The fashion industry has recently begun to receive negative attention from stakeholders across the globe because of the high environmental impact of its value chains, from raw material extraction to clothing manufacturing, transportation, and textile waste.
According to the UN Environmental Programme, the fashion industry emits around 10% of global CO2, making it one of the most polluting sectors of the economy – only surpassed by energy, transport, construction, and manufacturing. It is responsible for around 92 tonnes of pre- and post-consumer waste every year, the degradation of natural environments, and the depletion of water reserves.
The dominant business model in the sector, fast fashion, thrives on quick production-consumption cycles, low prices that appeal to large demographics, and the instrumentalisation of short-lived trends. Since its inception in the 1990s, this model has grown exponentially, but today it has become evident that it is not compatible with global climate goals.
The rise of sustainable fashion
With the inclusion of ESG on corporate agendas, the search for profitable and environmentally responsible alternatives is imperative.
Sustainable fashion is allowing the harmonisation of these two elements through material innovation, new business models based on circularity, the shift to small-batch production, and the use of environmentally safe textiles and dyes.
Recent estimations place the value of the sustainable fashion market at 7.57 billion USD, a modest share within the context of the global textile market, valued at 1.5 trillion USD. However, its value is expected to reach 15.17 billion USD by 2030 thanks to the rise in popularity of eco-friendly consumer goods.
Consumer behaviour in the Middle East is shifting
This growth is driven by increasing stakeholder interest in business models in line with ESG principles and is becoming a significant consumer trend that is reshaping shopping behaviour globally. This is especially significant in the MENA region.
The most recent Global Consumer Insights Survey conducted by PwC with respondents from Egypt, Saudi Arabia and the UAE revealed that consumers in the region are more ESG-conscious than the global average.
Globally, 54% of consumers claim they care about the environmental impact of their purchases and shop accordingly to their values, compared with 75% of Middle Eastern consumers. Likewise, 72% of consumers in the Middle East choose to buy products from transparent and traceable sources, compared with 55% globally.
Regarding the role of consumers in the move of the fashion industry to greener practices, Araceli Gallego, founder of Goshopia.com and country coordinator for Fashion Revolution in UAE insists that “consumers need to be more conscious, ask the right questions, be more mindful and know what they support with their dirhams. Sustainability has become a buzzword and we see positives and negatives in it. The fact that people are talking more about it is making more consumers aware and more brands initiate the journey to be more sustainable but at the same time we are seeing an alarming increase in terms of greenwashing – when things are marketed as eco-friendly, but they are not in reality.”
Businesses in the textile and fashion sector in MENA are in a privileged position and can leverage consumer interest to open new markets around sustainability and green innovation.
Embedding ESG into the luxury sector
The Chalhoub Group is the leader in both luxury and sustainability in MENA. Since 2009, it has made strides around ESG and advanced corporate decarbonisation with the ambitious goal of becoming net zero by 2040.
They are diving into the circular economy by leveraging strategic partnerships that can bring them closer to their 2030 goal of becoming a zero-landfill company, and by promoting innovation through regenerative approaches to design and production to extend the life cycle of their products.
One of the success stories within the Group is that of the first sustainable collection of Level Shoes, made entirely with eco-friendly and low-impact materials. The brand is also exploring how to offer circular alternatives to its customers by offering them refurbishing and repairing services and creating resell schemes within its platform. Both initiatives aim to extend product life, thus diverting significant amounts of waste from landfills.
Creating the right ecosystem for innovation
According to the Ellen MacArthur Foundation, the implementation of circular practices and business models represents a 560 billion USD opportunity for the fashion sector.
Global brands are seizing the opportunity to profit from innovative business models and new low-emission manufacturing technologies. This is the case of the fast fashion giant Shein, who is working on energy efficiency and waste reduction through new manufacturing technologies, such as the recent introduction of digital thermal transfer into their operations.
However, finding a place in the market is more complex for conscious designers and smaller brands. According to Araceli Gallego, “we [at Goshopia] work very closely with the designers who are part of our sustainable lifestyle platform. They often mention the difficulty of finding sustainable fabrics in the region, the higher cost to produce locally, and the resistance from clients to pay a higher price even if justified by quality. The UAE is still a very brand-driven market and independent fashion designers don’t have that allure or influence heritage brands have.”
DGrade, a UAE-based manufacturer specialising in making uniforms and workwear out of recycled plastic for eco-conscious companies, is setting an example of leadership in the region. Managing Director Emma Barber, noticing a positive trend in many companies in the MENA region that are switching to uniforms made of sustainable fabrics, claims that “the UAE, in particular, is very forward-looking, embracing new technologies and supporting sustainability.”
Governments are following suit by incentivising sustainable textile business practices. Morocco, one of the main textile exporters to Europe, is creating opportunities for the sector by creating a favourable environment for conscious entrepreneurship through a series of government subsidies, as well as the support of the Moroccan Investment and Export Development Agency (AMDIE).
The country’s strategy is based primarily on developing green industrial zones powered by renewable energy and introducing hemp-based products, a highly versatile and environmentally friendly textile with untapped potential.
Setting an example for other countries across the MENA, Morocco’s sustainability strategy has great potential to create new market opportunities, attract investments and promote exports.
MENA has all the ingredients to future-proof their fashion market through the introduction of ESG principles: eco-conscious consumers who are willing to shift their shopping habits to fit their values, success stories in the private sector that prove that there is value in innovation, and policy precedents that pave the way for the generalisation of green practices.