Sustainability: The Inditex Effect

MILAN--This summer, Zara’s parent company Inditex unveiled its ambitious plans to produce 100 percent of all of its clothing with sustainable fabrics before 2025.  If Inditex does keep its promises, it could revolutionize the textile and clothing industry for good, rendering sustainable materials and components more affordable, especially in countries like Portugal, one of its major suppliers.

“When we heard about what Inditex plans to do… that fits completely with our vision,” said Paulo Vaz, the head of ATP, Portugal’s textile and clothing association.
 
On the whole, Portugal’s industry has been driven by sales to fast fashion players like Mango and H&M, as well, and if demand of sustainable fabrics grows, that means demand will drive those prices down. Vaz estimates that Zara spends about 700 to 800 million euros per year on Portuguese textiles and clothing production. On the whole, the Portuguese garment and textile industry generated 7.6 billion euros in 2018. About 20 percent of the coastal nation’s manufacturing workers are employed by apparel and textiles companies. In terms of market share, Portugal is the sixth largest European textiles and clothing player in Europe, behind Spain, the UK, France, Germany, and Italy. Italy is the largest at 31 percent.  
 
In Italy, at the Milano Unica trade show in Milan in July, high-end mills lamented that the cost of producing sustainable fabrics is still high and the production times are longer.
 
Vanguard brands and emerging designers are slowly making the transition even though many of them have also long complained about the cost. Today, there are signs that rising demand is driving those costs down slightly.

“The cost wasn’t that bad. We used sustainable cotton, for example, and that was only 20 percent more than regular cotton,” said Milanese novice designer Marco Rambaldi backstage before his Spring/Summer 2020 show. “If you are gonna go sustainable, you really have to be dedicated to it and stick with it.” 


About 80 percent of Rambaldi’s collection is made with recycled, up-cycled and eco-friendly materials.

While Italy is known for luxury fabrics, Portugal is known for its tech and performance fabrics. Its products are considered a well-made European alternative to Italian goods, which is why Portugal’s companies are preferred by major fast fashion and accessible luxury players. Roughly 50 to 60 percent of Portugal’s textile makers have invested in the production, research, and development of sustainable fabrics.  
 
“Portugal has a big opportunity to thrive. We have an edge over countries like China and India…We are like what Italy was 15 years ago. A lot of the new fabrics, materials, universities and institutions developing these innovations are here in Portugal,” Vaz explained.  
 
And while the industry struggles to embrace a new ethos and way of doing things, experts and insiders are reticent to buy into the hype – wary of “greenwashing.”
 
“Apparently Zara is on a new mission to make you believe they are doing great work, when all they have to do is just cut down the amount of clothes they produce like any other fast fashion company,” Eco Age founder Livia Firth posted on Instagram following the news. Firth noted that Zara releases 500 new designs a week, 20,000 per year.  
 
On an industrial level, Vaz said skepticism over the news has set in. This is mostly due to the fact that over the past two to three years, Inditex has been choosing to produce its apparel in other countries like Morocco and Turkey. “Places where they can get a better price,” Vaz said. “How is that a sustainable way of thinking?”
 
Despite their efforts to reduce their carbon footprint, H&M and Zara, the two largest fashion retailers in the world, have come under massive fire for their negative impact on the planet, as together the two are said to produce some 80 billion garments per year contributing to about 1.2 billion tonnes of greenhouse gas emissions annually. 
 
Inditex's news comes at a time when fashion struggles to define sustainability. Is it sustainable fabrics that can biodegrade? Is it reducing a company’s carbon footprint? Is it employing artisan workers in place of machines?
 
One thing is for sure, progress is coming. It's coming slower than hoped and with some fanfare, but big brands and apparel juggernauts are ready to put their money where their mouths are, on a global stage.
 
Last month Inditex, together with vanguard luxury companies like Prada and Chanel, Nike and fast fashion peer H&M Group, signed an environmental pact, Kering CEO François-Henri Pinault presented at the Group of 7 summit in Biarritz.
 
Though the pact is not legally binding, these companies agreed to a variety of targets including eliminating disposable plastic packaging by the end of the next decade.
 
The stakes are high. Inditex is listed on Madrid’s main index and currently has a market capitalization of over 80 billion euros. Their shares were recently hit this month – the most all year – by market jitters over retail conditions.
 
For now, Portugal's leaders are realistic.  
 
“Our goal is to render Portugal’s industry the most sustainable in the world. I think by 2030 our industry could be entirely sustainable and, to me, that’s a good goal,” Vaz said.

 


Photos by Inditex press photo

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