Management Award

2021

FASHION’S CONTRIBUTION TO CLIMATE CHANGE

We have about ten years to protect ourselves from irreversible damage caused by the climate crisis and to drastically adapt our unsustainable consumption lifestyles to avoid a climate collapse through the responsible transition. According to the United Nations (UN) Economic Commission for Europe, the fashion industry is the second highest water waste producer with 20 per cent of global wastewater and ten per cent of global carbon emissions. That causes more than the emissions of all international flights and maritime shipping combined, increasing the risk of not meeting the Paris Agreement’s goal of keeping global warming below 1.5-degree Celsius by 2030.

The UN Fashion Industry Charter for Climate Action was signed by 43 brands in 2018, which pledged to reduce emissions by 30 per cent by 2030 and up to 100 per cent by 2050. This commitment gave Business of Fashion (BoF) the impetus to question: When dozens of brands pledged to reduce the industry’s emissions, they did not know the baseline they had committed to reduce from. The complexity of climate change is difficult for AI fashion actors to break down into parts, which is why the UN published the 17 SDGs to tackle global environmental threats within the next 10 years. Instead of being a global environmental concern, the fashion industry should become a driver for integrating the SDGs into daily business. For example, SDG 12 addresses responsible consumption and production to lay the groundwork for accelerating decarbonisation in the fashion industry. Ultimately, scaling the carbon footprint enables to shift in business models towards more traceable and measurable sustainability.

THE RISE OF CONSUMER ACTIVISTS

As consumer awareness of environmentally damaging and inhumane working conditions for garment workers within the value chain rises, companies are forced to show regulations, justice and safety to protect the environment and their workers. BoF states in their case study (Lessons From Fashion’s Journey to Radical Transparency) that Gen Z (born 1996-2019), which accounts for 40 per cent of global consumers by 2020, is spending more on products that are less harmful to the environment. Companies will soon have to adapt their products and services to this prominent group of customers who are starting to question the things they buy. As customer demand moves towards more sustainable fashion actors, the good news is that companies could save about 20 per cent of their total emissions by encouraging emerging sustainable customer behaviour, according to McKinsey & Company and GFA.

ALGORITHMIC SOLUTIONS TO THE CLIMATE CRISIS TO START WITH

The thesis calls on AI fashion actors to adapt their algorithmic innovations (ALIN) based on data from customers' sustainability orientation to align with the SDGs by encouraging responsible consumption and production. ALIN is defined here as newly introduced (combinations of) deployed problem-solving algorithmic technologies. In this context, the research question is: Do AI fashion actors collect user data from their sustainable customers to use their ALIN along the SDGs? How can they assess their orientation towards the SDGs? The thesis conducts a multiple embedded case study of AI fashion actors Alibaba, Amazon, H&M, Stitch Fix and Zalando to test this hypothesis. The results confirm that they do not use their technologies reflexively in line with the SDGs, as user datasets for sustainable ALIN do not yet exist. Further, this evaluation receives qualitative validation from (AI) experts who were interviewed for an economic assessment of the state of sustainable algorithmic innovations.
Based on the case study's findings, the thesis emerges a sustainability self-assessment tool based on the OECD AI principles, among others, that enhances the sustainable AI design competence of AI fashion actors by critically reflecting on their customer data collection and how to adapt them for the SDGs.

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