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Throughout Climate Week, optimism was in the air, but advocates worry it wasn’t grounded in reality.
While business leaders, industry advocates, politicians and others say they’re not giving up on the fight against climate change, there’s also been an unwillingness to do what’s necessary to succeed in it, a reluctance that doesn’t appear to be going anywhere. It amounts to what Maxine Bédat, founder and director of think tank New Standard Institute, calls “hopeism” — the notion that some positive steps are being taken, and so we’re therefore on the right track. “It’s not just fashion companies that seem to support this view, but multi-stakeholder initiatives and the investor community as well. At Climate Week, everyone was drinking each other’s Kool-Aid,” she says.
As brands and sustainability leaders descend on New York for Climate Week, we take stock of where commitments lie and what needs to happen for progress to pull ahead.
Conversations about the urgency of climate change are still shrouded in a myth that if companies and organisations simply collaborate more or expand their investments in renewable energy, they can get ahead of the problem. That’s patently false, according to a recent paper from the Cambridge Institute for Sustainability Leadership that was highlighted in an op-ed in the Financial Times last weekend. They say that green businesses — businesses that try to protect the environment while still making a profit — are not viable without broader ecosystem change.
“We now know, from decades of failure by the ‘leave it to the market’ or ‘voluntary’ approaches, that ambitious government action is essential for markets to deliver change,” authors Lindsay Hooper and Paul Gilding state in their paper, titled ‘Survival of the Fittest: From ESG to Competitive Sustainability’. When companies create the impression that they are making progress, Hooper and Gilding write, they delay more radical changes. “There is a very real risk that — with the exception of a few companies — the majority of businesses, and the ecosystem of advisors and advocates that support them, are actually contributing to the problem.”
The false hope that green-minded businesses will save us is hardly exclusive to fashion. But it can be an opportunity for the industry to lead — by modelling a different set of values, for example, shifting its business model and calling, loudly, for the kinds of regulations that are needed not only to force bad actors to improve their practices, but to enable the companies trying to operate responsibly to do so without facing strong competitive disadvantages.
“Fashion’s influence shouldn’t be underestimated for the part it can play in shaping what a new model of capitalism needs to look like,” says Rachel Arthur, sustainability strategist and advocacy lead for sustainable fashion at UN Environment Programme. “The fashion industry is perhaps the most perfect case study of the challenge that’s happening with so-called green business today. There are incredible efforts being made towards sustainability — new innovations, circular business models, increasing transparency, you name it — all driven by individuals who know what to do to drive change and are working tirelessly to try and achieve it. But they’re absolutely fighting against the tide.”
What needs to happen
In one Textile Exchange-hosted event during Climate Week that focused on systemic shifts, the conversation turned to the lack of bold leadership in fashion, the systemic barriers blocking progress and the need to set up systems that incentivise ethical behaviours and — unlike today’s — disallow unethical ones.
The latter was a key point made by Sandrine Dixson-Declève, president of non-profit Club of Rome, who reminded the audience that CEOs and CFOs are people too — individuals, who have to go home to their families and look their children in the eye — and are not exempt from basic rules of morality. Today’s ruthless pursuit of shareholder value and exponential profits “is immoral”, she said on stage, and made clear that momentum is building around the call for change. “The economy does not function for people. The economy functions for shareholders,” she said.
That’s why shifting the economy to be more environmentally sustainable must also involve a shift towards greater equity, leading critical thinkers say — or both will fail. We need “a holistic vision for a future of society”, says Francois Souchet, managing director of advisory firm Swanstant; one that generates wealth and opportunities for all, and is aligned with planetary boundaries.
John Elkington is the author and advisor on corporate sustainability who coined the term ‘triple bottom line’ — the premise that undergirds the B Corp model — in 1994. He is now saying that businesses can’t alone deliver that change. Only a full paradigm shift can, he argued on his Substack in August: “It is no longer simply about transforming businesses, important though that may be. Increasingly, too, it must be about transforming markets.”
What the industry needs is leadership, from both within and outside.
If change starts at the top, that means change in the industry has to start with the policymakers who regulate it. The lack of regulation has perpetuated what many say is a race to the bottom, with businesses enabled or even incentivised to prioritise cost above all else.
Leadership from within the industry, says Bédat, “means standing up and recognising that they are part of a system that is dealing with a serious collective action problem regarding climate action”. “The only way history has ever addressed collective action problems is law. In fact, it is the reason we exist in societies with laws. True leadership would be to join a campaign that says, ‘We need to be regulated.’” That has started to happen with companies that support The Fashion Act, for example — such as Eileen Fisher, Vestiaire Collective, Ganni and others — “but we have yet to see the sort of resourced leadership using this as their primary messaging, which is where we need to get to.”
Regulation is just as important for companies trying to operate responsibly, says Nicolaj Reffstrup, co-founder and former CEO of Ganni, as it is to bring those that aren’t into line. “While many are trying, it’s clear that we can’t solve this without profound global political action,” he says. “I gave up on brave political vision a long time ago, believing we had to make change independently — but now it’s evident that without political intervention, we won’t progress fast enough.”
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