Raw materials constitute up to two-thirds of a brand’s climate impact. Brands that act now to secure sustainable raw materials stand to gain an average net profit increase of 6 per cent over five years, according to a report titled ‘Sustainable Raw Materials Will Drive Profitability for Fashion and Apparel Brands’ conducted by Boston Consulting Group (BCG) and in association with Textile Exchange and Quantis.
The findings also reveal that just 15 per cent of luxury brands currently comply with all the guidelines of a flagship sustainability-linked regulation, putting up to 8 per cent of their earnings before interest and taxes (EBIT) at risk.
The report proposes a six-point materials strategy for brands, focusing on traceability, science-backed approaches, diversification, triple-win business cases, strengthened supply chain relationships, and ingrained organisational knowledge and tools.
Failure to act could see the demand-and-supply gap for sustainable raw materials rise to as much as 133 million tons by 2030, affecting both the industry and the planet.
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