Editor’s Note
This article examines the core economic challenge of transitioning to sustainable fashion, highlighting how cost pressures and overconsumption remain significant barriers to improving social and environmental standards across the industry.
The fashion industry has long been criticized for poor working conditions across its supply chain and the adverse environmental impacts of producing, using, and disposing of raw materials and finished goods. The United Nations established the UN Alliance for Sustainable Fashion in 2019, calling for higher standards from fashion brands. A primary barrier to achieving social and environmental sustainability in fashion is cost—specifically, the costs associated with raising wages, improving working conditions, properly handling waste, and using eco-friendly materials. Today, the average consumer buys more clothes but wears them fewer times than ever, fueling a vicious cycle of overproduction as brands try to keep up with fast-changing trends.
The sustainability challenges facing the fashion industry include raw material costs, carbon footprint, unsold inventory, and poor working conditions.
To meet consumer demand for fast fashion—cheap, quickly produced clothing and footwear—many brands opt for synthetic fabrics over more expensive textiles. Fabric constitutes 60% to 70% of a garment’s total cost, according to industry site Fibre2Fashion, so choosing sustainable raw materials like organic cotton and bamboo inevitably raises retail prices. For instance, organic cotton uses less water and is more sustainable than conventional cotton, but costs $500 to $700 per ton compared to $225 to $345 for conventional cotton.
Companies can offset the cost of sustainable materials in several ways. Sometimes, recycled fabrics cost less than virgin materials, as with wool. However, recycled cotton yarn is often more expensive due to additional processing steps. Brands can also cut costs elsewhere, such as optimizing fabric cutting patterns to minimize waste or using software for more accurate demand forecasting to avoid excess inventory. Some manufacturers are adopting 3D printing to reduce waste.
The fashion industry accounts for about 10% of global carbon emissions, partly due to long supply chains. Synthetic fibers like nylon and polyester, derived from plastics, release greenhouse gases during manufacturing and can take up to 1,000 years to decompose. Fast fashion’s reliance on these fibers exacerbates the problem.
Discarded synthetic garments in landfills leach microplastics into oceans as they degrade. The Changing Markets Foundation notes the fashion industry also consumes vast amounts of crude oil—more annually for textile production than Spain uses for all purposes.
Brands can reduce their carbon footprint by using sustainable fabrics like organic cotton, cork, and recycled materials. Factories can improve energy efficiency with better insulation and machinery, and switch to renewable energy where possible. Reducing packaging and optimizing logistics with electric vehicles also help.
An estimated 92 million tons of clothing are discarded globally each year. Some luxury brands have made headlines for burning millions of dollars worth of unsold goods to protect brand value, a practice that pollutes the air and releases methane. Solutions include upcycling unsold stock into new items, partnering with textile recyclers, donating inventory, or adopting made-to-order production models. Micro-factories using automation can produce items within 24 hours of an order, reducing waste.
To keep prices low, many fashion brands manufacture in developing countries where workers earn poverty wages under harsh conditions. The documentary *The True Cost* estimates that less than 2% of the industry’s 75 million factory workers worldwide earn a living wage.
Advocacy groups demand brands answer questions about their sourcing and practices. However, tracing a garment’s origins is complex, involving data from farmers, factories, and logistics providers across the globe. Voluntary transparency may soon become mandatory; for example, New York’s proposed Fashion Act would require large brands to track and report supply chain sustainability data.
Digital technology and social media have accelerated fast fashion and overconsumption. However, technology also offers solutions: 3D digital fitting reduces returns, data analytics improves demand forecasting, and social media can promote sustainable fashion.
A shortage of skilled workers challenges progress. The World Economic Forum reports less than 1% of clothing is recycled globally, partly because recycling requires workers skilled in disassembling garments made of multiple materials. Brands also need designers and artisans capable of upcycling or remanufacturing products.
Achieving a sustainable future for fashion requires data transparency for both industry players and consumers. Manufacturers need data on suppliers’ environmental and social practices, while consumers need accessible information on product impacts.
An Oracle survey found 52% of U.S. consumers say a retailer’s brand values, including commitments to sustainability and ethical sourcing, aligning with their personal values is very important. Brands that invest in sustainability and demonstrate improvement through data can differentiate themselves and win over retailers and consumers.