DHL Chief Commercial Officer Katja Busch and Morten Lehmann, Chief Sustainability Officer of the Global. Fashion Agenda, share their insight into how the fashion industry should move towards a carbon-free future.
In order to work collaboratively and define strategies and action plans that are capable of achieving the objectives set out in the Paris Agreement on climate change, customers and analysts are applying growing pressure on multiple industries. “In her opening remarks in the latest BoF LIVE episode, Katja Busch said there is a huge deficit between what is being accomplished and what we can accomplish. “We see a special responsibility to work with fashion to reduce emissions.”
DHL has already made efforts to operate more sustainably, which is a crucial logistics partner to the fashion industry, powering complex global logistics and supply chains. The company has reduced its carbon emissions by 35%.
It is also intended to reduce emissions by 50 percent by 2025 and aims to be carbon neutral by 2050. Busch was joined by Morten Lehmann, the Global Fashion Agenda’s chief sustainability officer, who has been a pioneer in the sustainable fashion movement for even more than a decade, conducting original research, raising awareness and working with an influential group of strategic partners, including: H&M Group, Kering, Li & Fung, Nike, PVH Corp., Sustainable Apparel Coalition and Target.
Four key insights from the event are highlighted below by the BoF: from carbon reduction and the importance of tracking and traceability, to extending product lifecycles and reducing overproduction.
Strategies for Carbon Abatement are critical
If we don’t act now a recent McKinsey report has calculated that we’re going to miss the 1.5-degree path by 50percent, limiting global warming to 1.5 degrees Celsius,” Busch explains. “If we don’t act now we’re going to miss the 1.5-degree path. “This means that we need to minimize annual emissions by about 1.1 billion tons, half of the current estimates.” To date, attempts to minimize pollution and lead to a 1.5-degree path have primarily amounted to carbon offsetting policies, focusing on less evil,” over more good.” “It is not enough to merely offset emissions to meet [sustainability goals].”
The industry will need to intensify reduction actions, including the scaling up and intensification of current decarbonisation. “This means that we need to minimize annual emissions by about 1.1 billion tons, half of the current estimates.” To date, attempts to minimize pollution and lead to a 1.5-degree path have primarily amounted to carbon offsetting policies, focusing on less evil,” over more good.” “It is not enough to merely offset emissions to meet [sustainability goals].”
The industry will need to intensify reduction actions, including the scaling up and intensification of current decarbonisation approach — “From manufacturing to production to transport,” adds Busch. We’re not on a successful track, and the system needs to adjust.
Although we have seen a decrease in emissions due to the Covid-19 pandemic, as we step towards 2030, we are still seeing a significant rise,” Lehmann says. “While we may see a deep economic recession, at the moment, the economic outlook is uncertain, we still expect huge growth in the industry. Currently, the industry’s sustainable output is not catching up, the gap is just getting wider. We’re not on a successful one.
Tracking and traceability might have an effect on investment Brands have to invest in and increase monitoring and traceability capabilities within their current supply chains in order to promote a roadmap to a carbon-free industry. “Traceability is an absolute must. It’s hard to know where you are going if you don’t grasp the supply chain,”. In technology, DHL’s Busch sees the opportunity to unlock more accountability. “We are talking about smart sensors on packages today. We can expect completely transparent supply chains with the [rollout] of 5G, with real-time analytics at almost every stage.
On overproduction, brands should concentrate on the Fashion In Climate report of the Global Fashion Agenda, produced in collaboration with consulting firm McKinsey & Company, indicates that brands have the ability to deliver 20 percent of the required reductions directly. “We have become aware of how much overstock [exists] since the Covid-19 pandemic,” Lehmann says. With improved foresight technologies, can we become better at predicting real demand?
This is the only way for overproduction to be minimized. “Consumers raise concerns about waste, with this subject being pushed massively by the younger generations,” adds Busch. “We can’t wait for the customers, though.
Brands need to be better at coming up with a product that is easy to understand for customers.
For Busch, at the packaging point, curbing overproduction is also possible downstream. Although it’s not the biggest contributor to pollution, as it’s very clear, it’s an emotional subject for clients. “While the fashion consumer is currently piloting recycled packaging, smart algorithms can be used to reduce waste,” says Busch. At DHL, we have been collaborating with a major fashion retailer to [streamline] the packaging used using these algorithms.
The number of swap bodies per day was reduced from five to three, only by having smarter packaging. A 40 percent saving of space could be equal to a major competitive advantage. The opportunity for re-commerce heightens as an opportunity to prolong the product lifecycle, many global players in the fashion space and in adjacent industries are beginning to explore resale models. Re-commerce is also being recognized by the apparel industry. More than 70 percent come from upstream acti acti with emissions related to upstream activities such as production.
