Profits over People, Why business metrics need to include Profit, People & Planet
It seems the good times just keep on rolling for the billionaire boys and girls in fashion and retail.
The Fashion industry is one that just churns out billionaires, the rich keep on getting richer. And I have no problem with hard work paying off! BUT I can't lie, the thought of the ever growing net worth’ of fashion and retail tycoons like Amancio Ortega the owner of Zara who’s current net worth is a staggering $75.7 billion and Bernard Arnault, the owner of the world largest luxury goods company LVMH, whose net worth stood at $80.7 billion at last count (2018), makes me feel uncomfortable when I then look at the sorry state of fashion, textiles and retail as a whole. Of course, I am not saying that these men along with the billionaires within fashion and retail are personally responsible for the mess of fashion industry. But, I would ask the questions, where does their responsibility lie? ....
Capitalism has allowed for mere mortals to catapult themselves to 'god' like statues, creating net worth’s that could easily clear many country debts (mine included) and still have enough change spare for a yacht or three and the best luxury life one could imagine on earth. But, let me be clear I am no anti-capitalist campaigner, and I truly believe that if you work hard, apply yourself then you should be entitled to the just rewards. But what if every time you added a BIG chunky zero to the end of your net worth, a factory you use to make your clothes, is operating at such a dangerous level that it crumbles and kills masses of innocent hard working people? What if the factory you own actively practices in basically enslaving/ imprisoning women and children in harsh, inhuman work environments? (I heard of factory that did not have one working toilet, despite the hundreds of staff) What if the garment workers in your supply chain are so underpaid they cannot afford a basic home? What if the clothes you produce are killing animal life by depleting clean water supplies? What if the dyes you use in your garments result in crop failure because the harsh toxins have stripped bare local arable land? What if the clothes your company produces cannot be recycled and end up in landfills, or burnt or dumped in developing countries? What then?...
If we look at the current mode of business that has created the worlds SUPER SUPER wealthy, can we honestly say that it needs no improvements?
Can we say that the restructuring of business should not always just consider and measure profit, in lieu of people and planet?
Is there a mode of business, which can incorporate profit, people and planet?
Is it possible to create strategies for fashions circular future.
I am personally sick of hearing the absolutely nonsensical reasons for the unnecessary deaths in Asian factories, where billion dollar brands are operating. At what point, does it become ‘normal’ or ‘ok’ to increase the salaries of Western based executives, while many of the factory workers within the supply chain do not even receive a living wage? Which is, the minimum income necessary for workers to meet their basic needs.
Just take a look at this years world cup, while Adidas and Nike battled it out for most teams sponsored by forking out $100’ of millions for teams to wear their logos. According to the Clean Clothes Campaign
“The brands decided to spend their money on football players rather than on the workers stitching their shirts and shoes.”
If we are going to be completely honest, this sorry state of a supply chain is hardly surprising or even a stand alone case, as so much emphasis in business is placed on profitability as a key business metric, which of course leads to the outright ignoring of other important metrics like the state of the humans working within supply chains or the environmental impact of businesses. It leads to great business leaders taking purely profit based decisions over anything else, hence why the likes of Nike and Adidas have moved their manufacturing to places like, Indonesia, Cambodia and Vietnam because labour is just how these big companies like it – CHEAP!
Nike’ share of production cost that end up in factory workers hand is only 2.5% down from 4% in 1997, for a company that grosses $30 billion plus, its shocking!
Yet Adidas and Nike are part of the ever-increasing number of oh so obliging companies that have signed up for fair trade associations and other sustainable initiatives, only to continue making quite frankly unethical decisions in the way their factories are operating..…and why is this? Because many of the countries they choose to manufacture in turn a blind eye, so long as this big brands are operating and providing local ‘job's’.
See its all very well and good for companies like Nike and Adidas to sign petitions like ‘The Allegiance to Workers Rights’ as they did in 2011, a trade union agreement for workers rights but then what ground difference does that really mean when suppliers are constantly being squeezed on production which naturally leads to garment workers salaries taking cuts.
The easy route for fashion houses is to agree, agree to workers rights, agree to stop using toxic materials, and agree to clean up their factories. But what isn’t easy, is putting these things into practice, its not easy to engage in a supply chain clean-up, maybe because it is not viewed as ‘profitable’.
Yes, there’s no hiding that fashion has created a huge amount of billionaire’ (Fashion & retail was the industry with the second most billionaires-according to Forbes), so the question now is, for an industry that has been so linear, in lining the pockets of fashion entrepreneurs, is it possible to now go circular? Can or should the success metrics be inclusive of the impact these business leaders and global brands are having in creating positive and sustainable socio-environmental impact whilst running profitably?
I believe its time for these billion dollar fashion houses, to take a stark look at themselves, their operations, their global impact from supply chain practices to human dignity and realise that people and planet are equally as vital as profits, not everything in business or life should equate to monetary profitability and anyway wouldn’t a clean happy environment, lead to long-lasting profits?