You Have To Be Sustainable To Survive In The Market

 

You Have To Be Sustainable To Survive In The Market

Lakshay is an advisor to a local politician, who is about to stand for a State election. He believes his candidate is looking to help people at the grass roots level in a State where cotton farming is an important industry. He has been tasked to develop a policy that will both increase short term economic benefits for the poor, but also have an eye on long term prosperity for the State.

Lakshay is at a quandary. If he advocates strong economic growth policies where low costs are important to attract investors and buyers, it is likely to lead to longer term issues such as land deterioration, toxic working conditions and unethical practices such as child labour. If he advocates strongly regulated industries, investors and buyers simply won’t come.

Who has to be sustainable?

Even though they may have great PR and advertise that sustainability matters to them, brands do little to actually implement their marketing. In addition, their customers also have little interest in the complexity of the supply chains that eventually spew out their cheap, ready-to-wear, ready-to-garbage garments. Consumers say they would pay a little more so that their clothes are manufactured more ethically, but then do nothing about it.

It is the manufacturers themselves that need to become more sustainable, as it is their land that is being ruined by chemicals and pesticides, their workers that are becoming ill and dying and their countries that are facing economic hardships that limit the basic infrastructure required to make their nation more prosperous. So when we talk about being sustainable to survive, we are talking to the politicians of the countries that allow the abuse of their people and land. In the long run, current policies will not help your people.

Lakshay understands the solution has to be long term. Any solution needs to include tax breaks for producers, building infrastructure, tackling corruption, and ensuring proper environmental controls and working conditions. However, this is too much to fit into one policy and too difficult to implement at one time.

How sustainable are the textile and cotton industries?

A 2015 report by PAN UK, Solidaridad and the WWF carried out an evaluation of 37 companies “estimated to use the most cotton in their products”. The report focused on policy, use of sustainable cotton in their products and traceability of the cotton. Only eight of these companies scored more than 3 points out of 19.5 with the top mark being 12. Clearly companies need to do better.

However, there is some good news. “Production of more sustainable cotton has never been higher, reaching 2,173,000 tonnes in 2014, or 8 per cent of the global supply”. In 2015, the market share was expected to grow to 13%. However, of this share, “only a fifth is actually sourced by companies for their products”. Large companies could do more to help sustainable cotton growers by sourcing from them.

You Have To Be Sustainable To Survive In The Market

Lakshay determines the best way to push reform is to include producers and buyers. He can provide tax breaks, but companies will then be tied to certain environmental standards and improvement of working conditions. Though the State is unlikely to be able to enforce a number of the laws he proposes, he will propose a number of laws by which companies must abide if they are to receive the proposed tax breaks.

What does it mean for the workers?

According to the PAN UK report, “40 million cotton farmers in developing countries produce three-quarters of the world’s cotton…where more than 100 million families are directly engaged in cotton production, and a further 250 million in farm labour and primary processing”. With the use of pesticides and GM seeds, and dyes and production processes that release toxins into the drinking water, these people are directly exposed to toxins that can lead to birth defects, illnesses and death.

Lakshay proposes to go further still. He has a broader vision where the country is not thought of as a cotton producer, but as a brand of cotton producer. His idea is to promote the country as a source of sustainable and ethically produced cotton. A company can then state that they sourced their cotton from his country rather than showing the whole supply chain, and that would be seen as the stamp of quality.

How can companies do better?

The push for sustainability must be top down, so companies need a strong policy that is demonstrably implemented. There are a number of organisations that companies can join that will help them to transform their supply chains so more sustainable cotton is used and traced. These organisation vary in their scope and geographical presence and can aid companies on a number of levels helping to make environmental, social and economic impacts.

It is also important to note that sustainable products do not mean inferior products, as it may have done in earlier years. Albeit too small a market share, more and more consumers are looking to purchase sustainable and ethically produced clothing, so there is a market for well-produced ethical and sustainable clothing. In an interview with Ravi Dhar (Yale University), Yvon Chouinard (founder of Patagonia) stated that “the quality of the products has increased a lot”, as companies have “to learn how to make clothing in a different way”. A lot of that learning has occurred so the product is “equally good to one that’s treated with chemicals”. The R&D costs are now viable on a mass scale.

It would be nice if Lakshay’s policies did exist and they were implemented. Unfortunately, the complexity of his country’s governance and social fabric makes such policies highly improbable. The growth at any cost model is likely to win out every time as economists sermonise about the trickle-down effect without seeing the harm this causes to real families while we wait for the pennies to trickle down. It is left to buyers and the consumers that we began with berating, and market forces, to find a solution in which we stop killing the planet and harming others simply for cheaper goods.

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About the Author

Sukhdev is a British Indian, who has lived and worked in a number of cities including London, New York, Boston, Vilnius, Bogota and Dubai, where he resides with his wife. He currently works to help start-up companies that have a social impact. His latest venture is Chanzez, which will produce (not source) clothing ethically and use profits generated in the production countries solely to fund social impact projects such as school scholarships. Sukhdev is a CFA charter holder with an MBA with top honours from Columbia Business School in New York, an MSc from The London School of Economics and a BSc (Hons) from Aston University in Birmingham, England.

One thought on “You Have To Be Sustainable To Survive In The Market

  1. I am a reseller of sarees. I need to contact direct to Nakshi Kantha workers or any such manufacturing unit. Can you please provide details ??

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