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Deloitte Sustainability DK - Value opportunities in sustainable fashion


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Sustainability and value in the global fashion industry

A Deloitte presentation of how a sustainable business approach may contain significant opportunities for companies operating in different part of the extensive fashion supply chain. The presentation connects one value opportunity to each part of the fashion value chain though many of the value opportunities is relevant in different parts of the value chain as well.

For more information contact DK Deloitte Sustainability Manager, Bahare Hagshenas,

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Deloitte Sustainability DK - Value opportunities in sustainable fashion

  1. 1. Business opportunities in sustainable fashion A value chain perspective
  2. 2. © 2014 Deloitte Sustainable fashion: Understanding the business case 2 Value chain
  3. 3. © 2014 Deloitte Designing sustainability Attract and retain future talent 75% of the global workforce will in 2025 be members of the ‘millennial’ generation (born in 1983 or later). 78% of the millennials are influenced by how innovative a company is when deciding if they want to work for them. Millennials believe business can do more to help society Resource scarsity Climate change Income inequliaty 68% 65% 64% Source: Deloitte. 2014. Big demands and high expectations. The Deloitte Millennial Survey “Talent is the energy that powers our Group. Without talent we would not be here…Sustainability is key to talent management.” Source: “I’m also really happy to see that our…colleagues show such interest in sustainability. This opens great opportunities to…attract and retain the talent we need for our continued growth.” Karl-Johan Persson, CEO 3
  4. 4. © 2014 Deloitte Sourcing sustainability Increase resilience against externality risks Polyester Since polyester is a petroleum product it has a significant climate change impact (27 kg CO2 eq/kg). Again, since polyester is a petroleum product and petroleum is a non- renewable resource, polyester presents a high impact on resource availability ($US157/kg) During the production stage polyester requires 18.3 kilowatt hour per pound of fiber Cotton 2,4% of the world’s cultivable lands is covered with cotton, but cotton production accounts for 24% of the world’s use of pesticides and 11% of the world’s use of insecticides. Accordingly cotton has the highest level of freshwater eco-toxicity of all the most common textile fibres. Cotton is one of the thirstiest crops. The production of 1 kg of cotton takes between 7.000 and 29.000 litres of water. During the production stage cotton requires 8.6-9.4 kilowatt hour per pound of fiber Sources: European Commission. Environmental Improvement Potential of Textiles (IMPRO-textiles) Danish Ministry of the Environment – Danish EPA4
  5. 5. © 2014 Deloitte Manufacturing sustainability Mitigate supply chain risks A Deloitte report on how 600 manufacturing and retail executives view the growing challenge of supply chain risks shows that… 48% find that the frequency of ‘risk events’ in the supply chain has increased. 53% think that the costs associated with ‘risk events’ has increased. 56% see ‘macro-environment’ and CSR/sustainability risks as the biggest threat. Source: Deloitte. 2014. The Ripple Effect. How manufacturing and retail executives view the growing challenge of supply chain risks (n=600) 5
  6. 6. © 2014 Deloitte Distributing sustainability Lower your costs GHG emissions connected with shipping a container of apparel from a Chinese field to an American store Xinjiang to Shanghai Shanghai to Los Angeles Los Angeles to Denver Truck Rail Ship Air Truck Rail Miles 2435 2744 6591 6488 1032 1163 Kg of CO2 eq 3656 1357 950 96.618 1550 575 Kg of Nox 12.7 16.5 17.0 418.8 5.4 7.0 Kg of PM10 3.7 0.6 2.7 12.7 1.6 0.2 Transport Source: Natural Resources Defense Council. 2012. Clean By Design: Transportation Packaging 20 million MJ of energy 8.500 tons of paper 1 million litres of water 500.000 litres of diesel 1 million litres of fuel oil 275 tons of plastic …saved annually Source: PUMA. Clever little Bag Infographic 6
  7. 7. © 2014 Deloitte Retailing sustainability Benefit from emerging market opportunities 63% of respondents under the age of 40 said in a global survey that they are willing to pay more for socially-responsible products/services. Source: Nielsen. 2012. The Global Socially-Conscious Consumer 53% 66%2012 2013 Percentage of consumers who consider transparency and honesty important when dealing with a business or buying from a brand. Source: Cohn & Wolfe. 2013. From Transparency to Full Disclosure 84% of the world’s most influential shoppers – the millennials – believe it is their duty to improve the world. Source: World Economic Forum. 2013. Engaging Tomorrow’s Consumer 78% growth in 2012 sales of organic cotton 69% growth in 2012 sales of organic cotton Source: Textile Exchange. 2013. Organic Cotton Market Report 7
  8. 8. © 2014 Deloitte Use sustainability Increase customer engagement and brand identification 60% of respondents in a global survey among executives asserted that they see customer engagement as very important to their strategy. 60% of the respondents believed that a strategy of creating deeper customer engagement will have a strong positive impact on their company’s future growth. Source: Economist Intelligence Unit. Beyond Loyalty. Meeting the Challenge of Customer engagement “The recession was starting to hit hard. It was an important shift. People were investing in more expensive products that would last a long time, rather than disposables. We wanted to engage with these people – these were our people. Engaging around quality products is a great way to lower the impact of our products.” Rick Ridgeway, VP Environmental Affair, Patagonia “I think material re-capture enhances the brand because it speaks to the long- term quality. Many consumers feel good about the program because it speaks to the long term value of the product.” Chip Bergh, CEO, Levi Strauss & Co. 8
  9. 9. © 2014 Deloitte Discard sustainability Internalize product value 25.000 tons of clothes were in 2012 handed in for recycling in Denmark. Mostly to thrift shops. This equals an average of 7 pairs of jeans per person. Source: Statistics Denmark 3650 litres of water 3 kg of chemicals 400 MJ energy 13 m2 land Source: Deloitte. 2013. Fashioning Sustainability $1.9 billion was in 2009 the value of global used clothes exports from the OECD countries. Source: UN Comtrade Data. 2011 4.200 tons in 2013 9
  10. 10. © 2014 Deloitte Sustainable fashion: Understanding the business case Attract and retain future talent Increase resilience against externality risks Mitigate supply chain risks Lower your costs Benefit from emerging market opportunities Increase customer engagement, and position brand Internalize product value 10 Value chain
  11. 11. © 2014 Deloitte Bahare Haghshenas Manager Deloitte Sustainability Tlf.: 31 31 04 31
  12. 12. Deloitte Touche Tohmatsu Limited Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. © 2014 Deloitte Statsautoriseret Revisionspartnerselskab. Member of Deloitte Touche Tohmatsu Limited