Is it possible to create a clothing brand that is both

environmentally and economically sustainable

in the current fashion culture and economy?

Ari Liberman
Senior Project Advisor: Roxy McKnight

Abstract:
This topic is important because the apparel industry is the second largest polluter worldwide,
following oil. Our consumer habits shape the way companies design and advertise their products
and thus prioritizing sustainability will help us move towards industrial change. This issue
impacts not just those who have interest in fashion; but everyone, as we all depend on the Earth’s
natural resources that the apparel industry is polluting and depleting. I studied the relationship
between environmental and economic sustainability within the business model of an apparel
company. The problem my research is trying to solve is the unsustainable production and
distribution habits of the fashion industry; that are not only extremely wasteful but also having
significant environmental impacts worldwide. I used my research on sustainable companies and
industry leaders to form my answer. One of the largest trends that I found in my research is that
many companies have yet to embrace more sustainable business practices due to the high cost
and complexities it introduces to a business model. This research draws on sources from industry
experts, fashion industry leaders, and scholarly articles/research papers. I found that by properly
sourcing materials and manufacturers as well as careful planning of business expenses it is
possible to create an economically and environmentally sustainable apparel company. Long-term
implications of sourcing green or more sustainable products include; driving both value creation
and customer centricity, as it helps companies appeal to the rapidly growing consumer market of
environmentalists, with a demand for sustainability. And most importantly helping the apparel
industry significantly reduce its impact on the environment.

12th grade Humanities

Animas High School
April 3, 2019
 Part I: Introduction

The fashion industry is valued at an estimated $2.4 trillion with an increase of 5.5%

yearly (Amed, Berg, Brantberg, Hedrich 1). It employs thousands of individuals and uses

massive amounts of natural resources to produce, manufacture and distribute its products. The

following statistics provided by eco-fashion activist Emily Webster give perspective to why all

people have a stake in the practices of the fashion industry. “The apparel industry is the second

largest polluter in the world besides oil. In order to produce a single t-shirt, it requires 2700 liters

of water; about the same amount of water that the average person would consume over 900

days,” (Webster 17). It is no wonder that there is more motivation than ever before to incorporate

sustainable business practices in the fashion industry.

The appeal and intrigue of fashion are everywhere. Some people view clothing as a way

to express their individuality, status, or artistic flair. Others see clothing as utilitarian, a necessity

and nothing more. Those who value fashion are willing to pay large sums of money for labels,

perceived status, prestige and artistic expression, making fashion a multi-trillion dollar industry.

To date, there is little evidence that the fashion industry has embraced sustainable business

practices in more than a limited way. Besides a few companies (Stella McCartney, Patagonia,

Gucci) this industry has not addressed or attempted to incorporate nearly enough sustainable

business practices in a systematic way. This paper will explore that topic, the intersection of

high-end fashion and sustainable business practices.

Is it possible to create, produce and operate a sustainable fashion line? The answer to that

is yes and the topic of this paper (and if possible, my final goal) is to determine whether or not it

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is feasible to start and operate a luxury fashion/apparel business that is capable of being both

economically and environmentally sustainable (eco-friendly). And if so, how? If not, why not?

This is an important topic because the huge financial industry that is fashion also

consumes an inordinate amount of natural resources. It is a growth area for entrepreneurs who

are passionate about design, fashion and the arts to combine those interests with sustainable

practices. There are major incentives and opportunities for companies willing to invest in

sustainable fashion

By properly sourcing materials and manufacturers as well as careful planning of business

expenses it is possible to create an economically and environmentally sustainable clothing brand.

Part II: Historical Context and Background

Fashion, much like art, is something we as humans have valued in one form or another

for thousands of years. Commerce and trade are historically significant human practices that

have facilitated the human desire for novelty, fashion, innovation and enterprise. People have

historically been open to paying large sums of money for items they consider fashionable, but

only in the last 20-30 years has there become a market for environmentally friendly and

sustainable products (eco-fashion, eco-conscious fashion). Since there have been few companies

that can truly be called high-fashion and sustainable, there is limited data on how successful this

approach can be industry-wide.

Balancing the desire for sustainable, high-end fashion with the need to make corporate

profits introduces many complexities to a business model. Buying eco-friendly or sustainably

sourced materials and fabrics can be far more expensive than buying less eco-friendly mass

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produced fabrics or articles of clothing. This is why many ‘fast fashion’ companies have

production habits that are much less eco-friendly; such as buying cheaper and less sustainably

sourced/environmentally friendly fabrics, and outsourcing to countries with fewer labor and

manufacturing laws. Eco-conscious companies must maintain corporate reputations of being

ethical, environmentally-friendly, financially strong and fashionable, which can be a lot to ask of

a company, especially one that is just starting up.

Ensuring manufacturing processes are environmentally sustainable across the entire, or

portions, of the manufacturing process will increase costs (i.e. proper use and/or disposal of dyes

and other manufacturing by-products). Shipping and distribution of products can also use many

environmental resources. Paying workers a decent living wage rather than outsourcing to foreign

countries (sweatshops) where labor laws are much more lenient, is more expensive. High-end

(fashionable) clothing changes seasonally. Designers typically encourage consumers to buy new

clothes each season. This, in theory and practice, goes against the very idea of sustainability.

This is an issue that affects everyone, whether they realize it or not. Businesses,

economists, the fashion industry, shareholders, environmentalists, entrepreneurs, clothing

designers, artists, sweatshop workers, consumers and manufacturing companies all have a stake

in the practices of such a huge industry.

Key terms/definitions:

● Environmentally Sustainable - Environmental sustainability can mean many different

things in the context of a business, but generally this means finding sustainably or green

sourced materials, supporting initiatives to reduce waste such as recycling fabrics, as well

as proper disposal of manufacturing by-products.

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 ● Economically Sustainable - this means a business has a wide enough profit margin that

the business entity can depend on in order to sustain the current and future financial

needs of the company.

● Fair labor practices - United Nations Article 23 says that individuals are paid a fair wage,

work in a safe environment and are allowed to negotiate the terms of their employment,

among other things.

● Corporate Social Responsibility (CSR) is generally a team within a firm or company

responsible for making sure the company’s manufacturing and distribution processes are

as ethical and eco-friendly as possible.

● Value Proposition - In the context of marketing, means an innovation, service or feature

intended to make a company or product attractive to customers.

● Value Creation - The primary aim of any business entity. Creating value for customers

helps sell products and services while creating value for shareholders, in the form of

increases in stock price. Insuring the availability of investment capital to fund operations.

● Customer Centricity - Customer centricity, or client centricity, is an approach to doing

business that focuses on creating a positive experience for the customer.

● Capability Evolution - Gradually getting better at the capabilities your organization has.

Part III. Research and Analysis

In exploring successful financial practices in the fashion industry it is important to

understand a few key terms. Starting with economics, many brands are able to find success by

focusing on value co-creation and customer centricity in their business models. A good example

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of value co-creation is how Coca-Cola, an industrial giant, has marketed their product to take

advantage of both value co-creation and adaptive pricing in their business model. Niraj Dawar

shares an example of consumers happily paying a 700% price premium for a cold can of soda on

a hot day. The company is capitalizing on its name brand to ensure higher earnings for its

stockholders. Many companies seem to do this seamlessly, for example Supreme has not yet

approached this high a level of brand recognition, but it is still able to capture value for its

products far more than they are worth, simply for the Supreme logo. When someone buys

Supreme clothing, they are paying top dollar for the brand name. For example, a basic hooded

sweatshirt with a logo printed on the front, a BOGO (box logo) hoodie, retails for approximately

$1,100, if any are available. Supreme customers are just happy to get the items, regardless of

price. Supreme achieved this level of brand recognition by limiting the quantity of it’s products,

since it does not mass-produce clothing and markets its items as very exclusive and hard to find.

This marketing strategy has proven to be very powerful, raising the value of their clothing.

This shows the value of brand name recognition, which raises the question “what holds

more value for a company, all of its physical assets, or its brand name?” It seems that any large

company’s assets would hold more value than its brand name. “When Marketing is Strategy” by

Dawar explains the importance of brand recognition. Dawar uses an example of a thought

experiment comparing what would happen if all of Coca-Cola’s physical assets burned to the

ground one night versus if all of Coca-Cola’s customers woke up with amnesia and didn’t know

what Coke was. In the first example, Coca-Cola would have no problem raising funds to begin

producing products and get back in business again, the fire would be a setback but not shut them

down. If seven billion customers did not have any idea what Coca-Cola products were, the

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company would have a very difficult time finding resources to restart their business. It turns out

that the loss of its name-brand recognition, its consumers connection with the brand, would be a

bigger setback (Dawar 13). This is a good example of the value of brand recognition and it is

comparable to the name recognition enjoyed by brands like Gucci, Patagonia, Supreme and

Off-White.

Off-White is a luxury clothing brand that markets itself in a very intentional way to

attract a particular consumer type. Off-White promotes itself as luxurious, edgy, and innovative,

combining unique one-of-a-kind design style with quality hand-crafted clothing, and thus it

attempts to attract an affluent customer. Off-White clothing is also produced in small batches

rather than mass produced, helping them sell out of new items very quickly after releasing them.

This helps them sell their image of luxury and exclusivity, driving up the retail value of their

clothing. Off-White clothing tends to cost 200-400% more than the price of the same item

produced by a smaller, off-brand company. Its marketing is very powerful in the way it

influences its customers to buy into the luxurious image that Off-White is selling; and impels its

customers to spend much larger sums of money on items that traditionally have held less value

than their marketed price. While this particular niche has helped Off-White emerge into the

mainstream scene of the fashion culture, it is not clear if its customers would care about the

company’s commitment to sustainability. With no customer calls for them to take on more

sustainable practices, Off-White would have to see the social and environmental reasons for

doing so, which they have not discussed publicly.

Some designers prioritize sustainability in their companies and are well-known for their

ethical practices. Stella McCartney is one of the most famous eco-conscious designers. She

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designs environmentally sustainable, often vegan, shoes and clothing. In an interview with

Vogue’s Emily Farra, McCartney said:

I’m hoping what will happen in 10 years, is that people will look back at the fact that we

killed billions of animals and cut down millions of acres of rainforest, and [used] water in

the most inefficient way—we can’t sustain this way of living. So I’m hoping people will

look back and say, ‘Really? That’s what they did to make a pair of shoes, seriously?’ If

you’re lucky enough to have a business on this planet, you have to approach it in this

[sustainable] way. (2)

There are many complex factors that come into play when starting up a clothing

company, this is complicated further when considering more sustainable practices. Besides

researching advertising campaigns from designers and clothing companies that have superior

aesthetics and are enormously popular, researching and analyzing what sustainability is and what

it looks like in current business models is critical. Learning about sourcing, business planning,

operations, advertising, business strategy, sustainability and the many ways that a marketing

campaign shapes the consumer’s view of a company are critical research components, and

provide a more thorough understanding of the different ways companies appeal to different

consumer types.

Research has shown how difficult it can be for businesses that have tried to implement

more sustainable, or “green” practices. Sustainability is just starting to become trendy as

consumers become more environmentally conscious. This type of costly change takes time,

effort and money. One of the many reasons that “green” businesses struggle to compete in the

marketplace is the high cost of running a more environmentally sustainable business.

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 Given that the first rule of trading is buy low and sell high, this can make sourcing the

materials necessary for production of an eco-clothing line prove to be a very perplexing

challenge. Looking at this from the viewpoint of an economist who has little inside knowledge of

the industry, a reasonable person would come to the conclusion that sourcing cheap materials

would be the more economically-sustainable model. The defense for this argument being that

sourcing the cheapest possible materials increases the maximum profit margin, while reducing

the amount of time that the product will maintain its value for before it breaks down. In this

model the consumer will be taken advantage of time and time again as they continue to spend

money on products that are not built with quality, that quickly degrade and need replacements.

The problem with hastily making decisions on sourcing materials is that they tend to be a

reflection of what your business values. For help with this decision I looked to Patagonia; a

company well-known for environmental activism and passion for sustainable innovation.

In Patagonia’s model they have utilized an essential part of any marketing campaign,

value co-creation. Patagonia accomplished this by holistically analyzing their customer base and

targeting their public relations, marketing, and products towards a particular consumer type.

Patagonia pinned their “ideal consumer” as someone who values having intense and beautiful

interactions with nature, who value quality and sustainability, and thus Patagonia can source

their products, and shape their public image to appeal to their ideal consumer. Many consumers

are willing to spend more on products that reflect their values, “clean” products often cost more

(Hepburn 2). At some point a company must decide what values they will reflect with their

product. Patagonia has done that. According to Helena Barbour, Business Director of Sportswear

at Patagonia, when the company thinks about what eco-friendly means, it asks in-depth

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questions, these are just a sampling:

It includes the way your clothing is dyed and how the waste water is handled. What are

the working conditions in those factories? Are the workers who make your clothing paid

a fair wage? Is your clothing high-quality or does it fall apart after a few wears? How

transparent is the brand whom you purchase your clothing from? Does that company

offer you a way to recycle or repair your garment? These are just a sampling of the

questions that go into what eco-friendly means. (Webster 1)

The lack of initiative to create more sustainable or green business practices within the

fashion industry is largely because it is too costly/impractical. For example, the cost of

outsourcing manufacturing and printing of a specific t-shirt to China, costs $130 for 100 t-shirts

($1.30 each), just a small fraction of what it would cost to manufacture and produce the same

amount of the same t-shirts in the US, not to mention the significantly higher cost for more

sustainable or green fabrics. We are just beginning to enter the stage of sustainability as fashion,

and thus more companies are beginning to explore ways to go green, or invest in more

sustainable energy.

In the article “Sustainable Fashion Starts With Ethics and Design,” Barbara Gongini,

discusses her inside perspective on sustainability in the world of fashion. Gongini, a sustainable

fashion designer, shares the following criterium for sustainable fashion:

● Countering fast, cheap fashion and damaging patterns of fashion consumption.

● Defending fair wages, working conditions, and workers’ rights.

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 ● Supporting sustainable livelihoods.

● Using and/or developing eco- friendly fabrics and components that people like. This is

important because of the toxic pesticide and chemical use in some clothing and materials.

● Minimising water use.

● Recycling and addressing energy efficiency and waste.

● Developing or promoting sustainability standards for fashion.

● Resources, training and/ or awareness-raising initiatives

towards animal rights.

Companies that can understand their consumers wants and needs are most often those in

positions of power. The reality is that the average consumer knows much less about what they

want, than the average manufacturer knows about the consumers’ interests. Steve Jobs comment

when asked about what market research Apple did for the Ipad, sums this concept up well:

“None. It’s not the consumer’s job to know what they want” (qtd in Dawar 4). This highlights

the importance of marketing to from a company’s perspective. This quote reflects the importance

of a company defining its customers needs, or in other words telling the consumer what they

want or need. This influential marketing practice could be used in marketing and promoting the

value of sustainable clothing. Perhaps it is easier and even more effective for a company to

define the consumers purchase criteria rather than research the purchase criteria for a particular

consumer group.

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 Part IV: Conclusion

The implications of sourcing green or more sustainable products inherently drives value

co-creation and customer centricity as it helps companies appeal to environmentalists. Currently

the average consumer is becoming more and more concerned with environmentally friendly

practices than ever before. Going forward, it is only to be expected that there will be a revolution

of sustainable companies and products as sustainability and eco-fashion are beginning to become

more actively sought after by the consumer. Long-term implications of employing more green

and sustainable practices include reduction in pollution, as previously stated; the apparel industry

is the second largest polluter following oil and gas.

The research suggests that it is indeed possible to create a company that is both

environmentally and economically sustainable. Although my findings were that although it is

possible, it is still more costly to source entirely sustainable products and materials. While this is

still an uphill battle, their is room for growth by educating consumers on the destructive toll the

fashion industry has on our environment, and how making even small changes is our consumer

habits can have a large impact. Thus supporting eco-friendly companies is worth the small

additional cost. Several companies have found success within this niche as many consumers

value environmentally friendly companies, with ethics that they can support. Many consumers

who hold these particular values are willing to spend more money to support companies with

ethics that they can feel good about. As we as consumers begin to be more eco-conscious,

companies must begin to appeal to these ethical and environmental needs in order to target this

rapidly growing consumer market. Typically, consumers like to support causes that they can get

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behind and thus are much more likely and willing to spend a little more money on their clothing,

if they value the ethics and eco-friendliness. This emerging trend of sustainable fashion will

continue to grow exponentially as its consumer group continues to grow. Many companies are

finding innovative ways to incorporate more green or sustainable practices, as we continue to

strive to reduce the impact on the environment created by the fashion industry.

Further research that needs to be done: focus on developing more sustainable ways to

produce and source materials, at an affordable cost, which will take time. But, as we begin to

ease into the culture of sustainability as fashion, the fashion and clothing industries must

revolutionize in order to keep up with the increasing demand for sustainable, yet fashionable,

products, as well as more eco-conscious companies. Providing employees with proper working

conditions, wages, and healthcare are important pieces of an economically sustainable business

model. As we begin to enter the age of sustainable innovation, more and more new sustainable

technologies will begin to be implemented. My hopes are that with time, dedication, and hard

work, these dreams of a more sustainable future, and promoting a culture of anti-consumerism

will bring about some sort of noticeable difference.

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 Work Cited

Amed, Berg. “The State of Fashion 2017.” ​McKinsey & Company​, Dec. 2016,
www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion​.

Dawar, Niraj. "When Marketing Is Strategy." Harvard Business Review. Dec. 2013. Harvard
School Of Business. 20 Jan. 2019 <​https://hbr.org/2013/12/when-marketing-is-strategy​>.

Farra, Emily. “Stella McCartney Discusses How Sustainable Fashion Can Be Sexy and ‘How
Technology Can Save Us.’” ​Vogue​, Vogue, 12 Oct. 2017,
www.vogue.com/article/vogue-forces-of-fashion-stella-mccartney-sustainable​.

Gongini, Barbara I. “​What It Means to Be a Sustainable, Ethical Fashion Brand - Barbara I

Gongini​, 27 Oct. 2017, barbaraigongini.com/universe/blog/sustainable-fashion-design/.

Hepburn, Sharon J. “In Patagonia (Clothing): A Complicated Greenness.” Fashion Theory: The
Journal of Dress, Body & Culture, vol. 17, no. 5, Nov. 2013, pp. 623–645. EBSCOhost,

O’Rourke, Dara, and Strand, Robert. “Patagonia: Driving Sustainable Innovation By Embracing
Tensions.” California Management Review, vol. 60, no. 1, Fall 2017, pp. 102–125.

Prasad, Rahul. “What Is the Biggest Challenge Facing Sustainable Fashion Today?” ​Inhabitat​,

Ecouterre, 8 Oct. 2009,

inhabitat.com/ecouterre/what-is-the-biggest-challenge-facing-sustainable-fashion-today/.

Schneckenberg, Dirk & Velamuri, Vivek & Comberg, Christian & Spieth, Patrick. (2017).
“Business model innovation and decision making: Uncovering mechanisms for coping
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Terech, Andres. “An Introduction to Marketing and Branding.” Generations, vol. 42, no. 1,
Spring 2018, p. 45. EBSCOhost,
search.ebscohost.com/login.aspx?direct=true&db=f5h&AN=129298598.

Webster, Emma Sarran. “Why You Should Actually Care About Eco-Friendly Fashion.” Teen
Vogue, Teen Vogue, 2 Nov. 2018,
www.teenvogue.com/story/eco-friendly-fashion-explainer​.

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