Talking Property | The Lobby Series: Fashion’s Impact on People and Planet

Hello and welcome to this special edition of Talking Property with CBRE. The Lobby Series is a collection of intimate talks with industry experts that uncover how we can maximise the human experience in the spaces we frequent everyday. Each episode takes place in the lobby of some of Sydney's most iconic buildings and brings together our very own in-house experts with market leaders who are shaping our future cities. We hope you enjoy these insightful conversations.

KB
Hello, I'm Kate Bailey. I'm a director in the research team here in the Pacific, and I'm the Head of Retail and Alternatives Research at CBRE Australia. I'm really thrilled to be here today in the iconic Fullerton Hotel, located in GPT Sydney, in Martin Place in the heart of Sydney's CBD, and I'm very delighted to be joined by Gordon Renouf, who is the founder and CEO of Good On You, the world's leading sustainability ratings for fashion brands. Before starting Good On You, Gordon was the consumer advocate for 30 years, including as head of campaigns at Choice and as a board member of Consumers International. Thanks so much for joining me today. Maybe to kick things off, we know in recent years we've had this big focus in the fashion industry from all the way through the supply chain and really that fixation on ESG. You know, I'm just really kind of keen to understand if a company can still be profitable by implementing those sort of factors.

GR
Yeah, what Good On You does is to rate fashion brands for their impact on sustainability, the impact on people, planet, and animals, and reduce that. And we look at maybe up to a thousand different indicators, but we reduce that down to a score out of five for the ease of use by the consumer. And we are seeing that brands that rate highly on our score are doing well and are profitable. You've got large brands like Patagonia, you've got challenger brands like Allbirds and Nudie Jeans. And then here in Australia we've got a great number of brands that are doing really well on sustainably and also on business. You've got Outland Denim, you've got Afends, Spell has improved a lot on sustainability over the last few years, you've got smaller brands like Citizen Wolf. In fact, one Australian Victorian brand, A.BCH is quite possibly one of the most transparent brands in the world. So we are really doing quite well with a number of our brands here.

KB
Yeah, and I know that every decision that Good On You makes is sort of guided by the UN's 17 principles and we're just really kind of keen to understand those 17 sustainability goals and why they're important to you and what they mean to your business.

GR
Yeah, I mean, I think it's always good for people to act in within a framework that's shared by other organisations. And the UN has, as you would know, 10 or 15 years ago established the sustainable development goals. And one of those is that we must create sustainable systems of production and consumption. And we've gotta do that because we've got to live within our planetary boundaries and business must adapt and consumers must adapt so that we don't, you know, run out of resources in the world. And it would be also in the sustainable development goals, it's this emphasis on justice and equity between people. And so we know that the fashion industry employs 80 million people, most of them in the developing world and not always in great jobs. And so there's work to be done to encourage and promote brands to do better there.

KB
I think thinking about some of those bigger trends in retail, and obviously immersive retail is something that we're talking about a lot and when we say immersive retail, we're really thinking of if you might have a sports brand, maybe you have a, a basketball court in there, you're really utilising technology VR to really engage and draw people in. Do you think that that type of retail is actually just going to fuel our consumerism? Or do you think that maybe that that will give us a bit more of a nuanced way of purchasing?

GR
I think that's really up to everybody, to brands, to shopping centre owners, to retailers to decide how they want to build immersive retail and whether they want to take advantage of the potential that there is there to make the consumer sustainability journey easy. I mean, we know that many, many consumers are interested in sustainability. Perhaps 50% of people feel bad when they're not making sustainable choices that align with their values, but it's got to be really easy to do. People aren't out there trying to buy a sustainable item. They want to buy sports shoes, they want to buy a dress for an event, a wedding or something. And sustainably is something that they would like to have as well, not instead of the product that they're buying. And so they need easy access to information. So, back to immersive retail, how can that help?

I think it allows consumers to get much more ready access in a layered way to the information that will help them make sustainable choices. Um, and it also I think, opens up opportunities in the circular economy. There's an increasing intensity for brands to also offer rental services of their clothes. At a lower price point. And that attracts different consumers to that brand. And it also solves the problem of the dress you only want to wear once, right? And resale is a really booming trend and brands can also take advantage of resale and take back their own products and have a resale range as well. So there's a lot of ways in which you can kind of build that into the retail experience. And sizing is another area where we get a lot of returns because the size isn't right, but if you can see how it fits and use those kind of features to get the sizing right, whether that's through online shopping or in place - in a pop-up store that doesn't have all the stock, for example. You can actually reduce waste that way as well.

KB
That's really interesting. I mean obviously some of those trends that you spoke about then, it's a bit of a vex topic, but keen to think back to Covid and some of the biggest impacts you think Covid had on the industry.

GR
Yeah, I think there are three that I want to call out. The first is that it really accelerated the move to e-commerce, although e-commerce globally is still only around 20% of things like fashion. It's growing steadily, but physical retail's obviously the dominant and will stay that way for some time. The second is a bit of a sadder story is that those 80 million workers in the fashion industry in developing countries, when brands had to cancel orders because they were seeing people not in stores and not shopping in March April, 2020, that had really terrible impacts on the factories that were supplying them and the workers in those factories. And some brands did the right thing and some brands did not do the right thing. And we're seeing a bit more of that again now with the uncertain economic times that there's been a number of areas of fashion where orders have dropped quite substantially and that's seen impacts upstream on those suppliers. The third thing that I want to call out is that we saw in 2020 with Covid just an amazing increase in interest in sustainability and a bit of a shift in the overall mindset. Now I think the underlying interest in sustainability has always been there, but the fact is it's just that much easier to find the information you need now and that's going to continue and good on you, whoever wants to be a part of that. So that's the story we're telling.

KB
Maybe just to wrap us up, you know, really keen to hear from you some consumer trends that you're forecasting.

GR
There's a couple we want to pull out. So I mean, we talked about this circular economy and how secondhand resale is just a growing thing. I mean, shopping your wardrobe, but selling your wardrobe as well and moving to things like rental and buying secondhand as well. And buying secondhand doesn't necessarily mean buying something that's, you know, really worn out and in vintage, but happens to be vintage. It can be luxury stuff that's been worn once at half the price. So the options are there. So that's one. I think another one is a lot of focus on making sure brands are treating everybody with respect, so size inclusivity and gender neutral, non-gender specific clothing options, are emerging trends. And I just think sustainability is a trend that is not going away as well.

KB
Yeah, absolutely. That's super interesting. Thanks so much for your time, Gordon, and thank you all for joining me today. I know that I've really gotten a lot out of that conversation. I feel like there's a lot of change happening quite quickly and speaking about how easy it is to start making some of those decisions, it feels like we're going to be able to make them a lot easier going forward. So thank you again for your time.

GR
Let's hope so. Thanks, Kate.

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