Cascale Meeting: Sustainable transformation requires patience

Around 600 corporate social responsibility (CSR) executives from the global textile industry gathered in Munich for Cascale’s annual member meeting. Representatives from major brands and retailers - from LVMH to Zalando, Marks & Spencer and Walmart - took to the stage and filled the audience to exchange progress and challenges on the path to sustainable transformation. If Cascale doesn’t ring a bell, you might know the organisation under its former name, the Sustainable Apparel Coalition (SAC), as it was called until February this year.

Launched exactly 15 years ago by Patagonia and Walmart as a global sustainability initiative for the apparel industry, the SAC invented the famous Higg Index, a digital tool that for the first time ever tackled the mammoth task of measuring the environmental impact of textile production across the global value chain, in order to drive improvements in resource use based on this data.

Together with the SAC - or rather Cascale - hundreds of apparel brands and retailers have since embarked on a journey to shed more light into their sprawling global supply chains and take ownership of the environmental and social footprint of their products. To this end, the organisation has continuously refined the Higg Index over the years and created further digital tools.

Where does the industry stand after all these years? How successful have all the sustainability teams been so far? How much transparency have brands achieved in their supply chains? Can the set climate targets be reached and how are the people in charge coping? A visit to the Cascale event in Munich shows that the industry has already taken big steps when it comes to CSR, but that it still needs to stay the course.

Brands mostly only know their direct suppliers

“Overall, you can say that most companies predominantly only know their direct suppliers, which are usually the sewing factories,” said Philipp Mayer, co-founder of traceability platform Retraced, during the conference. “Many still don’t know where the fabrics and ingredients come from.” In CSR jargon, these direct suppliers are referred to as “tier 1” companies. The next level up the supplier pyramid are fabric and ingredient suppliers (tier 2), followed by spinning mills (tier 3) and raw material suppliers (tier 4).

However, the biggest footprint of a textile product is not created at tier 1, i.e. in the sewing factories, but further down the line, in the areas of fabric and yarn production and raw material extraction. Digitalisation of the supply chain and data exchange have usually not yet reached these levels. Companies are only just starting to tackle this. Susan Scow, for example, CSR manager at sustainable US fashion brand Eileen Fisher, expects to be able to collect tier 2 and tier 3 data within the next five years.

Supply chain data management is time-consuming

Despite helpful tools, collecting information from the supply chain is often still enormously time-consuming—both for the brands collecting the data and for the suppliers who have to provide it. For example, a supplier from Pakistan reported on the podium that it takes him up to 15 days to gather all the data for a single order. The same applies to audits: “Suppliers are frustrated. I know factories that are audited up to 200 times a year. That doesn’t make sense,” said Colin Browne, CEO of Cascale. “We need the right balance between reporting and driving progress.”

A luxury group like LVMH, which owns 75 brands from a wide range of sectors, from fashion to watches to wineries, conducted over 2,000 audits across the group last year. At the same time, the group’s central CSR department consists of just three people, revealed Caroline Markiton, supplier sustainability senior manager at LVMH, in an interview with Worldly—plus additional CSR managers within the brands.

This means that brands also quickly reach their capacity limits when it comes to data collection. Especially since some major brands are already communicating that they are tracking millions of items. Many smaller brands therefore believe that they must be able to do the same. “However, many are not aware of what it actually means to collect all this data at product or order level—especially for their suppliers,” says Philipp Mayer of Retraced. Instead of simply collecting data willy-nilly, he advises first asking yourself what exactly you want to do with the data. For example, the data already shows at tier 1 which energy sources suppliers use. If energy generation is based on coal, for example, brands could start there and initiate a switch to renewable energies. However, simply collecting data for its own sake makes no sense, especially if the mere act of collecting data distracts from the actual goal, namely to address improvements based on the data.

AI-powered data generation to help accelerate change

At the same time, it is important to address tiers 2 to 4 as soon as possible, because that is where the greatest leverage for sustainable change lies. “If we want to achieve our sustainability goals by 2030, we need to have the data, and we need to use it,” says Adele Stafford, executive vice president of growth at Worldly. Worldly is a technology company whose data platform was developed for the Higg Index. With the ‘Product Impact Calculator’, Worldly has developed a new tool that not only generates this data from the upstream stage more easily and clearly, it also provides suggestions for possible measures that should be initiated. It also shortens the frequency of data collection. While data has so far only been collected once a year, automation and AI should make this possible more frequently in the future. “This is the only way to see results quickly and move forward,” explains Stafford.

London-based fashion retailer Marks & Spencer is considering working with its suppliers solely via digital tools in the future and discontinuing the commissioning of audits. “We are moving towards putting the audits back into the hands of the factories,” says Fiona Sandler, global head of responsible sourcing at M&S. “We don’t see ourselves as the police of our supplier factories. It’s about mutual respect and a relationship on an equal footing.” A pilot project with several suppliers is currently being launched.

Cascale wants to directly address the world’s largest factories

Cascale also wants to speed things up. A new analysis by Reset Carbon, a Cascale partner that uses data from Cascale’s Higg Index, shows that 1,500 production facilities in nine countries are responsible for 80 percent of the carbon emissions of the textile and apparel industry. “The reality is that the consumer goods industry is not doing enough to combat climate change. As the new data shows a heavy concentration of climate impact, we need to take action where it is needed most. We need to focus on the industry’s strategic supplier hotspots. There is no way we can reach our 45 percent reduction target without engaging these 1,500 facilities,” explains CEO Colin Browne. In order to move forward more quickly, Cascale also wants to seek direct contact with the production facilities in the future and address new financing models. Up to now, all initiatives have primarily been run via the “detour” of the members, who worked with their suppliers to improve their environmental footprint.

Cascale also wants to put more pressure on its own membership programme in the future: Cascale’s membership requirements now include that corporate members join the organisation’s decarbonisation programme and set science-based targets (SBTs) or science-aligned targets (SATs). In 2023, 59.7 percent of Cascale corporate members had either set SBTs or SATs or had begun the process of setting them—a 28.9 percent increase over the previous year.

Involving other industries

The fashion industry is now considered a leader in the area of traceability. No other industry has made such an effort to achieve transparency and traceability in recent years. The digital tools that have been developed for this purpose can now also be used for other industries. First and foremost for hard goods, which are already distributed by fashion and sporting goods manufacturers anyway.

Katy Stevens, head of CSR & Sustainability at the European Outdoor Group, explains that the outdoor industry only consists of clothing to a certain extent. “The rest is footwear and hard goods. That’s why we need a tool that we can use for all areas.” Although the tools from the fashion industry can also be used here with appropriate adjustments, the mindset of other industries is often not yet so advanced. “Metal companies for carabiners or other equipment have never had to collect this data before, many don’t understand why we want to do it,” says Stevens. “In fashion, the public has pointed the finger at the abuses for many good reasons over the years, that hasn’t happened in other industries,” says Jonathan Salmon, Head of Sustainability at Li & Fung. In these industries, therefore, some persuasion is first necessary.

Call to keep going

While the topic of sustainability has boomed in recent years and has been enormously important in the communication of many brands, a certain sustainability fatigue seems to be spreading. “There is a fatigue setting in, you feel like you’re rolling the stone up the hill again and again,” is how Adele Stufford of Worldly describes the current situation in many CSR teams. “There is always a long phase of frustration before change. Change management is hard work. Some people don’t want to listen and change their routines,” says Pia Heidenmark Cook, who worked as sustainability manager at Ikea for many years.

The current economic situation in the fashion industry is also contributing to the further postponement of important measures. However, unlike a few years ago, the instruments are now available to bring about change. “We can do better. We know how to do it. The only question is: Do we have the courage? Do we have the commitment in the company, and do we have the capacity?” Cascale CEO Colin Browne asks the audience and appeals to the listeners not to give up now.

This article originally appeared on FashionUnited.DE. Translation via AI and edit by Rachel Douglass.