08 September 2022, Mumbai:

The estimated size of the worldwide textile market in 2020 was close to $1000 billion, and it is expected to rapidly increase at a compound annual growth rate (CAGR) of 4.4% from 2021 to 2028. In the upcoming years, the market is anticipated to be driven by rising demand for apparel/clothing from the fashion sector and the development of e-commerce platforms. Five of the seventeen Sustainable Development Goals (SDGs) are climate action, gender equality, responsible consumption and production, proper sanitation followed by clean water, and decent work and economic growth—which are related to the textile sector. Globally, textile firms are aggressively promoting pollution-reduction techniques and establishing emission targets to slow climate change.

A critical part of the ESG initiatives is responsible manufacturing

The textile sector, which ranks among the most polluting in the world, must look into sustainable practices to reduce resource consumption and pollution, enhance worker safety, and protect customers' right to make informed purchasing decisions. Agriculture, manufacturing, processing, fabric care, usage, recycling, and disposal are part of its supply chain. The semblance is that textile industry has started to take leadership in limited sense delivering real impact, focusing on reducing or controling its water & carbon footprint.

Therefore, the adverse effects on the environment must be considered in the sustainable growth of the textile industry, and appropriate mitigation measures must be put in place. The capacity of sustainable textiles to decrease waste by ensuring the reuse and recycling of goods while reducing the consumption of resources like land, water, and oil is crucial to the industry's survival. The textile sector should also concentrate on sustainability-related issues, such as protecting the environment and public health, workplace safety, gender equality, and satisfying customer demand for eco-friendly textile goods.

Green sourcing-supply chain

The cliche in the power corridor is," A green supply chain is a requirement for profitability as businesses stare today heigtened levels of operational and financial risk". Green Sourcing stands as a significant step in the textile industry at large. Introduction of new sustainable procedures and rules for all sourcing departments, which will increase value.

Take note of the availability of raw resources in this market and sector that might be practical and long-lasting. A critical factor in the industry that may be considered to improve its operating system is the comparison of the costs of sustainable and non-sustainable products and services.

AN ESG SNAPSHOT

Giving a quick context of challenges organizations are confronting especially in India include obtaining ESG metrics from supply chain partners and third parties to validate. Therefore, its also essential to do regular reviews and monitoring while modifying the sourcing strategy to follow the requirements and expectations of the designated organization.

Factoring in energy transition cost, supply chain sustainability commitment goals and regulatory compliance are some of the odds while reaching sustainability in the textile industry. Achieving sustainability without sacrificing commercial competitiveness, changing from a low-cost ready-made garment/apparel business to one that produces value-added goods. Promoting more investment in independent R&D and strengthening industry-institute partnerships. And increasing the ability to innovate and giving the resources needed to keep such inventions alive.

Future Roadmap

EY's one of the earlier report mentions," With the EU Strategy for Sustainable and Circular Textiles, the Commission aims to ensure that by 2030, textile products have a longer life, recyclable where possible. In line with the proposed ESPR, the Commission will introduce mandatory ecodesign requirements for textiles focusing on aspects of product design". The Companies Act, of 2013 introduced one of the first ESG disclosure requirements for companies.

The article is getting readers' trade insights sharing how the strategy will help the EU shift to a climate-neutral, circular textile economy pushing sector-producing articles meant to be environmentally sustainable. IOTs is transforming the businesses/sectors globally & AI can help business stakeholders visualize their ESG data, and visibly green hydrogen solutions to accelerate the clean energy transition can be some of the ways to transit in the direction of attaining neutrality as stated by many corporates.

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13 September 2022, Mumbai:

Covid has been a big disruptor in many ways affecting/transforming almost all economic sectors. Noteworthy amongst them is the Indian fashion space having witnessed the phenomenal rise of private labels in both the online and offline retail domains. The innate advantage it enjoys is that of high availability besides providing great control over pricing one over the other/established brands. So much so that one today would reckon dozens of Indian private brands famously known as private label and store brands, are typically designed to be made and sold for a specific celebrated retailer to stay relevant & competitive. The fundamental premise driving synergies here is that private-label products are getting sustainable favour & appeal from consumers across sub-sets within the fashion & retail space.

Find below some of the famous case studies to drive home the point:

1. "Reliance Retail", India’s largest & biggest retail company mirrors 'the shape of things to come'. It is an entity with Rs 1,49,925 crore of revenues in FY21, having launched ver four dozen private-label brands across all consumer wearables, consumables, grocery segments, etc. Anecdotally the apparel segment has witnessed the introduction of key private labels like Netplay (formal office wear), Performax (specialized activewear), Fusion (fusion-wear for women), Avaasa (ethnic wear for women), and Rio (fashion wear for working women). Its annual report in FY21 reports that the company has earned over 75% of its revenue from its fashion and apparel, footwear chain "Reliance Trends" entailing in-house brands, where the contribution of private labels to its revenue is a whopping 60% or thereabouts.

2. AJIO, a fashion and lifestyle brand, is Reliance Retail's digital commerce initiative and is the ultimate fashion destination for styles reports that Private labels comprise almost 50% of the top brands currently sold on its platform. This feat includes outselling stalwart leader brands such as Levi’s, Superdry, and US Polo Assn. What is remarkable is that the platforms’ popular private brands Teamspirit, Mix N Match, and Avaasa are hands-down ahead of the top-selling brands notably experienced during festive season sales.

3. Myntra, the case is no different, having an army of private labels most specifically across a lower price spectrum accounting for say 35% of its revenue. Here the spotlight shifts to the plethora of private labels involving/developed/backed by celebrities such as Hrithik Roshan and Deepika Padukone brands like 'HRX' and 'All About You' respectively.

4. RutuMody-Kamdar, the founder of Jigsaw Brand Consultants, says, "Private labels provide a remarkable play helping retailer designing promotions, advertising or even the packaging of the label to the business requisites".

It is nothing new as prominent retailers like the Future Group, Reliance Retail, K Raheja Corp-owned Shoppers Stop, and the Aditya Birla Group have already seen private labels' demand tailwinds clocking impressive performance on the back of ease of getting credible ‘contract-manufacturing’.

Umashan Naidoo, head, of customer and beauty, Trent operating Westside, alludes that their brands in apparel, footwear, and other accessories contribute over 99% of sales"

There are interesting instances where Private Labels have even been launched in the open market to compete fairly & squarely in the marketplace stimulating growth. Therefore, as the advantages overweigh prompting Amazon & Flipkarts of the world not to shy away from investing reasonably in their private-label portfolios than ever before.

Bottomline

In fact, what intrigues is that they carry the name of the seller but are manufactured by a third party/contract-manufactured. So it is no brainer that private labels margins are better due to supply chain efficiencies and better control over operations leading to it catching everyone's attention. The article dives in deeper to give greater insights, and let readers learn more about decoding the phenomenon of unfolding private labels.

It is widely evidenced that the merit of the exercise is purely for their economic merit given that private labels broadly don’t share marketing costs. One of the actionable points is that it allows you to select the customer base avoiding information asymmetry.

Last but not least is that private labels have helped online retailers attract new consumers notwithstanding the looming inflationary concerns biting common man helping trajectory of growth, optimizing sales particularly when festivity is already upon us.

(CREDITS: fashionatingworld.com)

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10 September 2022, Mumbai:

The 17 Sustainable Development Goals (SDGs) are part of the 2030 Agenda for Sustainable Development. The Global Goals are ambitious & aspirational, but what's certain is that if every one of us commits to making 1 positive change it is doable & we can make a tangible impact.

In effect the Sustainable Development Goals (SDGs) are a universal call to action to eliminate poverty, mitigate the environmental scourge, protect the planet and improve the lives and prosperity of every single human being. The semblance is Goals outline the blueprint to accomplish a secure and more sustainable future for one & all.

The Goals provide a relevant and universal framework & are designed to be universal (for both developed and developing countries). It is sanguine to upfront iterate here to address the global challenges we are facing every day, including the scourge of abject poverty, inequality, climate change, environmental degradation, injustice, etc.

Call To Action

Simplistically the prerequisites for SDGs as in a call to action is successfully getting key stakeholders coherently on the same table (including employees, vendors, regulatory bodies, and investors). The SDGs present an unparalleled opportunity to bring on the same page the ongoing sustainability initiatives whatsoever an entity may have through shared value & pooled architecture fuelling the textile industry’s efforts to face & surmount impending odds in the textile global supply/value chain.

A case in point is the global apparel industry of approximately $2.5 trillion to $3 trillion with scale, scope, technical & operational capability to optimistically deliver and achieve SDGs targets, aligning local value chains well within this ever-connected globalized supply chain. Pulse Check

Given that the textile sector, which ranks among the most polluting in the world, so proportionately there is greater scope for Textile companies as one would reckon to go down the path of sustainability. Again being a sector generating huge jobs creator & an economic force multiplier. To take full cognizance of the sector where two-thirds of textile industry supply chain workers are women. Companies in the sector are therefore presented with an incredible opportunity to continue to be constructive in attaining the goal of achieving gender equality, improving economic livelihoods, and mitigating climate impacts.

Key takeaways

The time clock is ticking for this Industry to contribute as a global supply chain to the SDGs by 2030 to drive the synergies. This article was presented to showcase the demonstrability of the industry per se and how well it has currently aligned the larger purpose of integrating the SDGs into its business missions, vision & current engagement.

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12 September 2022, Mumbai:

According to recent estimates from McKinsey & Company, consumer goods companies must prioritize supply chain ESG concerns since, for these companies, more than 80% of GHGs and 90% of other environmental impacts occur in supply chains. And among consumer products, apparel/garment and footwear businesses are particularly at risk of doing business with suppliers who mistreat people or degrade local ecosystems.

Suppliers face low margins and fierce competition because brands can obtain the same products from numerous contract manufacturers. This is particularly true in the cut-make-trim (CMT) industry and the countless subcontractors that CMT firms use to outsource tasks like embroidery and printing.

Concerns around human rights violations

The embargo on cotton from Xinjiang, the Chinese region where Uyghur Muslims are subjected to human rights violations and forced labor, has been aimed chiefly at apparel importers. The Xinjian cotton restrictions, which were started by the Trump Administration, have been maintained by President Biden. The Wall Street Journal it was reported that as Xinjiang is thought to produce 80% of China's cotton, "trade attorneys and business organizations predict more import restrictions and disputed shipments as Washington places more emphasis on human rights in its escalating confrontation with Beijing. To successfully address forced labor and other ESG concerns in the textile and footwear supply chains, corporate leadership pledges and persistent, cautious execution by the procurement and supply chain departments are required.

According to McKinsey analysts, achieving a supply chain "sustainable goals is an all-encompassing organizational problem and frequently involves transformation for both the product portfolio and the organization." a foundational element of an effective supply chain.

Trekker

The ESG project provides an accurate and up-to-date map of supply chains, one that reaches several levels below direct suppliers to identify vendors and subcontractors. These elusive indirect suppliers may be the source of severe environmental harm and worker exploitation. The Apparel Supply Chain Transparency Pledge and the potential New York statute both have transparency standards that may be met by businesses with the use of such mapping.

The New York law, which could have an effect on retailers as diverse as Shein and Prada, mandates that companies map out at least 50% of their supply chain processes at each stage of production, identify and communicate the process's detrimental social and environmental effects, and establish goals to lessen those effects. According to CBS News's early January investigation, the stores must then achieve their goals and report their yearly compliance.

Pull V/s Push

ESG is receiving more attention from a range of stakeholders, including younger customers who are increasingly adopting an ethical buying perspective and consumers who demand an emphasis on sustainability and social responsibility from their fashion firms. Major retailers are putting downstream pressure on their suppliers to enhance their ESG performance. In light of global warming, investors and governments are pushing businesses to be more transparent across ESG parameters. According to one E&Y survey, "74% of investors worldwide are more likely to divest from companies with poor ESG track records".

Additionally, we may anticipate that enterprises in distant regions where environmental and labor standards were previously less severely enforced would be subject to increased scrutiny and that circular business models will no longer be an option.

As a result, the long-term prognosis is that every participant throughout the value chain of the garment industry now faces an additional challenge and the opportunity for growth.

The aforementioned insights are aimed at providing input into the most pressing issues impinging on growth and challenges in ESG in the Textile/Fashion industry and have been prepared for general informational purposes only.

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09 September 2022, Mumbai:

The textile sector, which ranks among the most polluting in the world, must look into sustainable practices to reduce resource consumption and pollution. Thus there is greater scope for Textile companies as one would reckon that by bringing down total energy use per unit of output at manufacturing plants using renewable inputs such as solar, hydroelectric, and landfill gas. Another argument for gaining currency is the credible use of decentralized renewable energy which promises to modernize and catalyze the textile industry's growth. Also, the good news is that it clearly has the potential to improve the livelihoods of millions by being a sector generating huge jobs creator & an economic force multiplier.

Time to invest in renewable energy expansion

Textile trade is now started to look at strategic investments in renewables to boost energy independence and reduce carbon footprint. Investing in renewable energy is a good long-term strategy for fund managers and green funds alike. Corporates/groups partaking in interest in the renewable energy sector reckon that it is poised to play an absolutely critical/pivotal part in the future as technology sustainably keeps advancing and demand for clean energy will only develop. A good bit is controlling carbon emissions, large-scale renewable power projects also provide demonstrable economic benefits for multi-stakeholders investors and borrowers alike.

Green Funds & Green Investing

Green Investments — Green investments typically are businesses or sovereign/pensionary funds piggy-betting on the urgent need to reduce harmful pollutants or use resources more consciously the clamor for which keeps getting louder. This paper focuses on various green funds, and green investing companies currently investing in reducing carbon emissions across the textile sector. Need of the hour is to shift to sustainable green power in order to remain internationally competitive within this turbulent market environment,” note Richard König, CEO of Enery, and Lukas Nemec, COO of Enery.

"Global players like Lenzing group in order to reduce its carbon emissions even further in line with our strategic targets, aiming in the future to rely to an even greater extent on electricity generated from renewable energies. Concepts such as these will make us less dependent on global energy markets in the medium to long term and further support our transition from a linear to a circular economy model,” comments Stephan Sielaff, Lenzing Group CEO. In 2019, Lenzing became the first fiber manufacturer to set a target to reduce its carbon emissions by 50 percent by 2030 and to be climate neutral by 2050.

Need of the day

One data point which is stood out for us while presenting this article is that" The economic rationale for investing in clean energy is clear and the message is written loud & clear on the walls".

There is an urgent need for efficient and trend-setting interaction between energy companies, regional policymakers, and industry, with a clear win-win situation for all parties involved. Furthermore, renewable energy is a panacea to combating global climate change as the crisis is already upon us.

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07 September 2022, Mumbai:

The current visit of the Bangladesh PM to the Indian side is part of the enduring high-level political engagement between the two neighbour ally nations. Both sides have shown keenness to start negotiations on a bilateral Comprehensive Economic Partnership Agreement (CEPA) later part of the year underpinning new identified sectors to consolidate & deepen their bilateral relations to expand bilateral trade and investment.

Here it is very topical to mention that CEPA will be among the trade agreements Bangladesh is prioritizing with its major trade partners, as it will lose duty benefits once the country graduates to developing nation status in 2026. To place it on records India and Bangladesh this Tuesday signed seven meaningful agreements spread across sectors, including water resources, railways, space technology, judiciary, scientific and technological cooperation, and TV broadcasting. It was a part of

Sheikh Hasina is here on a four-day state visit. Importantly sources indicate more youth exchange programmes are on the anvil. Furthermore, next month India will receive a 100-member youth delegation from Bangladesh.

One of the key takeaways from this bonhomie is that leaders of both countries have agreed to deepen further develop partnerships in sectors like the upgradation of railway projects in that country. India is in good earnest pushing for greater cooperation with Dhaka in various sectors.

Piyush Goyal, Textile Minister, stated," There is a certain inevitability that two countries for mutual gainful situation need to build resilient supply chains and explore investment growth opportunities in areas like textiles, jute products, and leather and footwear".

Perspective

Industry data reflects conspicuously that Bangladesh is India’s sixth largest trade partner with bilateral trade rising from $2.4 billion (two points four) in 2009 to $10.8 billion in 2020-21. India is the world's fifth biggest T&A/T&C exporter with a shy of 5% share of the $840 billion global market, while China has more than a third of the global market share.

Also, it is to be noted that now is the time for taking a share of the existing pie rather than anything else given global trade is shrinking & current macroeconomic variables.

Putting it in immediate context India's exports were neck to neck with nearest rival Bangladesh roughly a decade ago but over the years latter has leapfrogged- particularly on apparel/garments - amongst many of the reasons due to higher labour costs, disadvantages of lack of FTAs/LDC/MFN status etc that make Indian apparel/clothes 20% or thereabout pricier.

Two-way street

Given the common shared values, the two nations have India presents a big market opportunity for Bangladeshi apparel suppliers if the central government pursues the given policy intervention of the current dispensation. The FBCCI president said earlier that," India could be a major supplier of yarn and cotton to the garment industry in the near future and called for developing infrastructure in the Indian part of the border land ports to boost trade, according to Bangla media reports".

The paper tries to present the data analysed by Team AR from various sources to pack a punch that, India exported US $ 1.72 billion worth of cotton yarn to Bangladesh in the calendar year 2021 from that of US $ 657 million in 2020 and the US $ 539 million in 2019.

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