Today’s environmental breakthrough – also known as sustainability – sets the tone for tomorrow’s big companies.
Many businesses have taken the strategic view that embracing and adjusting to this new environment is necessary for better results, more reliable cash flow, and higher valuation growth. They see growing signs of resource shortages, a demographic increase, climate change and convert it into a business opportunity to balance the threat.
Even earlier than the pandemic, pure disasters such as Australia’s wildfires increased client pressure on companies in different segments. They triggered warning bells about the genuine corporate risks faced by local weather-related disturbances.
As a result, various luxury companies have been expanding their investments in sustainable technology or accessing the space for the first time this year. Ralph Lauren and Lululemon are among the companies that have joined the H&M Group, Kering, and Chanel, to spend investment in technologies that could reduce the industry’s environmental impact.
In 2020, Ralph Lauren Corporation announced its Investment in Leading Sustainable Material Science Startup Natural Fiber Welding. Through this investment, Ralph Lauren looks to expand its use of recycled post-consumer cotton, helping to advance the Company’s progress toward sourcing 100 percent of its key materials, including cotton, by 2025 and integrating zero-waste principles across its business.
In the meantime, H&M also moved into recycling applied sciences, representing the company’s goal to become 100% circular. This investment ensures that uncooked materials are obtained from recycled and organic sources; the fabric is crafted with recyclability and waste in mind and produced using green resources. Clothing life is increased by resale, leasing, and take-back programs.
Chanel took a minority share in the silk-based textile efficiency producer Established by Nature in June 2019. In the meantime, Kering is actively partnering with a total of 119 sustainability-based start-ups based on the Chief Sustainability Officer’s strategy, Marie-Claire Daveu. Its contributions range from partnering on pilot projects to extra-standard minority funding.
Whereas uncommon access to mature applied sciences or innovative supplies with minimal supply will undeniably give manufacturers an aggressive advantage, there is also a growing awareness that none can do it alone.
Suppliers are also working extra carefully with distributors to incorporate new applied technologies into the supply chain, finding the opportunity for stronger collaborations in an unequal relationship that the pandemic has severely broken.
Finally, the main objective of companies looking to pour resources into profitable start-ups is—like a few investors—searching for profits. However, many try to pass the stabilization sheet before agreeing on targets. There are disproportionate priorities for strategic investments that allow companies to outsource their sustainability research and improvement or promote critical industry-wide cooperation by putting together various stakeholders.
With consumer behavior-altering and the pandemic twisting of the fashion industry, Millennials and Gen Z are more than ever involved in sustainability and substantive social change.
This shift is going to be a challenge for the major brands that won’t act upon this.
For businesses with enough discretionary money to spend right now, these are bets that can pay off in the long run and, more specifically, make for excellent marketing.