’s sustainable and ethical. This is critical since Gen Z now makes up 40% of global consumers, according to McKinsey. These younger consumers represent a modern awakening in consumer consciousness in how purchase decisions affect the global environment. 

Fashion industry experts explain this creates a post-COVID-19 opportunity for the fashion industry. It can help to help communities stitch back together, so they’re healthier and stronger.  

The Alliance’s Sustainability Goals for Fashion Industry 

The Alliance is an umbrella group that includes the United Nations (UN) and partner agencies like the United Nations Environmental Program (UNEP) and  World Bank Group. In March 2019, it began supporting cooperative action in the fashion industry to help achieve Sustainable Development Goals.    

 The UN partnership works with governments and the private sector to help them:

• Set sustainability goals
• Reduce waste
• Limit CO2 emissions
• Protect workers

Reducing the fashion industry’s carbon footprint is especially critical. It accounts for 10% of the world’s total carbon dioxide emissions, according to the World Bank. 

Following France’s Example

In February 2020, France passed a law that required clothing companies to follow over 100 sustainability rules. This included different ones like the prohibition of destroying unsold clothing goods. 

This has inspired some clothing companies to take steps like reusing mass-produced denim to create new materials, for example.  

COVID-19-Caused Order Cancellations   

Since the Alliance’s 2019 actions, the COVID-19 outbreak has triggered enormous worldwide order cancellations that have affected the textile, apparel, and footwear industries. However, the situation has been particularly devastating in developing countries. 

Economic Effect 

Such cancellations have had a devastating impact on the financial stability of manufacturers who need such order fulfillments to maintain their business operations. 

Lost sales revenue is just one of the effects of COVID-19 cancellations. It’s also resulted in a huge overstock inventory that’s caused great strain on affected industries. 

This has caused companies and organizations to take extreme measures to survive the global crisis. This includes ones like:

• Cost-cutting
• Furloughing workers
• Online sales
• Saving cash

These factors have triggered ripple effects on value chains. 

Post-COVID Sustainability Initiatives 

It’s important to focus on economic recovery in terms of short to long-term phases. However, this should also include a focus on conserving natural resources and worker safety in both clothing factories and corporate offices. 

It’s critical for brands to focus on rebuilding trust in the value chain. This should also include reviewing sustainability commitments and boosting transparency. Companies dealing with overstock from the COVID-19 crisis might also consider becoming a zero-waste brand as part of the new normal. 

Fashion industry companies must proactively plan for the next big issue. They can do that by managing current stock, opening stores, and managing future seasons. This provides opportunities to create game-changing solutions for challenges like responsibly using surplus raw materials. 

The ongoing COVID-19 pandemic has created new challenges for the fashion industry. How the global market response will have long-term effects on the supply chain. Meanwhile, expanding sustainability efforts will strengthen the fashion industry, boost transparency, and improve partnerships with worldwide brands.                 
ABOUT THE AUTHOR: Jennifer Hahn Masterson is the Lead Content Strategist at Spread the Word Solutions, specialized in fashion, design, and lifestyle.