Risks and Opportunities in the Fashion Industry.
Bloomberg reports that about 1,089 garment factories in Bangladesh have had orders canceled worth roughly $1.5 billion due to the coronavirus outbreak”. Many workers were should out definitely and while they already had poor wages now they don’t have anything. Nazma Akter the executive director of AWAJ explains, “These workers now don’t know how they will take care of their families in the coming days – how they will manage costs for food, rent, and other necessities.
This global crisis has highlighted that we are on the edge of the precipice if we continue with the current linear system. Nothing grows forever and our current economic system neither.
The COVID-19 emergency has several parallels to the climate emergency and it's been a risk come true.
There are many other risks associated with climate change and the fashion industry related to business impact at both an operational and strategic level. But there is also an opportunity for everyone. Here some examples of Risks and Opportunities in the Fashion Industry.
RISK: The price of natural fibers will rises unexpectedly due to a climate crisis (eg. flood the fields of one of the larger production countries of this raw material).
OPPORTUNITY: To mitigate it, fashion brands can use recycled fabrics.
RISK: Demonstrations by workers in the fashion industry will stop production and delay deliveries in our country, leaving the companies without products to sell.
OPPORTUNITY: The companies should work with a network of suppliers that ensure the working conditions engaging trust with communities and workers with no risk of social issues.
RISK: Talented young staff trained in sustainability will move to competitors.
OPPORTUNITY: Integrate sustainability programs to all staff aligned to the purposes of each member of the team and their roles in the company.
RISK: Many brands are involved in cases of a factory where there are no security measures or it violates human rights.
OPPORTUNITY: Brands will become transparent in their supply chain and make public the state of their stakeholders.
RISK: Governments will subsidize only companies that promote sustainable business models.
OPPORTUNITY: The companies should ensure a circular fashion business model and get economic rewards for investing in new sustainable practices.
RISK: countries like Ghana where the biggest second-hand and stock markets in the world are located are rejected.
OPPORTUNITY: Companies should stop all the overproduction and become a 100% “made to order” business, producing only the garments sold under the previous order.
Resilience is almost a mandatory requirement for any business today. To be able to face the challenges and mitigate the consequences, any fashion company should be ready to advance possible risks associated with its company and trace a path to sustainability.