Innovations emerging in the fashion industry in response to sustainability pressures present unprecedented investment opportunities, which Boston Consulting Group (BCG) and Fashion for Good estimate at $20 billion to $30 billion annually, according to their new report, Financing the Transformation in the Fashion Industry: Unlocking Investment to Scale Innovation, which is being released today at the World Economic Forum in Davos.
Sustainability is at the top of the fashion industry’s agenda, as leaders recognize the urgent need to move toward responsible practices under growing consumer and regulatory pressures. The question is how the industry will transform to achieve a sustainable operating model. A step change requires disruptive innovation in the form of new materials, processes, technologies, and business models.
The fashion industry has historically engaged in a cost-driven race to the bottom, giving little attention to radical new technologies. However, a perfect storm of innovation and opportunity is now forming, and investors and companies that can capitalize on sustainability and impact-driven innovation will transform the industry. The study calculates that transitioning toward sustainability yields a $20 billion to $30 billion financing opportunity per year to develop and scale disruptive innovations. The latter case requires innovation to emerge at a faster pace before 2030, which in turn calls for investments to increase by a factor of three or more over their current levels.
With its $2 trillion market size, the fashion industry offers major untapped opportunities for investors and companies. But to bring the necessary solutions to scale, all players—fashion brands, supply chain partners, investors, and others—need to step up to accelerate innovation. The clock is ticking for the industry to advance, and companies and investors that act boldly and rapidly will lead the transformation and ultimately win.
“While the first steps have been taken, fashion needs to embrace and accelerate innovation to future-proof the industry. Doing so opens up major untapped returns for those who can capitalize on the upcoming technological disruption,” said Sebastian Boger, a BCG managing director and partner.
“Disruptive solutions that can offer major leaps forward toward circularity exist today, and the opportunities to invest and scale them within the industry are vast. This seminal study provides powerful insights and a clear call to action for all players to collaboratively drive innovation,” said Katrin Ley, managing director of Fashion for Good.
The report includes the following key findings:
A copy of the report can be downloaded here.
About Boston Consulting Group
Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit bcg.com.
About Fashion for Good
Fashion for Good is the global initiative that is here to make all fashion good. It’s a global platform for innovation, made possible through collaboration and community. With an open invitation to the entire apparel industry, Fashion for Good convenes brands, producers, retailers, suppliers, non-profit organisations, innovators and funders united in their shared ambition.
At the core of Fashion for Good is our innovation platform. Based in our Amsterdam headquarters and recently expanding the programme to South Asia, our global Fashion for Good Accelerator Programme gives promising start-up innovators the expertise and access to funding they need in order to grow. Our Scaling Programme supports innovations that have passed the proof-of-concept phase, initiating pilot projects with partner organisations and guided by our dedicated team that offers bespoke support and access to expertise, customers and capital. Our Good Fashion Fund catalyses access to finance to shift at scale to more sustainable production methods.
Fashion for Good also acts as a convener for change, with the world’s first interactive museum dedicated to sustainable fashion innovation. In our headquarters, Fashion for Good houses a Circular Apparel Community co-working space, creates open-source resources like its Good Fashion Guide that provides practical advice to implement cradle-to-cradle™ certified apparel as well as white papers and reports investigating industry practices and developments.
Fashion for Good’s programmes are supported by founding partner Laudes Foundation (formerly C&A Foundation), co-founder William McDonough and corporate partners adidas, C&A, CHANEL, BESTSELLER, Galeries Lafayette Group, Kering, Otto Group, PVH Corp., Stella McCartney, Target and Zalando and affiliate partners Arvind, Norrøna and Welspun.
The Fashion for Good Museum opens a new exhibition “Fashion Week: A New Era” on May 20. Every year during Fashion Week the latest fashion is shown on catwalks in Paris, Milan and New York and other metropoles across the globe. This iconic event has a major impact on the fashion industry and on our own wardrobes.
Fashion for Good is pleased to announce seven new innovators selected to participate in its 2022 Asia Innovation Programme. The nine-month programme provides the participants with tailored support to help them scale - matching the innovators with relevant industry partners to drive piloting, implementation, and investing activities.