Summary of the event "Integrating Global Value Chains in the Creative Industry"
In anticipation of COP 26, the NGO Hecho por Nosotros (HxN) and the B Corp Animaná hosted a workshop for Climate Action titled Integrating Global Value Chains in the Creative Industry. The virtual event brought together seasoned experts discussing the challenges and opportunities to address the climate impacts of the fashion industry. Among the participants, outstanding figures included Adriana Marina, founder of Animaná & Hecho por Nosotros, and keynote speaker Nikolay Anguelov, PhD associate at UMass Dartmouth. The sessions were also animated by great leaders of the textile and fashion industry, worldwide experts in sustainability, and professionals from Ashoka, UNECE, FAO, and academics from Latin America, India, Africa, USA and Europe.
Nikolay Anguelov, whose research links economic development, sustainability and public finance, underscored the need to push the agenda towards a paradigm shift in fashion. In his latest book The Sustainable Fashion Quest: Innovations in Business and Policy, the researcher tackles growing paradoxes in the industry. Anguelov provided the example of emerging fashion innovations and business models that are causing an exponential growth in the use of polyester and synthetic fibers. Fast fashion is evolving and is now broken into sub-industrial sectors, including super-fast fashion and other models that are heavily based on items derived from petroleum & chemicals. Among them, athleisure and functional apparel (robotic apparel that begins to be normalised and sold into mass markets).
As regards digital innovation, social media often facilitates the spread of misinformation. In fact, user-generated content -such as sustainability claims shared by influencers- are rarely questioned. But if we look on the bright side, the digital creativity and online consumption boosted by the pandemic and post-pandemic worlds can considerably benefit small sustainable businesses. Digital tools can give them a lot of visibility and competitiveness, thereby compensating their absence in physical retail.
Nikolay Anguelov also touched on the core of greenwashing, condemning some “outright lies” that cannot lead to a systemic change: clothes recycling, improved waste management, (false) organic claims, circularity…Their popularity is supported by “misleading messaging” such as the concept of carbon neutrality or the overuse of the word sustainability. Misleading messaging also involves increasing alternative advertising targeting the 12-16 year-old population, he claimed. Indeed, the main demographic and target of fast fashion are young customers who are supposedly caring more than their elders about the environment. “We are missing two generations of customers by addressing our message to adults”, said the researcher.
A systemic change in the fashion industry also requires to give relevance to legislative and policy-making platforms, but these are currently “empty institutions”, said Nick Angelov. These platforms are indeed mostly created by consultancies whose self-assessment tools are greening out companies' operations.
The discussions further unfolded around innovation and technology as a double-edged sword for climate action. They converged towards similar conclusions: technology is a means, not an end to support climate action. And successful implementation depends on a collaborative and inclusive approach.
Adriana Marina remarked that inclusiveness and collaboration are key to break the silos of the tiered fashion industry and to give visibility to good practices. This is why Hecho por Nosotros is spurring a paradigm shift together with a wide ecosystem of actors to colearn, to co create solutions, and to connect sustainable grassroots to global markets. The HxN Toolkit Igniting Circular and Sustainable Fashion Through Collaboration is like a Swiss knife for stakeholders who wish to take that step and be part of the change.
Amongst these solutions, animaná and Hecho por Nosotros are looking to democratize technology innovation in support of sustainable value chains. Artisans and MSMEs (the grassroots) constitute a fundamental base in the upstream of fashion supply chains: they need to be considered in the digital transition. A key challenge identified during the workshop was the need to bridge the gap between technology literacy and the grassroots, through capacity-building. Take the example of cell phones. Nowadays, most people in remote communities possess one, which gives them plenty of opportunities. But few are aware of them.
Co-creation is also necessary to impulse constructive dialogues and to reassess the situation from the grassroot and local communities perspectives. This way, inclusiveness can improve the viability and scale up the positive impact of technology.
Despite presenting different social gaps (educational, financial, digital, etc.), the grassroots have valuable knowledge and practices to share with the world. Adriana Marina stressed the importance of listening to the artisans, the MSMEs, to identify their bottlenecks and to learn from them and from the problems that they are facing. In this context, Hecho por Nosotros is developing a Transparency and Traceability app that can be enhanced by the grassroots themselves. After receiving capacity building, they are ready to use the app and to create their own digital ID, their passport. This is then up to them to tell us about the core sustainability of their business and their commitment to the SDGs.The app includes a smart digital catalogue and, in the future, a marketplace will complement it. Such marketing tools are dramatically needed to shift the paradigm that is shaping our current value chains.
One of the main topics of the workshop was Blockchain and Decentralized Finance as a leverage of Climate Action for the grassroots. Alternative financing models can be more inclusive than traditional ones, giving affordable and safe access to savings, credit and investment. Blockchain and cryptocurrencies also bring producers closer to consumers through direct financing. This allows them to save and invest without intermediaries, eliminating a series of costs and procedures, whilst allowing them to show credit scoring. They can also help emphasize their good practices thanks to the traceability created by the transactions. Animaná, the Proof of Concept of Hecho por Nosotros, has been working for years in integrating sustainable grassroots into global value chains. The company sees in cryptocurrency a major opportunity to give an economical identity to local communities. Animaná is already implementing a case of study that will be replicated.
Another central theme of the conversation presented by Adriana Marina was the role of Transparency and Traceability systems in sustainable value chains. The complexity of textile and fashion value chains implies little or no visibility beyond tier 1 or 2. Therefore, sustainable added-value and climate good practices are often lost in processes. They are segregated in silos that are not connected one to each other. Transparency & Traceability is needed to break these silos, to give visibility to good practices and to improve due diligence. As a consequence, key stakeholders can be engaged and empowered with this information, and better consumption & production models are more accessible. For instance, by scanning a simple QR code, a customer can make an informed decision.
During the discussion, the toolbox of the UNECE initiative on Transparency & Traceability in the Garment & Footwear industry -jointly implemented by the International Trade Center (ITC) and the European Union- was presented. Hecho por Nosotros is a partner of UNECE in this project where it represents the voice of the grassroots in Latin America.
Through T&T systems, artisans and MSMEs can showcase their good practices, and share their sustainability claims about regenerative practices, women empowerment, the generation of economic growth for local communities, the use of natural fibers and dyes etc. Some of them are ancestral practices based on holistic models, a great inspiration and high added-value for international markets. This is also a chance for the local population to reclaim the legacy of their traditional cultures.
However, lacking infrastructure and missing technology knowledge at grassroots level represent tremendous challenges for the adoption of T&T solutions, notably in developing and transitioning countries. Other obstacles were identified during the discussion such as the costs of technology and the limited number of tech solutions that can cover an entire supply chain. Moreover, in the fashion industry, specific issues can complicate the initial task of supply chain mapping for T&T systems: the complexity of fashion value chains (e.g. combining vertical and horizontal flows) and the variety of sourcing methods (e.g. with the mixing of different fibers) for instance.
Choosing the right technology was underscored as an important factor for success. For example, the grassroots need lightweight, easy to use and open source technologies. Data Ledger Technology (DLT) can be a viable option, notably Blockchain, which guarantees data integrity, data confidentiality and interoperability in complex value chains.
In order to develop inclusive T&T solutions, capacity-building on technology was once again evoked. Animaná and the NGO HXN have been working for over 12 years on capacity-building. It is a central piece in the HxN Toolkit which was recently enhanced and digitized to scale up its outreach. But as mentioned at the beginning of the article, technology is a means, not an end. Beyond technology, other solutions such as inclusive data collection and verification methods (e.g. relevant self-assessment tools) should be developed in co creation with the grassroots.
More details soon of the break rooms.