The paradox of fashion sustainability

The Luxury industry's downward spiral has not only sent the executives of the big conglomerates into panic mode but has also put extra pressure on big brands to review their strategies. Most household names have now realized that if they want to maintain their hard-earned position, something needs to be changed. And with all the buzz and panic of the luxury crisis, everybody seems to have forgotten about the great green revolution that never came. The implementation of sustainable production policies remains a central aspect of the entire fashion supply chain, colliding directly with the overconsumption attitude of society as a whole, in constant search for lower prices. The 2025 State of Fashion Report highlights a rather paradoxical future. Given steady profit growth, there seem to be no worries, but this year's report reveals a fearmongering factor among customers: we face “challenges at every turn”. In fact, from what the report states, more and more customers seem scarred by the high inflation times we have lived in the past couple of years, and everyone is becoming increasingly price-sensitive. The acceleration of climate change is, unsurprisingly, prompting what in the report McKinsey calls a “time of reckoning” for many brands. What does that entail?

Since COVID-19 hit, the most common sentiment among fashion leaders has been “uncertainty”—and that remains the case for 2025, as stated in the BoF report. The number one concern in 2023 was inflation, followed by geopolitical instability in 2024. However, for the first time in years, the top concern for 2025 is consumer confidence and their willingness to spend, with 7 out of 10 fashion leaders agreeing this is the primary risk for the coming year. This sentiment is reflected in what executives expect to drive their growth in 2025: volume over price. Consumers are tired of price increases, and brands are aware of this. Yet executives continue to prioritize sales growth over cost improvements. Why is that? One reason could be the growing awareness of the climate crisis, particularly within the fashion industry. According to the report, 63% of brands are behind on their decarbonization goals set for 2030: if brands actually want to meet these sustainability targets, they must take action. Executives are calling for a “dual mission” that involves committing to sustainability initiatives while pursuing profitability through collective industry action. Seemingly, brands are more keen to look into their supply chain and potentially restructure it, to avoid “just raising prices”; this is a crucial part of the report and something we will see happening across the board. The most alarming projections show that if consumption continues at its current pace, apparel could account for more than a quarter of the world’s carbon budget. While brands and the industry move toward change, what about consumers?

A particularly interesting part of the report focuses on the shifting values of customers. Rising prices and macroeconomic pressures have driven people to adopt more cost-conscious behavior. After the continuous issues with high inflation and rising prices, consumers are frustrated with paying extra for the same products. According to the report, this has pushed them towards segments of the market that offer strong value-for-money propositions, such as outlets and reselling platforms. Matter of fact, seventy percent of consumers plan to continue shopping in outlets and off-price retailers over the next 12 months, even if their purchasing power increases. From a sustainability perspective, this trend seems promising, but only if consumers truly shift their focus to outlets and reselling. However, the report highlights a disconnect between consumer values and their actual behavior. A UK survey reveals that over 50% of consumers who want to save money and avoid fast fashion have also purchased from fast-fashion retailers in the past 12 months. This reflects an “action-intention gap,” where consumers claim they want to avoid fast fashion, but in practice continue to rely on it. However, 61% of US and UK consumers still rank price as more important than sustainability in their fashion purchases. Therefore, we are faced with a paradox.

The paradox is that apparel consumption is rising, and carbon emissions are increasing proportionally. This forces brands to take action and adopt more sustainable production practices. Doing so will require most brands to significantly change their facilities and production methods, likely involving heavy investments that will drive up prices. On the other hand, consumers are more concerned with affordability than supporting sustainable products and are unwilling to spend extra to help brands transition toward a more sustainable future. Large fashion corporations are the drivers of change, but how can executives justify a significant loss of profit, potential downsizing, and layoffs when consumers are not willing to meet them halfway? And are we really staring down the barrel of being responsible for more than a quarter of the world's carbon budget? Looking at the landscape portrayed in the report, we see potential solutions in a supply chain restructuring or collaborating with companies using more sustainable energy sources. The situation highlighted by the report suggests a conflict of strategies. With the current strategic model (volume over price), it is clear that implementing sustainable policies would only make prices rise. And that is precisely the problem. So by changing the latter and prioritizing the effectiveness and sustainability of the different steps of the supply chain, brands could even reduce excessive production. The same production that nowadays results in millions of unsold goods dumped in off-price outlets and discounts. Perhaps the solution to reinstate the natural balance of the luxury scene lies within the supply chain, while also practicing sustainability. Fewer volumes equal cost improvement.