Vera Galarza has been working as sustainability manager in the fashion industry for many years. In that position, she has been involved with many industry-wide organisations seeking to implement better practices. As such, she has been able to acquire unique insights into the industry, including its complexities, pitfalls, and developments. We spoke with Vera to learn about her experiences, thoughts and vision around the future of the fashion industry in terms of social and environmental sustainability.
About Vera Galarza Tell us a bit about your background? What brought you into fashion and which roles have you had within the industry?
I started as a social compliance consultant in 2005. Back then there were not so many of us. In the role I was given the opportunity to travel to more than 65 countries and conduct audits, verifications, inspections, root cause analysis, trainings in all type of industries. I learned so much during that time.
After 8 years of traveling and not seeing a lot of changes in the visited factories, I became curious on how the brands are managing the social compliance program. That is how I started my journey in the fashion industry in 2012. Since then, I went on to manage the sustainability and impact departments of two global fashion brands, one apparel and one footwear.
In the years that you have worked as a sustainability manager, how have you seen the industry change or develop?
I believe all the fashion brands have been going through a lot of changes and innovation is a crucial skill needed for all in the responsible business. For example, at the beginning of my career in the fashion industry, we started with putting in place demanding monitoring and scoring programs towards our suppliers. Later we moved on to a more data driven approach focusing on raising awareness, dialogue, and collaboration. It has been very interesting to be part of these changes. I have also observed the challenge of green/white washing, which basically undermines any progress.
“It’s penalizing the people that are doing the real stuff, because they can’t prove that, and it’s favouring the people that are not doing the real stuff, because they can claim without being challenged on the reality of this stuff.”
Emmanuel Faber, the ousted CEO of Danone in a recent interview
ENVIRONMENTAL SUSTAINABILITY
On the streets and in the press, we increasingly hear about the necessity for businesses, also in the fashion industry, to become more environmentally sustainable. In how far do you feel companies are embracing this and bringing about the required change?
Growing awareness of our planet’s climate emergency and global inequalities have moved the fashion industry into an unfavourable spotlight. The industry is believed to be a major contributor to air, water, and soil pollution. It is also seen as an enabler of exploitative sweatshop conditions for garment workers in production facilities around the world. This unglamorous reputation is bad for business and a high risk.
In response, fashion brands have created their own sustainability programs to assure employees, governments, consumers, and investors, that they are improving/addressing their social and environmental impact. Today, all major fashion brands claim to be engaged in sustainability efforts. Many, however, are struggling and indeed failing, because they are using a flawed definition of sustainability, unscientific methods, and selective implementation. In many cases: greenwashing.
The fashion industry has the potential to create positive impacts for business and society. It can catalyse decent jobs and opportunities that support socio-economic development in the global south. Even though a lot has been done and put in place, it is far from being enough. Governments and companies need to embrace the challenge. It is time for governments to show action.
THE PEOPLE SIDE OF FASHION
The fashion industry is, of course, also often criticised for the way workers are treated throughout the supply chain. In your experience, are companies addressing this enough? In which areas (or types of companies) have you seen improvements and where are we still far from where we should be?
Massive fashion retailers can negotiate aggressively with supplier factories on price. This automatically drives down workers’ wages. The fact that brands can quickly and easily source their product from lower wage economies, increases their negotiating leverage with factory owners. Factory owners, in turn, pressure their governments not to increase the statutory minimum wage, to ensure that their country and their manufacturers do not lose business to other states with lower minimum wages.
More often than not, voluntary schemes also pursue the lowest common denominator and fail to drive transformation towards greater sustainability. For those companies with a less complex supply chain, a limited number of products, and who engage in dialogue with their suppliers, improvements have been observed. Nevertheless, government action is essential. Even the best standards developed with transparency and honesty at their core, need governance and accountability to make them sustainable.
From the companies and organisations that you have seen in your career, have you come across technologies, certifications, or ways of working that are particularly effective in supporting the people in the value chain?
I have examined numerous sustainability initiatives – including the most influential, created for and by the leading brands. Among those I know, none make an attempt to measure sustainability in terms of meeting the needs of the world’s poor. By and large, the focus is on environmental impact. Almost without exception, brands and initiatives – even government-run initiatives like Germany’s Green Button that seek to certify sustainable textiles – conflate sustainability with environmental impact.
A growing number of apparel labelling schemes are being rolled out with the aim of persuading brands and consumers to purchase clothing and materials described as ‘sustainable’. At the present time, minimum ethical standards are regularly not met. The criteria required to obtain the label are often not comprehensible or accessible.
Ensuring that suppliers pay wages correctly and on time for their workers is a start. But to meet sustainability commitments in the true sense, it is not enough. To meet the Sustainable Development Goals priority must be given the needs of the world’s poor. The poor in the global fashion chain are farmers and wage earners, primarily in manufacturing. The interests of both these groups must be front and centre in any sustainability claims.
THE FASHION SYSTEM
Many of the purpose-focussed entrepreneurs running small companies tell us that they struggle with implementing novel solutions because they do not have the size and resources to persuade suppliers to take on different approaches. How do you think these entrepreneurs can help bring about systemic change in the industry?
I highly admire all the purposed-focused entrepreneurs on this journey. I believe that to reach systematic change, the fashion industry needs to change the way of doing business. Entrepreneurs running small companies may have to create their own value chains which cannot be the same as existing fast fashion chains. One idea would be to enable collaboration among entrepreneurs, for example in the shape of an open chain platform which provides the possibility to share suppliers and manufacturers willing to join the sustainability journey. I also believe that it is important to choose your battles. At this moment, it is not possible to work on ALL the sustainability issues related to the small companies and their stakeholders. To ensure meaningful and long-term impact, it is important to prioritise.
Of course, changing course can be more difficult for a larger ship. In how far do you feel that large companies are capable to change course with the effectiveness and urgency necessary? What can individual professionals within larger organisations do to nudge their companies and/or their supply chain partners?
As famously communicated by the business round table in 2019, companies should do business for the benefit of all stakeholders: customers, employees, suppliers, communities, investors. It sounds easy but, in practice, it is almost impossible because not everything is a win-win situation. Sustainability managers like to make the point that responsible business is profitable in the long term. I completely agree with this. However, that is different than saying we can satisfy all stakeholders all the time. As a leader, you need to regularly prioritise and avoid getting trapped in a knot of idealism while trying to satisfy all stakeholders. This is very tricky as you have to align decisions with the company strategy as well as with industry trends.
The other challenge is that businesses are under pressure to do the right thing for a lot of topics. To name a few: climate change, supply chain oversight, diversity and inclusion, social justice, inequality… The net result of this is that businesses tend to embark on all topics. But the reality is that you cannot be involved in all these issues and still do your job of running your business. In defining their strategy, companies need to prioritise on topics then stick to this prioritisation so that it does not become a shallow PR exercise.
For a successful strategy, there is a full landscape of possible social, environmental and governance issues that could be relevant to your business and stakeholders. Once you have the full list, it is important to prioritise. It is essential is to understand that not all issues can be tackled and that the prioritisation of issues need to be agreed upon and embedded within the global business strategy. This exercise can be repeated until the issues list decreases.
‘I feel sorry for sustainability managers’, a head-hunter once told us. ‘They have to get employees to adopt sustainability tools and directives that often stand in the way of the KPIs they are assessed upon.’ How do you see the role of the sustainability manager? What would a sustainability manager need to be able to effectively implement environmental and social sustainability strategies?
True. The way the sustainability department is positioned nowadays is, in many cases, contradictory and not working. If you think about it: there have been so many advances in ESG/ sustainability, but the composition of management boards has not evolved much. I am not saying that boards need to hire climate scientists but oftentimes they are dominated by people who don’t know what they don’t know [about sustainability issues] and therefore aren’t asking the right questions. That’s a huge problem. There are many qualified people that could fill this gap.
Sometimes it feels like there is so much more noise around diversifying a company in terms of social identities than in terms of backgrounds and skills. Boards think that they can hire a few consultants or do a bit of training on key concepts to close the capacity gap. But what is really needed is a systemic understanding of the organization and its externalities. Because that’s how you drive innovative and creative solutions. Having said that, government action is essential, because even the best corporate initiatives can’t solve all our challenges.
If you would be put at the head of a ‘traditionally run’ fashion company, what changes would you implement first?
Basically, the business model. Stop overproduction, it is just not sustainable. Stop producing ‘crap’ and move to long-lasting, qualitative products. Understand where materials come from and try to source these directly to be aware of the social and environmental impact. And finally, be transparent in challenges encountered, the efforts put in, celebrate positive impacts and create multi-stakeholder collaborations ready to address negative impacts.
Circular business models, new technologies, increased collaboration, societal change. Are there developments or innovations that give you hope that we can change the fashion industry as we should be?
Definitely. I’m very hopeful. There has been an enormous amount of dialogue and effort around transparency and disclosure. For very good reason. I mean how do you hold a company accountable on an issue like social justice or climate change if you do not know what they are doing? In my view, transparency does not automatically equate accountability. And even though sustainability investments and reports have increased drastically in the last years, during the same period, carbon emissions have continued to rise, and environmental damage has accelerated. Social inequity, too, is increasing.
Companies are putting a lot of effort into data collection for disclosure, at the expense of doing something about the issue and applying all these developments and innovations for a meaningful impact. If you look at how companies are measured and assessed on these efforts a lot of these measurements are based on quantity of disclosure and not the quality, so as long you are disclosing something you get points of investors. On the other hand, companies that disclose the most are also targeted by activist. Even though transparency is essential, I am worried that we are going to spend the next 10 years perfecting our measurements rather than using developments and innovations to create the change.
However, there is a momentum, and we will keep on working on ensuring change. Again, government action is essential, we need to find the smart mix to be successful.
Connect with Vera Galarza
Vera Galarza is a highly experienced sustainability manager. She has worked with several companies to build sustainable and impactful systems and business models, engaging with a multitude of stakeholders in the process. In building responsible supply chains she has built strong skills in developing strategic partnerships between the private sector, academia, civil society, and the public sector. Connect with Vera on Linked-in.