Being green is in fashion

Fashion companies are falling over themselves to show they are improving their questionable sustainability credentials. Yet some of their marketing has got ahead of realities of the shop floor, notes sustainable multi-asset investment specialist Rahab Paracha.

Clothes shop window

Even though it happens every year, after a glorious summer in the UK, I was taken a bit more by surprise at just how quickly temperatures dropped as we moved into autumn.

The cold snap meant one of my close friends was in dire need (her words, not mine) of some new jumpers, and so I was convinced to go along with her to Oxford Street. As I walked into Zara, I noticed ‘Join Life’ tags on a few of their pieces noting “at least 50% of recycled polyester and produced using less water”. Similarly, H&M had ‘Conscious choice’ labels which, after doing further digging, I found means an item contains at least 50% of “more sustainable” materials like organic cotton. Initially, I was happy to see that mainstream fashion labels were doing more on the sustainability front. But then, looking around, all I could see were people with baskets full to the brim of these new clothes, many of which they probably didn’t really need. It got me thinking: can fashion ever really be sustainable?

Astoundingly, roughly 60% of all materials used by the fashion industry are made from plastic; 85% of textiles made each year end up at the dump.

Today, fashion accounts for up to 10% of global carbon emissions – more than international flights and shipping combined – and nearly 20% of wastewater. For many, including me, this is a shocking statistic because we know very little about how our clothes are produced. Modern synthetics, like polyester, rely heavily on petrochemical products that come from many of the same oil and gas companies driving greenhouse gas emissions. Astoundingly, roughly 60% of all materials used by the fashion industry are made from plastic; 85% of textiles made each year end up at the dump. They also shed tiny pieces of plastic with every wash and wear – the equivalent of 50 billion plastic bottles a year. These microplastics pollute the oceans, fresh water and land. And it doesn’t end there. The fashion industry uses mindboggling amounts of water to bleach and dye clothes which contributes significantly to water scarcity in some regions. And that’s before you get into the effects of untreated wastewater on communities and their environment…

Acceptance is the first step

Should we be happy then that more fashion brands are focused on creating more sustainable clothing, right? At least they are admitting they have a problem.

The issue we have is that many of the phrases brands are using, such as ‘recycled’, ‘carbon neutral’ and ‘close the loop’ are vague, misleading, and not defined in law. Many brands have been accused of considerably overstating the sustainability credentials of their clothing and getting caught up in greenwashing scandals. In just the past year, H&M has been accused of portraying products as being better for the environment than they actually are, Decathlon has had to address claims that its ‘Eco-design’ label lacks clarity and detail, and ASOS, Boohoo and George at Asda are being investigated by Britain’s competition regulator (CMA) for misleading shoppers.

When you think about it – can a garment really be sustainable if it still uses fossil-fuel-based synthetics? Does using recycled polyester, which takes hundreds of years to decompose and can still lead to microfibres escaping into the environment, really solve the issue? Fashion, and even more so fast fashion, is all about having the most popular or latest style of something. This, by design, leads to vast amounts of overconsumption and to grave effects on the environment. Nevertheless, I think it’s definitely a step in the right direction that some brands are trying (more than others) to address the problem by encouraging consumers to shop for a more sustainable option, but I think there may be a whole different solution to the problem.

Be the change you want to see

Outdoor clothing retailer Patagonia recently hit the headlines after its billionaire founder announced that any profit not reinvested in running the business would go to fighting climate change. Patagonia is well known for its controversial ‘Don’t buy this jacket’ adverts asking shoppers to think about the environmental cost of their purchases. And it really does make a difference: continuing to wear a garment for just nine months longer could diminish its environmental impact by 20 to 30%. Many brands are now tapping into a global fashion resale market as way to appeal to younger generations who are most open to buying pre-loved fashion. The move to a more circular business model can also, of course, make money.

Consultant McKinsey & Company estimates the resale market will have 10-15% annual growth in the next decade, which is considerably higher than the broader retail clothing sector. Third-party marketplaces like The RealReal, Thredup, Ebay and Vinted hold a combined 25-30% market share, and are driving much of the sector’s growth. But other players are getting involved – some with more integrity than others. Fast-fashion brand PrettyLittleThing has launched an app that allows customers to resell their pre-loved clothes, called PrettyLittleThing Marketplace. But given its products are designed to only target short-term trends anyway, the cynic in me is wondering if this simply a marketing ploy or, dare I say, a bit of fashion greenwashing?

Another sector which has traditionally shied away from the resale market is luxury, due to fear of counterfeit products and a dilution of brand value, but this encouragingly also seems to be changing. Balenciaga recently announced a partnership with tech-and-logistics platform Reflaunt to help customers sell on their old Balenciaga items, and last year French conglomerate Kering (which owns Balenciaga, as well as Gucci, among others) acquired a 5% stake in luxury resale site Vestiaire Collective.

But an interesting dichotomy emerges when you compare Gen Z’s thoughts on sustainable fashion with their behaviour. While data shows that younger people would like to buy more eco-friendly products, it seems price continues to dictate decision making more. This is why resale platforms are a good option for sustainable consumers – when retailers hike prices, more affordable second-hand items become more appealing. But perhaps this is also why, despite all the progress being made with sustainable fashion, in parallel there has been a huge boost in the fortunes of Chinese fast-fashion brand Shein, whose sales have skyrocketed since the start of the pandemic. Ultimately, it seems young people want low-cost sustainable fashion which, for now, is pretty difficult without compromising one thing for the other. As Kermit the Frog would say, it’s not easy being green.

In terms of what we are doing – we’re still on the hunt for a retail or fashion brand which meets the criteria for our sustainable Rathbone Greenbank Multi-Asset Portfolios, as nothing is quite up to scratch yet. But with lots of new companies and innovations emerging, I’m excited to see if we ever get there. 

Tune in to The Sharpe End — a multi-asset investing podcast from Rathbones. You can listen here or wherever you get your podcasts. New episodes monthly.


Important legal information

This area of the site is for professional advisers

Please read this page before proceeding, it explains certain legal and regulatory restrictions applicable to the distribution of this information. It is your responsibility to inform yourselves of and to observe all applicable laws and regulations of the relevant jurisdiction.

This section of the website is directed only at investment advisers and other financial intermediaries who are authorised and regulated by the Financial Conduct Authority (FCA).

The information provided in this site is directed at UK investment advisers only and must not be circulated to private clients or to the general public. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

I confirm that I am an investment intermediary authorised and regulated by the Financial Conduct Authority. I have read and understood the legal information and risk warnings below:

Important Information (Terms and Conditions)

The information contained on this site is believed to be accurate at the date of publication but no warranty of accuracy is given and the information is subject to change without notice. Any opinions or estimates included herein constitute a judgement as of the date of publication and are subject to change without notice. Furthermore, no responsibility is accepted for the accuracy of any information contained within sites provided by third parties that may have links to or from our pages.

Rathbone Investment Management Limited ("RIM") is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered Office: Port of Liverpool Building, Pier Head, Liverpool L3 1NW. Registered in England No 01448919.

In accordance with regulations, all electronic communications and telephone calls between Rathbones and its clients are recorded and stored for a minimum period of six months.

The information provided in this site is directed at UK investors only. It does not constitute an offer to sell, or solicit an offer to purchase any investments by anyone in any jurisdiction in which such offer or solicitation is not authorised or in which a member of the Rathbone Group is not authorised to do so.

In particular, the information herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in France and the United States of America to or for the benefit of United States persons (being resident in the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof).

In order to comply with money laundering and other regulations, additional documentation for identification purposes may be required.

Rathbones shall have no liability for any data transmission errors such as data loss, damage or alteration of any kind including, but not limited to, any direct, indirect or consequential damage arising out of the use of services provided or referred to in this website.

Past performance should not be seen as an indication of future performance.

The value of investments and the income from them can fall as well as rise and you may not get back the amount originally invested, particularly if your client does not continue with the investment over the longer term.

Changes in the rate of exchange between currencies may cause the value of an investment to go up or down.

Interest rate fluctuations are likely to affect the capital value of investments within bond funds. When long term interest rates rise the capital value of units is likely to fall and vice versa. The effect will be more apparent on funds that invest significantly in long dated securities. The value of capital and income will fluctuate as interest rates and credit ratings of the issuing companies change.

Tax levels and reliefs are those currently applicable and may change and the value of any tax advantage will depend on individual circumstances.

Investing in emerging markets or small companies may be potentially volatile, as these investments are high risk.

The design, text and images are owned, except as expressly stated by members of the Rathbone Group. They may not be copied, transmitted, displayed, performed, distributed, licensed, altered, framed, stored or otherwise used in whole or in part or in any manner without the written consent of Rathbones except to the extent permitted and under the procedures specified in the copyright Designs and Patents Act 1988, as amended and then only with notices of Rathbones' rights.

Subscribe to the In the KNOW blog email