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Sustainability Challenges in the Fashion Industry

Amber Biela-Weyenberg | Content Strategist | August 11, 2023

The fashion industry has been criticized for the poor working conditions and other substandard labor practices that can exist throughout its extended supply chains, as well as for the adverse impact its production, use, and disposal of raw materials and finished products has on the environment. The United Nations established the UN Alliance for Sustainable Fashion in 2019 to hold fashion brands to a higher standard. The factors complicating the industry’s move toward becoming more socially and environmentally sustainable come down to cost—mainly, the costs of paying people better, improving working conditions, disposing of waste properly, and using environmentally friendly materials. However, the fashion industry is making progress in many areas.

What Is Sustainability?

Sustainability is a broad term that encompasses the effects business and consumer decisions have on the environment, economy, and society. Sometimes this is called planet, profits, and people. In part because of pressures from customers and regulators, companies are starting to place a greater emphasis on sustainability practices, balancing their need to increase profits with goals to reduce their carbon footprint, cut waste, and improve working conditions and standards of living.

Key Takeaways

  • Today, the average consumer buys more clothing and wears it less often than ever before, perpetuating a cycle of overproduction as more brands try to keep up with fashion trends.
  • Fast fashion, the practice of manufacturing garments, footwear, and other clothing inexpensively and quickly, can encourage brands to use relatively inexpensive synthetic materials and sweatshop labor to keep prices low.
  • Many synthetic fabrics, such as polyester and nylon, don’t biodegrade and aren’t easy to recycle. Some shed microplastics and release greenhouse gases when manufactured and during decomposition.
  • The vast majority of factory workers who support the fashion industry aren’t paid living wages and often work in dangerous conditions.

9 Sustainability Challenges in Fashion and Solutions

Sustainability challenges in fashion include the cost of raw materials, carbon footprint, unsold inventory, and poor working conditions.

To meet customer demands, clothing production has at least doubled since 2000, according to estimates from McKinsey & Company and the World Economic Forum, with some retailers adding thousands of new items each week to keep up with changing tastes. That soaring production has exacerbated the following sustainability challenges, but there are solutions.

1. Raw Materials Costs

To meet increasing consumer demands for fast fashion—clothing and footwear that’s manufactured inexpensively and quickly—more brands are opting for synthetic fabrics over more expensive textiles. Fabric makes up 60% to 70% of the total cost to create a garment, according to industry website Fibre2Fashion, so choosing sustainable raw materials, such as organic cotton and bamboo linen, inevitably increases the retail price of the clothing. Organic cotton, for example, uses less water and is more sustainable than even conventional cotton, but it costs US$500 to US$700 per ton compared with US$225 to US$345, according to the United States Department of Agriculture.

Synthetic textiles, despite their negative impact on the environment, are used in 69% of all clothing, according to industry adviser Tecnon OrbiChem. Nylon and polyester, two common synthetic fibers, create greenhouse gases during the manufacturing process and can take up to 1,000 years to decompose. However, their lower cost and mass availability are too tempting for many fashion labels to ignore.

Apparel companies can help mitigate the cost of using more sustainable materials in a few different ways. In some cases, recycled fabrics cost less than buying new raw materials, as is the case with wool. However, recycled cotton yarn is usually more expensive than virgin cotton yarn because of the extra steps required to make it usable, illustrating how complex sustainability in the fashion industry can be.

Another solution is to plan, during the initial design stage, how a garment’s fabrics can be reused in the future to minimize costs long term. To be environmentally friendly, some fashion labels encourage shoppers to return unwanted clothing to their stores, allowing designers to Levi’s lets customers trade in old denim for coupons to use on new items.

Companies can also cut costs in other areas, so they have more money to spend on sustainable raw or recycled materials. For example, a brand may change how patterns are cut to maximize fabric use and incorporate material scraps into designs to eliminate waste that ends up in landfills. Another option is for manufacturers and retailers to use software to more accurately predict demand to avoid having to burn or throw away excess inventory. A few manufacturers are using 3D printing to reduce waste—it generates less wasted material than other forms of fabrication.

2. Technology

Breakthroughs in science in the 1930s gave fashion the first marketable plastic-based synthetic fabric—nylon—and started the industry down a path toward unsustainability. Manufacturer DuPont invented nylon, whose first application was in toothbrushes, but its strength, stretch, and durability were particularly suited to women’s stockings, replacing silk as the fabric of choice in the 1940s, according to the Science History Institute. Quickly, fashion brands began using nylon, Lycra, and other synthetic fibers in their apparel as advances in technology made them easy and inexpensive to produce. Their environmental impacts, such as greenhouse gas emissions and microplastic pollution, weren’t known until later.

Technology in the digital age further complicates matters. Social media feeds into the fast fashion and FOMO (fear of missing out) mindset, persuading consumers they need to buy the It bag or keep up with the rapidly changing fashions worn by celebrities, influencers, and even friends. Fashion brands may pay an influencer with a million Instagram followers at least $10,000 for just one post promoting their clothing, says Shopify. However, the more garments people buy, the less they wear them. A 2015 survey of women by British charity Barnardo’s found that an article of clothing is worn only about seven times on average, resulting in more waste as discarded apparel ends up in landfills and waterways.

Digital technology can be part of the solution. Fashion manufacturers and retailers can use celebrity social media posts to promote their sustainable fashions and educate consumers on why buying fewer articles of quality clothing is a better investment and healthier for the planet. Retailers and designers could use 3D digital sampling to let consumers try on clothes virtually to reduce the waste generated and energy consumed when they return apparel for various reasons. Furthermore, brands can track customer reviews and return data to make more informed design decisions on future apparel to avoid issues such as poor fit or fabric quality. Fashion labels could analyze historical and real-time data in their demand forecasting applications to avoid creating an oversupply of products, making quick adjustments to output—as does Yamamay, an Italy-based clothing producer and distributor.

Technology benefits factories as well. Opting for renewable energy sources, using smart manufacturing software that can detect the inefficient use of materials, and updating machinery with energy-efficient models can cut costs as well as help the environment. Textile manufacturers can switch to waterless dying techniques, which save water and energy, and use organic dyes instead of synthetic ones, which are sometimes made from toxic chemicals.

3. Carbon Footprint

The UN estimates that the fashion industry is responsible for up to 10% of the world’s carbon emissions, in part because of its long supply chains. Greenhouse gases are emitted during manufacturing and distribution, as well as from synthetic fiber waste decaying in landfills. Consumers worldwide discard about 92 million tons of clothing each year, the BBC reports, equivalent to a garbage truck filled with clothes being thrown away every second.

Brands can reduce their carbon footprint by using more sustainable fabrics, such as organic cotton, cork, and recycled materials. The World Resources Institute recommends that factories maximize energy efficiency by insulating heating systems and using more efficient motors for machines, while turning to renewable energy sources where they’re available. Furthermore, fashion brands can reduce their carbon footprint by reducing their packaging; suppliers can reduce their footprint by using electric and other energy-efficient vehicles and optimizing routes in their shipment of goods.

4. Other Environmental Implications

Reducing greenhouse gas emissions is one issue, but environmentalists say the fashion industry has room for improvement in other areas as well. Fast fashion relies on synthetic fabrics, such as nylon produced from plastics, which release microplastics in rain-soaked landfills and the world’s oceans as they degrade. (Such debris ends up in oceans and other bodies of water after being illegally dumped there or carried there by rainwaters and winds.) The United Nations Environment Programme says there are 51 trillion microplastic particles in the seas—500 times more than the number of stars in our galaxy.

Apparel makers could use natural, sustainable materials—such as organic hemp, cotton, and linens—instead to avoid microplastic shedding altogether. But some brands address the world’s plastic problem by recycling it into clothing and accessories. For instance, ECONYL, commonly used to make bathing suits, is made from regenerated nylon waste. Consumers can further decrease microplastic shedding by installing a filter on their washing machine, line-drying their clothing, and doing laundry less often.

Environmentalists also cite the fashion industry’s water usage as a concern. The World Resources Institute estimates that 2,700 liters of water—enough to meet one person’s needs for two-and-a-half years—is required to make one cotton t-shirt. Water contamination is another issue. McKinsey reports that about 25% of industrial water pollution comes from dyeing and treating textiles with chemicals. Possible ways to conserve this natural resource include switching to waterless dyeing and finishing processes and opting for organic cotton over conventional cotton.

The fashion industry also gobbles up huge amounts of crude oil—globally, more oil is used each year to create textiles than is used by all of Spain for all purposes, reports the Changing Markets Foundation. Fashion brands could lessen this impact by choosing sustainable materials when designing their apparel, including recycled synthetic fabrics. However, while recycled synthetic fabrics are better for the environment than creating new ones, they can still shed microplastics.

5. Skilled Labor

The fashion industry, like most industries, has a shortage of skilled workers, making the move toward sustainable business practices more challenging. For example, less than 1% of clothing is recycled worldwide, reports the World Economic Forum, partly because recycling requires skilled labor. A cotton shirt may be made of several materials, such as nylon thread, a polyester label, buttons, zippers, and even plastic sequins or other embellishments. Employees need the skills to be able to deconstruct these elements and the knowledge to identify and separate various materials for reuse.

Furthermore, fashion brands looking to recycle their own apparel need designers able to rework those products into something new in the future. For example, a fashion label may release a style of denim jeans one year that it knows can be easily repurposed later into handbags, thereby reducing its environmental impact. But the craftspeople needed to make that happen, such as leather workers and jewelry makers, are hard to find, which could delay production times and drive up costs.

Some environmentally conscious fashion houses are upskilling and reskilling their people through mentorship programs or by partnering with institutions that teach these trades. LVMH, the world’s largest luxury goods company, launched its own apprenticeship and training program that offers employees in six countries the opportunity to learn 27 different expert trades, ranging from design to sales. Beyond its in-house program, LVMH also visits middle school students to pique their interest in these professions early on.

6. Transparency

Advocacy groups are asking fashion brands to answer questions about their products and sourcing practices. Can they guarantee that their clothes and their fabrics weren’t manufactured using sweatshop labor? What is the environmental impact of their manufacturing, distribution, and sales processes? However, most brands don’t have all the answers because tracing the origins of just one shirt can be challenging.

For starters, a company would need to know whether pesticides were sprayed on the crops that were used to make fabrics, under what working conditions those fabrics were made, how much water was used for different processes, and how its products were transported. Answering these kinds of questions involves gathering data from multiple farmers, factories, and logistics companies worldwide. Threads, zippers, and embellishments likely come from other sources as well, requiring more questions to be asked and answered. Fashion labels and retailers often buy materials and clothing from wholesalers and other intermediaries, requiring information from many additional sources.

Each layer adds complexity, and gathering this data is time-consuming. This may be why half of the world’s largest fashion brands don’t disclose any information about their supply networks, according to 2022’s Fashion Transparency Index, created by the nonprofit Fashion Revolution. If brands or retailers want to become more sustainable, they must overcome this challenge.

They may want to start small by asking vendors a question or two at a time and capturing the data, eventually partnering with their suppliers to gather information throughout the supply network. Additionally, they need to ask standard sustainability questions when interviewing potential suppliers.

Consumers are increasingly interested in sustainable fashion as well, but they’re sending mixed signals. A 2021 survey by Zalando, an online fashion and lifestyle platform, found that while 60% of consumers say they value transparency from fashion brands, only 20% actively seek sustainability information when making purchasing decisions. The same study also found that 81% value price above all else.

Apparel makers that act sustainably can stand out by sharing their progress with customers and making it easy to find information on their website and clothing labels. But they should be careful not to “greenwash” their sustainability efforts, which means misrepresenting them for public relations benefit. Greenwashing can damage a brand’s reputation and undermine customer trust.

7. Unsold Inventory

Unsold apparel poses another challenge to the fashion industry’s sustainability efforts. While some fashion labels and retailers may choose to store unsold inventory in warehouses until demand picks up, sell it to discount retailers, or give it away to charitable organizations, some choose a fourth option—incinerating or dumping the products.

Some luxury brands have made the news for burning millions of dollars’ worth of products because they think selling those items at a discount or giving them away would devalue their brand name and their reputation for exclusivity. Burning clothes made with synthetic fibers not only pollutes the air, in part by releasing microplastics, but it also contributes to global warming by emitting methane gases. Clothing that is thrown away emits methane and releases toxic chemicals and dyes into the groundwater and soil as it decays in landfills.

One solution to minimize unsold inventory is to use data analytics to better forecast demand. Unforeseeable circumstances, such as inflation, global conflicts, and a worldwide pandemic, could complicate sales for fashion brands and retailers, so industry players may want to use more than one tactic.

For example, fashion labels are “upcycling” unsold inventory by adding embellishments to make it look different or creating new clothing and accessories from the materials. Some brands partner with companies that specialize in recycling textiles to extend the life of those fabrics, while others donate or sell unsold inventory to other brands that recycle the materials.

Another option for fashion brands looking to reduce their unsold inventory is to pivot to a made-to-order clothing model. This model reduces waste but would require consumers to wait longer to receive their orders. Microfactories that rely on robotics and other forms of automation to produce items, sometimes within 24 hours of being ordered, are aiming to solve that problem.

8. Working Conditions

To keep prices low, many fashion brands produce their apparel in factories in developing countries where workers earn minimal wages, toil long hours, and are subject to poor conditions. The documentary film “The True Cost” estimated that the fashion industry employs 75 million factory workers globally, and less than 2% of them make a living wage. For example, the average hourly pay for a factory worker in India is US$1.61, less than the national minimum wage, according to the Economic Research Institute. Business Insider recently reported that one factory in China pays workers as little as US$0.02 per garment made. Investigative reports also show that many garment laborers work long hours in unsafe conditions—commonly called sweatshops—with faulty wiring, no windows, and exposure to harmful chemicals.

Fashion companies, including retailers, could help stop these human rights violations by vetting suppliers and tracking sustainability data throughout their supply chains. A company called Retraced, through its sustainability management software, helps fashion companies ensure that they’re sourcing materials from manufacturers that use sustainable methods of production.

Supply chain traceability may not be voluntary for long. Two New York state legislators have sponsored the Fashion Act, which, if passed, would require apparel and footwear brands that do business in the state and generate more than US$100 million in revenue to track and report sustainability data throughout their supply chains. Meanwhile, consumers can make their voices heard by refusing to buy from brands known to abide sweatshop labor and other substandard practices. A team of researchers at North Carolina State University is developing the Ethical Apparel Index, which amalgamates large amounts of audit data to help consumers identify companies with fair labor practices. The team’s goal is to allow consumers to scan a barcode on a garment and quickly see a summary of production practices.

9. Supply Chain Management

It’s common for one piece of clothing to have many chapters to its origin story, requiring brands that want to act sustainably to gather information about the business practices of many vendors throughout their complex supply chains. Those vendors include multiple farmers, fabric and other raw materials producers, shippers, importers, and wholesalers. For example, a clothing maker that buys its cotton fabric from a factory in China would need to rely on that supplier to collect data from the separate factory that wove the cotton fibers into the fabric. Adding another step, the brand may want to ask if pesticides were sprayed on the crops used to produce the cotton fibers, requiring the second factory to gather data from farmers. The clothing maker may also want to ensure that those farmers were paid fairly. This data collection and reporting process potentially creates a tortuously complex game of telephone as one vendor reaches out to the next, and so on.

Considering that the fashion industry manufactures more than 100 billion garments a year, collecting sustainability data on each item may seem daunting. A brand may begin mapping its supply chain by asking each vendor a question or two and tracking the data. Repeating this process as necessary makes the initiative more manageable.

The Future of Sustainability in Fashion

Giving industry players and consumers the data they need to make better decisions is the future of sustainability in fashion. Manufacturers and retailers need access to data on the production, employment, shipping, and other practices of farmers, raw material makers, and logistics companies. Likewise, consumers need easy access to information about the environmental and social impact of apparel manufacturing and distribution on brand websites and clothing labels. Supply chain transparency is critical, and brands need a standard way to measure it.

Globally, 85% of consumers have changed purchasing habits over the last five years in favor of more sustainable options, according to a report by Simon-Kucher, a strategy and pricing consultancy. A survey by Oracle found that 52% of American consumers think it’s important that a retailer’s brand values, including its commitment to environmental sustainability and sourcing materials ethically, are aligned with their personal values. Apparel companies that invest in sustainability and can show improvement backed by data can set themselves apart in the global marketplace and win favor with retailers and consumers.

Sustain Your Business and the Environment with Oracle

Oracle Fashion Retail Software has built sustainability capabilities into a wide variety of applications and other products to help the fashion industry become more socially and environmentally sustainable. For example, Oracle Retail Supplier Evaluation augments the Oracle Retail Merchandising procurement process, letting retail buyers assess suppliers based on ethical, environmental, quality, and other criteria. Oracle Retail Brand Compliance Management is helping one South African retailer capture sustainability-related data on the food products it purchases and report on the metrics to ensure that the retailer makes good on its goal of only selling items with a sustainability attribute.

Sustainability Challenges in Fashion FAQs

What does sustainable fashion mean?
Sustainable fashion is the practice of creating apparel and accessories from sustainable materials produced under fair working conditions.

What impact does the fashion industry have on the environment?
Fashion is considered one of the world’s biggest polluters and contributors to global warming, largely due to the greenhouse gases and microplastics emitted by the considerable amount of waste the industry produces.

Why do some brands use sweatshops?
Consumer demand for “fast fashion” encourages apparel makers to keep prices low by using cheap labor and materials.

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