If the fashion world wants to have less of an impact on the planet, the best solution would be to produce less. But well-known brands still seem to think sales can keep ticking up as usual.
Global fashion chains are starting to talk about a radical overhaul of the clothing business.
Hennes & Mauritz chief executive Helena Helmersson told climate-action group Race to Zero last month that there needs to be a "different approach to how fashion is designed, made and used."
The boss of Zalando, Europe's biggest online clothing retailer, said in a recent interview with the Financial Times that "fast fashion" -- where clothes are made and sold cheaply in huge numbers only to be disposed of after a handful of wears -- must be abandoned within a decade.
Yet Zalando itself has plans to triple sales by 2025. H&M wants to increase revenues by 10% to 15% a year over the long term.
As they have not said they would raise prices, growth is likely to come from higher volumes of clothing.
Primark, a low-cost retailer that sells more than a billion items a year, wants to make its products more environmentally friendly without charging consumers more.
Fashion already has a big waste problem: Roughly 100 billion pieces of clothing are made every year, of which more than 50 billion are incinerated or sent to landfill within 12 months of being bought, according to a UBS report. To fix this, brands want to become more "circular," which would involve changing every part of the fashion supply chain.
One focus is raw materials. Brands are trying to cut the quantity of virgin materials that go into making petroleum-derived fabrics like polyester. Extraction of these source materials needs to slow down from annual growth of 3% today to 1% to be sustainable, according to Textile Exchange.
That will be costly: The spot price of the main ingredient for recycled polyester, recycled PET, has almost doubled so far this year in Europe, data from S&P Global shows -- one reason Primark expects higher commodity bills as it shifts to more sustainable materials.
Clothing recycling rates also need to be increased quickly. Today, less than 1% of used garments are turned into new ones. Current technology isn't up to sorting and reclaiming mixed fibers like polyester blends. Clothes need to be designed differently to make sure they can be recycled at the end of their life.
The infrastructure to collect garments is underdeveloped, although brands are making an effort. Of the 450,000 tons of goods that Zara's owner, Inditex, put on the market in 2020 -- it is one of the few big fashion companies that discloses how much it sells in volume terms -- just 3% was collected back from shoppers.
One of the fastest ways to cut the fashion industry's carbon output would be to encourage shoppers to wear their existing clothes more.
Getting twice as much use out of a garment would reduce the sector's emissions by 44%, according to the Ellen MacArthur Foundation.
A handful of clothing companies are discouraging shoppers from constantly refreshing their wardrobes, such as Levi's "Buy Better, Wear Longer" campaign, launched in April of this year, or Patagonia's "Buy Less, Demand More" ad.
If shoppers take notice, more mainstream fashion labels might struggle to meet their growth targets, considering their resistance to raising prices.
Zalando, Primark and Inditex square this circle by saying that they will take market share from less sustainable competitors. This will be challenging, especially for very cheap labels such as Primark that are associated in consumers' minds with disposable fashion.
Investors are shopping around for sustainable alternatives to the big chains, but haven't found the perfect match.
The market debuts of companies that specialize in selling secondhand clothing or fashion-rental services have been disappointing. Used-fashion retailer Poshmark's shares are down more than 40% from their listing price.
These recently listed companies do still fetch a premium. Poshmark's stock trades at 4.6 times expected sales and rival ThredUp's fetches 6.4 times.
The business models aren't always comparable, but this is much richer than old-school brands such as Levi's and H&M, which trade at less than two times, and online-only fast-fashion retailers such as Zalando and ASOS.
Investors might see companies that don't rely on new production as more in line with consumer trends and hence less risky.
Big brands are launching rival platforms where their own clothes can be resold, such as H&M's COS Resell, as well as adding dedicated sustainable collections. But these are a minority of overall sales. Growing bigger and greener at the same time will be a hard look to pull off.
