ASSESSMENT Critical Analysis Assessing the Linkages between Marketing & Management for Sustainability Subject Coordinator: Malliga Marimuthu Lecturer: Tariq Halimi Table of Contents Introduction Global warming is the most urgent emerging problem that scares the existence of creatures and the living of human beings on this planet It is undeniable that this has resulted from the rapid development of urbanization and the endless consumption demand The textile and clothing industry which is an essential part of daily life, is the second giant cause of environmental issues, just after the oil industry (Sweeny 2015) At the time when governments, scientists and international organizations are seeking for innovative ideas and solutions in order to lessen the spread of this disaster from different angles, the raising concern of circular economy is perceived as a promising solution to diminish the pressures of sustainability (Ellen MacArthur Foundation) which is a framework allows an economy may be endless restore and regenerate due to good design (Ellen MacArthur Foundation) Gap Inc, H&M, Nike Inc, Stella McCartney, HSBC, and many fashion trademarks have been joining Make Circular Fashion which launched at the Copenhagen Fashion Summit in 2017 as the Circular Fibres Initiative supported by the C&A Foundation and Walmart Foundation (Hendriksz 2018) Members of the initiative would involve in creating interests for society, the environment and business This report will discuss the indication of the circular economy, following by evaluating whether or not the fashion leaders are implementing the principles of circular economy business development and value dimensions Circular economy The circular economy is a possible solution to replace the traditional linear economy (make, use, dispose) in which resources are kept in use for as long as possible while maximizing their values, and after that products and materials can be repaired, reused and recycled at the end of their lives (The Waste and Resources Action Programme) Even though it is a contemporary development in environment solving, the circular economy is built in an old concept - cradle-to-cradle which uses renewable energy instead of non-renewable, and eliminates the waste level and toxic chemicals used through sustainable strategies (the advanced design of materials, products, systems) (Lewandowski 2016) Examples on apparel industry 3.1 Resources issues and the solutions/applications on business context Brands H&M Resources issues Raw materials – microfibres Water management The solutions or applications - Develop the bio-degradable fibers potentially preplace synthetic fibers that - Apply water-efficient equipment to facilitate the operations Energy - Become 100% sustainable by using renewable and sustainable energy across the operations Chemical management Burberry London Raw materials Plastic Chemical management Energy C&A Raw materials Chemical management Water management Marks & Spencer (M&S) Raw materials Chemical management Energy ASOS Raw materials - Adopt "Chemical Management Roadmap" and "Screened Chemistry" to find the best chemicals that safe for human health and environment, and restrict hazardous chemicals - Disregard and ban the use of real fur - Switch from non-renewable to more sustainable on key raw materials - Replace the single-use shopping bags by innovative sustainable packaging - Cooperate with supply chain partners, set an apparent chemicals management - Develop an energy reduction program, also inspire suppliers to increase the use of renewable energy across the supply chain - Consume sustainable materials that use fewer natural resources in the growing and production process, and adheres to human morals, animal welfare, and environmental ethics - Apply "clean factory" approach and work with other organizations to broaden the elimination of hazardous chemicals in the whole industry - Use more sustainable cotton underpins approach which consumed less water to grow than the conventional one - Determine the water consumption and pollution level within and without the production process in three categories by which can find the most feasible solutions to tackle - Use 100% sustainable cotton that is beneficial for humans and the planet - Sponsor the Microfibre Consortium's research to shorten and preclude the releases of microplastic from synthetic materials - Introduce new guidance and best practice for suppliers and involve elements on environmental management - Obtain 100% renewable electricity and to remain carbon neutral globally - Improve the efficiency of energy used in operated stores, offices and warehouses - Practice recycled materials in all products - Progress a specific strategy for departments that use large volumes of synthetic fibers - Stop selling agora, and acquire suppliers to Chemical management Energy ABFRL Raw materials Energy Water management Chemical management follow the animal delivered materials rule - Perform the test of intensity control monthly to ensure the global regulations implied in all products - Consume more eco-friendly chemicals - Replace lighting by low-emission LED alternatives - Use 100% electricity delivery vehicles in the UK and so on - Source sustainable materials from farms and manufacture at factories guarantee environmental and social trustworthiness - Implement the set of 'Guidelines' on product sustainability - Turn into a closed-loop approach which can reduce the overall energy footprint of the product - Adopt innovative technologies, renewable energy, and install efficient equipment to assist the energy efficiency measurement - Apply water-efficient appliances, rainwater harvesting, sewage treatment plan - Replace artificial dyes by pigments and natural dyes that cause fewer negative impacts on human health and environment issues 3.2 The implications of resource loops Brands H&M Slowing - Create a circular design of long-life products that can easily to reuse and recycle - "Take Care" service caring customers' garments and inspire them to extend the utilization period of products Closing - Increase the percentage of recycled materials or sustainably-sourced materials in total materials on products and packaging - Increase the use of leftover textiles in regenerating new fibers or yarns Burberry London - Extend the product - A part of unsellable life by donating the items collection is Narrowing - Reduce the level of freshwater consumption whilst increasing the ability to reuse discharge wastewater and maximizing the use of rainwater - Increase zero discharge of hazardous chemicals in the supply chain and the usage of safer alternatives - Remove real-fur used in all garments unsellable items collection C&A M&S ASOS - The life of unwanted garments that collected from the take-back project may be extended by donating - A repair service is on planned for the introduction in 2025 - Give clothes from Shwopping program a second chance by giving to charity organizations - Use a circular design that lasts longer the useful life of products resold, repaired, reused or recycled instead of destroying - Revaluate the waste of luxurious items and transfer into new products - Refurbish and reconstruct all waste into new items or materials - Reuse and recycle at least three million wearable garments from Shwopping collection each year - Increase post- - Diminish the use of plastic materials in packaging and distributions - Reduce the impacts of hazardous chemicals in every tier - Lessen the water used through sustainable materials - Exclude hazardous chemicals and heavy metals in all products - Reduce the usage of fuel in store delivery - Decline the use of plastic on packaging - Use less of virgin consumer recycled fabric materials in products - ABFRL - A commitment to maximizing utilization of clothing & textile after the collaboration with Intellecap for ‘Circular Apparel Innovation Factory' (CAIF) - Recycle and recharge - consumed water via a water management system - materials in the making process of denim products Replace real fur by faux fur Reduce the carbon footprint by using innovative solutions in the previous section Reduce fossil-fuelbased energy which results in a reduction in carbon emissions Adopt sustainable processes which significantly decrease the negative impact of making products on the ecosystem 3.3 Value dimensions 3.3.1 H&M Value proposition - Manufacture high-quality durable products which can Value creation and delivery - Exploit residual value of resources - Consumers get incentives from the take-back system - Distribute long-product life and cheaper product, Value capture last long, attract consumers those have a limited budget supported by design for durability and repair activities - Consumers are likely to become more loyal as products more durable and cheaper 3.3.2 Burberry London Value proposition Value creation and delivery Value capture - Be stated as the most sustainable luxurious fashion iconic based on Dow Jones Index (Peter 2018), by which can enhance the image and reputation of the brand - Exploit residual value of products - Distribute high-end garment that is sustainable and less harmless for the ecosystem - Upper-class customers who go green may be more preferred the brand due to its green image and reputation 3.3.3 C&A Value proposition Value creation and delivery Value capture - Exploit residual value of products and resources - Consumers receive a voucher for the next item when participating ‘we take it back' program - The costume service helps to expand the lifespan of products - Customers are encouraged to be more sustainable via the take-back program - Customers are more loyal because they spend less money (take-back system) 3.3.4 M&S Value proposition Value creation and delivery Value capture - Exploit residual value of products - Support customers to repair and maintain the product condition - Repairing service helps to prolong the product life - Consumers spend less than before because of the tailoring service and the value to customers of the product 3.3.5 ASOS Value proposition Value creation and delivery Value capture - Exploit residual value of products - Attract the middle-class segment who have a tight budget and protect the environment - Product is more robust and cheaper because of the circular design and larger share of recycled materials - The consumer loyalty can be improved as products more durable and cheaper, hence buyers may be more favourable to the brand 3.3.6 ABFRL Value proposition Value creation and delivery Value capture - Attract consumers those have a tight budget as the price is lower due to a drop-in manufacturing cost - The price is lower as fewer virgin materials used in the manufacturing process - Consumers may now become more loyal to the brand because they spend less (through value proposition) Conclusion The report has examined the practices of the six fashion brands in the circular economy within their business context (due to the available information via corporate websites and annual reports) The classification of slowing, closing and narrowing loops was based on the paper of Bocken et al (2015) that can be found in section 3.2 Although many solutions have been put in action to address the resource issues (section 3.1) and promote a more sustainable and circular fashion industry, entrepreneurs need further innovative solutions such as product strategies, technologies, redesign or infrastructure factories, distribution channels For instance, sponsorships can probably inspire the collaboration of economists, researchers, innovators, and environmentalists to introduce more sustainable and innovative solutions/strategies for the development of the garment industry and contribute to environmental conservation programs Furthermore, the annual sustainability report likewise needs to be improved and more transparent with a statistical table of items or collections manufactured by reused or sustainable materials, and its contribution to the total revenue of the brand, by which the stakeholders can evaluate the business performance REFERENCING ABFRL, Sustainable Report 2018, ABFRL, viewed on 27 September 2019, ASOS, Animal Welfare, ASOS, viewed on 26 September 2019, ASOS, Carbon and Energy, ASOS, viewed on 26 September 2019, Bocken, NM, de Pauw, I, Bakker, C and van der Grinten, B 2015, ‘Product design and business model strategies for a circular economy’, Journal of Industrial and Production Engineering, vol 33, no 5, pp 308–320 Burberry London 2018, Annual Report 2018/19, Burberry London, viewed on 25 September 2019, C&A, Chemicals, C&A, viewed on 26 September 2019, C&A, Climate, C&A, viewed on 26 September 2019, C&A, Other raw materials, C&A, viewed on 26 September 2019, C&A, Waste, C&A, viewed on 26 September 2019, C&A, Water, C&A, viewed on 26 September 2019, C&A, Circular fashion products, C&A, viewed on 26 September 2019, Edie 2018, ASOS boss: The circular economy is the only way forward for fashion retailers, Edie, viewed on 27 September 2019, Ellen MacArthur Foundation, What is The Circular Economy, Ellen MacArthur Foundation, viewed on 22 September 2019, Fiber2fashion India 2019, ABFRL to anchor 'Circular Apparel Innovation Factory', Fiber2fashion, viewed on 27 September 2019, Hendriksz, V 2018, H&M, Burberry, Nike & more team up to Make Fashion Circular, FashionUnited, viewed on 22 September 2019, H&M Group 2018, H&M Group Sustainability Report 2018, H&M Group, viewed on 23 September 2019, Lewandowski, M 2016, ‘Designing the business models for circular economy—Towards the conceptual framework’, Sustainability, vol 8, no.1, p.43 M&S, Plan A 2025 Commitments, M&S, viewed on 27 September, Sweeny, G 2015, It’s the Second Dirtiest Thing in the World – And You’re Wearing It, Alter Net, viewed on 22 September 2018, The Waste and Resources Action Programme, WRAP and the circular economy, The Waste and Resources Action Programme, viewed on 22 September 2018, United Nations Climate Change 2018, UN Helps Fashion Industry Shift to Low Carbon, United Nations Climate Change, viewed on 22 September 2019, 10 ... report will discuss the indication of the circular economy, following by evaluating whether or not the fashion leaders are implementing the principles of circular economy business development and... of the six fashion brands in the circular economy within their business context (due to the available information via corporate websites and annual reports) The classification of slowing, closing... and value dimensions Circular economy The circular economy is a possible solution to replace the traditional linear economy (make, use, dispose) in which resources are kept in use for as long as