BOSTON – Moving towards a more sustainable fashion industry will require a US$20bn to US$30bn increase investment – a factor of three or more over current investment levels. That’s the conclusion of a new report by Fashion for Good and Boston Consulting Group. The report claims the fashion industry offers “unprecedented investment opportunities,” with sustainability at the top of the fashion industry’s agenda, “as leaders recognise the urgent need to move toward responsible practices under growing consumer and regulatory pressures.”
It claims that while the fashion industry has historically engaged in a cost-driven race to the bottom, giving little attention to radical new technologies, “a perfect storm of innovation and opportunity is now forming, and investors and companies that can capitalise on sustainability and impact-driven innovation will transform the industry.”
The study calculates that “transitioning toward sustainability, yields a US$20bn to US$30bn financing opportunity per year to develop and scale disruptive innovations.”
Some might describe this as an opportunity, others might call it a risk. Indeed, the investment gap the report purports to have identified – and it’s difficult to know where figures such as US$20bn to US$30bn have been plucked from – is doubtless there for a reason. Namely that would-be investors don’t see an ROI in the sustainable fashion space – not yet anyway. Perhaps cash-rich brands should be doing their own investing in disruptive technologies?
The report adds: “With its US$2 trillion market size, the fashion industry offers major untapped opportunities for investors and companies. But to bring the necessary solutions to scale, all players – fashion brands, supply chain partners, investors, and others – need to step up to accelerate innovation. The clock is ticking for the industry to advance, and companies and investors that act boldly and rapidly will lead the transformation and ultimately win.”
“While the first steps have been taken, fashion needs to embrace and accelerate innovation to future-proof the industry. Doing so opens up major untapped returns for those who can capitalise on the upcoming technological disruption,” said Sebastian Boger, a BCG managing director and partner.
“Disruptive solutions that can offer major leaps forward toward circularity exist today, and the opportunities to invest and scale them within the industry are vast. This seminal study provides powerful insights and a clear call to action for all players to collaboratively drive innovation,” added Katrin Ley, managing director of Fashion for Good.
More on this in our next printed magazine.
