Apparel retailers gearing up for climate-conscious consumers haven’t found them yet.
From Bloomberg March 15, 2023:
In its 2021 annual report, Swedish retailer Hennes & Mauritz AB identified one trend as a “high” risk to its business for the first time, higher-risk even than increased energy costs or availability of raw materials. Should consumers increasingly prefer “products and services with low climate impacts from trusted companies that are seen as leaders in sustainability,” H&M wrote, the company might see a negative impact. If H&M were not seen as a climate leader, it could face “reputational risks related to brand perception.”
H&M brought the subject up again a few pages later, this time in sunnier terms: “There is an opportunity,” the report noted, “for H&M Group to attract more customers by providing a more sustainable and transparent offering.”
As recently as 2018, H&M didn’t list sustainably-minded shopping as a risk at all. But the past few years have seen tough feedback for fashion companies that push the limits on how quickly they can churn out clothing and accessories, alongside demands for more transparency. Retailers like Shein, H&M, Zara and Boohoo have been repeatedly dinged by consumers, activists, the press and public officials for their mounting climate, water, and plastic pollution footprints, for labor conditions and for greenwashing. Meanwhile, report after report shows consumers signaling more focus on the environment when it comes to purchasing decisions. In one 2021 survey, for example, two thirds of US consumers said they would pay more for sustainable products.
But people don’t always shop their values. For all the talk about shifting shopping patterns, there is no clear quantitative evidence of any demographic ditching fast fashion en masse — not even environmentally conscious Gen Z. That leaves retailers whose business model relies on fast fashion to size up the threat against it in their annual reports, sustainability reports and climate disclosures, where little consensus exists. It’s clear that shopping habits could change, but no one is sure how, when or if a more climate-conscious consumer will be good or bad for business.