Sustainable Materials – High in Comms, Low in Supply

After a lengthy summer break since our last post, a recent publication from the Textile Exchange, an NGO of which Svaki Dan is a proud member, dedicated to driving a positive impact on climate change and nature in the fashion and textile industry, caught our attention. Collaborating with the Boston Consulting Group, their deep dive into the state of the apparel industry was found the following: Demand for ‘lower-impact’ materials could exceed supply by as much as 130 million tons by 2030.

The Issue in a Nutshell

Many large apparel brands have made bold statements outlining commitments to replace some of their existing raw materials with more “preferred” or “sustainable” alternatives, such as regenerative cotton or recycled polyester. But it’s not just about self-proclaimed targets: By the end of the decade, many of the world’s largest fashion brands need to dramatically increase their use of raw materials with a lower environmental impact not just to meet their own decarbonization or broader sustainability targets, but also to comply with incoming sustainability regulations (especially in the European Union).

Breaking Down the Numbers

The report indicates a potential “preferred raw materials gap” of 130 million tons unless substantial changes occur on the supply side:

  • At current investment levels, the report predict an increase in the supply of lower-impact raw materials from 23 million tons in 2021 to 30 million tons in 2030.
  • In contrast, demand is expected to soar to over 160 million tons during the same period.

With all these Commitments by Major Fashion Brands, Why is Supply Not Keeping Pace?

The textile supply chain is notoriously short-term looking, as supply chains are set up for maximum cost and process efficiency. It is all about producing at scale, and the primary focus for both brands and suppliers is to ensure they can fulfill each upcoming season. Making big changes is therefore incredibly difficult, which means conventional raw materials are entrenched for a reason.

Consider cotton, a staple raw material: Organic cotton production is actually slightly down from a decade ago and remains a tiny fraction of global supply, accounting for under 1 per cent of total cotton production.

  • Changing systems require time and investment on almost every level, and this transition period is a key hurdle for farmers.
    In order to become an organic cotton producer, a farmer needs to abide by organic regulations for three years before they can get a certification.
  • For farmers (and their communities), changing practices is costly, with new equipment and other upfront investments, without the ability to charge the premiums associated with organic during the transition.
  • If a farmer tries a new, organic method of pest control and it fails, that can wipe out an entire year’s crop – a risk most small-scale farmers simply cannot afford.

Similar barriers exist for other “regenerative” material investments. For instance, when looking at developing manufacturing capacity for new material and textile-to-textile recycling innovations. The math is almost always the same: Lower-impact materials are typically more expensive than their conventional counterparts, and long-term ambitions to increase supply are running up against a near-term economic reality that favors low-priced, easily accessible options.

While brands like H&M Group and Zara-owner Inditex put investments behind their claims, those often don’t flow to farms but into local start-ups. One example is Inditex’s $75M dollar commitment to buy recycled polyester from US recycled polyester start-up Ambercycle, as well as by H&M’s investment in Swedish textile recycler Renewcell. Still, most of these investments and partnerships result only in small lines or PR-focused capsule collections. In fact, Rewnewcell recently made headlines with plummeting stock prices. The reason: as production at its new textile-to-textile recycling plant has increased, the demand it had expected hasn’t materialized leading to the departure of their (now former) CEO. You can read more about it here.

The current global economic situation further slows down progress. As a result of uncertainty in the market, companies are resetting climate targets. The report quotes a raw-material producer: “It is increasingly common to find brands reneging on sourcing commitments, cutting orders, changing their sourcing strategies, or retracting their commitments as a result of challenged margins, limited budgets, and an ever-changing market.”

It’s no surprise that most raw material producers are therefore inclined to decrease their (often more resource-intensive) production of preferred raw materials to sidestep losses.

What’s next?

In essence, the report emphasizes the importance of brands providing long-term commitments to suppliers, enabling them to invest in expanding the supply of lower-impact materials. Since this is not just about self-proclaimed sustainability targets but also has $-implications due to the incoming sustainability regulations, the report further highlights the need to approach the topic of materials not just within a brand’s sustainability department. Sourcing teams and senior executives must align with long-term goals that may take time to materialize.

At Svaki Dan, our advantage lies in our foundational commitment: ‘Superior comfort through sustainable materials’. For us, the materials have been the centerpiece of our entire strategy from day one. Our t-shirts are made 100% from Supima cotton, which is grown and harvested from American family-owned farms. Instead of using pesticides, these farms leverage satellite technologies to address soil health and their fields are laser-leveled to maximize water use efficiency. Similarly, our boxer briefs are made from Tencel Lyocell and organic cotton. The main ingredient (Tencel Lyocell) is made with tree pulp from certified and controlled forests and turned into fibers through a closed-loop production process. You can learn more about our materials and partners on our website.

Cheers,
Ben
Founder and CEO, Svaki Dan
ben@livesvaki.com

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