BDO's Mark Schiavello discusses the war on waste and why sustainability is becoming more important than ever for retailers.

A recent Environmental Audit Committee document out of the UK revealed that a number of major retailers - including Amazon UK, JD Sports, Sports Direct and TK Maxx, "were found to be lagging behind the rest of the industry when it came to their commitment to environmental sustainability and labour market initiatives".

Following the revelations that Burberry was burning unused products in 2017, the committee approached 16 of the UK's leading retailers to further understand the industry's impact on the environment. The report concluded that the current business model for the UK fashion industry is unsustainable and that exploitative practices must end.

As consumers, the Rana Plaza tragedy which killed over 1,100 garment workers changed the way we viewed fashion. Consumers now question who makes the clothes they wear every day and in what kind of conditions. The following stats are reflective of the paradigm shift that has occurred:

1. Google searches for the term "sustainable fashion brands" increased by 25 percent from 2017 to 2018, and by 61 percent since 2016.

2. 42 percent of millennials and 37 percent of Generation Z said they want to know what goes into their products before they buy

3. Rank and Style reports that editorial mentions of the term "sustainable fashion brands" among publications like Elle, Vogue and Refinery29 increased by 83 percent in between 2017 and 2018 — up by 267 percent from 2016.

To thrive in the current retail environment, companies must provide transparency on how they are delivering a sustainable offering. With the emergence of new technology such as Blockchain, brands will have the ability to trace every step of the value chain. This type of transparency will be a key requirement for tomorrows consumer.

K-Mart provides transparency on its sustainability performance, including how it sources its products ethically. As part of its commitment to sustainability, K-Mart conducts 1,000+ audits of its suppliers' factories each year. A corrective action plan is provided to all factories that fail to meet their Ethical Sourcing Code and follow-up audits are scheduled to ensure compliance.

As a small apparel business how can you ensure you are delivering your product sustainably without incurring unstainable cost increases? Sourcemap ( allows brands to view company-specific metrics and performance indicators on sustainability, social compliance, performance and risk, and create customised cascading requests for information to collect new information from the sub-tiers of the supply chain.  Through its work with the apparel sector, Sourcemap has developed a tool for companies to map their supply chain.

In such a crowded fashion marketplace, it's the brands that lead with integrity, consistently innovate, and best communicate their ethical and environmentally-conscious values to their audiences that will thrive.

Contact Mark Schivaello and learn more about how BDO can help your retail business.

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