Consider the environmental impact of a pair of jeans. “[Each pair] is made from cotton picked from farms all over the world. The cotton is shipped back and forth across the oceans to be made into fabric, sewn, and dyed. Along the way, the average pair of jeans is treated with PFCs, chemicals that make material breathable and stain-resistant, and washed with detergents that contain alkylphenol ethoxylates, another hazardous compound. The whole process is incredibly water-intensive, from the farm up, and the carbon load from the shipping of the cotton to mills and the raw denim to factories is astronomical on its own. Then there’s the additional impact of the transport, by boat or train or jet, of jeans to stores. They arrive sealed in clear plastic bags, which are promptly trashed, [ending up in landfills].”1 Now ask yourself, do you as a consumer have enough data to evaluate the water consumed to make each pair of jeans? Do you know the amount of toxic chemicals used? Do you know the cumulative carbon load? Unfortunately, no. We as consumers have historically been shielded from the inner workings of the fashion industry. But as topics such as fair labor practices and sustainable sourcing gain momentum, consumers are beginning to demand transparency. A company called Everlane is riding this trend.
Everlane is an emerging start-up disrupting the fashion industry by being “radically transparent.” The company wants to share with its customers details for each item of clothing including what factories a piece was made in and its various cost components (including Everlane’s markup). Given Everlane’s value proposition for being high quality at a lower price than traditional fashion brands, it is laser-focused on costs. It believes that “when it can see the real costs, it can figure out how to lower them.”2 In terms of sustainability, Everlane appears to start and end with ethical manufacturing processes, ignoring environmental impact all together. “Everlane recently hired an auditor to inspect its factories, focusing on safety and health requirements, as well as workers’ wages and quality of life.”2
A sample cost breakdown for The Chelsea Boot provided on Everlane’s website3
Why will Everlane be important? I believe the implementation of global regulations aimed at forcing industries to begin internalizing the costs of environmental damage will have a significant impact on the fashion industry. Excluding the impact of regulations, the industry is also subject to significant input price fluctuations, such as cotton prices from increased incidences of severe draught, water prices as the world shifts towards conservation and transportation costs tied to the rising price of oil. Beginning to focus on these input costs now is simply just good business. As the shift towards transparency continues, Everlane is best positioned to win as the company that started providing its customers the information they wanted before they demanded it.
As quoted above, when you see real costs you can begin figuring out how to lower them. By internalizing costs related to environmental impacts and passing them on to consumers in a way they can understand and quantify, consumers now have the power to make their own decisions about the impact they personally want to have on the environment and can essentially vote with their purchasing power. Companies such as Everlane would also begin tracking these internalized costs and would be keenly focused on developing innovative ways to minimize costs and overall exposure to input price volatility. The companies that excel in minimizing internalized costs have the potential to gain the most market share by providing more affordable clothing while also attracting the customer base that will make decisions based on their environmental impact from the purchase. All parties within the supply chain will now be aligned on minimizing the environmental impact of production. (628 words)