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Return on Sustainability Investment

Apparel Industry Sustainable Strategies Framework

Novel research assesses sustainability efforts across the value chain, identifying eight strategies for apparel companies to drive impact.

ROSI Helps Apparel Companies Make Strategic Investments in Sustainable Business Practices

There are numerous material environmental, social and governance (ESG) issues facing the apparel industry including unfair labor practices, pollution, waste, and climate change. In addition, the COVID-19 crisis has created new crises (e.g. supply chain disruptions, labor and employee challenges) while also presenting opportunities for companies to find innovative ways to connect with consumers and to ensure resiliency in their supply chains. But companies lack sufficient frameworks and methodologies to understand how their investments in tackling these challenges can drive positive financial value for their companies.

With support from HSBC Bank USA, NYU Stern Center for Sustainable Business partnered with a set of apparel companies on the ROSI methodology to estimate the value of tangible and intangible benefits that apparel companies can accrue by making strategic investments in more sustainable business practices. We engaged companies including EILEEN FISHER, Reformation, and REI in the project, and conducted both primary and secondary research leveraging industry experts, company contacts, and academic literature to inform our framework. To view a full overview of the process and the strategies framework, click here.
 

Eight Strategies for Success

Our research found that there are eight key sustainability strategies that apparel companies are focusing on to drive impact in their business models. These include operational efficiency focused activities such as improving chemical management and waste management, improving sustainable raw material sourcing, and rethinking business models through a focus on increasing circular economy practices and improving people well-being. Underneath these eight practices we’ve identified over sixty practices and sub-practices that describe the crucial activities companies are undertaking to realize and implement their strategies. For example, we found that companies are realizing their goals to increase sustainable raw material sourcing by both integrating more sustainable raw materials (i.e. increasing organic materials, and investing in R&D to identify new sustainable alternatives) and also incorporating more reused and recycled materials (e.g. by designing product to reuse fabric scraps).

This website will continue to be updated as we develop additional tools and resources. We welcome feedback and partners to further our work. Please reach out to Sophie Rifkin, Director of Corporate Research and Engagement, NYU Stern CSB (srifkin@stern.nyu.edu) to discuss further. 

 

Apparel Industry Sustainable Strategies Framework

To dive deeper into each of our eight strategies, please click on the corresponding sector that you are interested in learning more about.

Case Study: Employee Wellbeing


As a company with a strong commitment to culture and values, REI sought to better understand whether or not its investments in an embedded sustainability strategy and a strong culture focused on sustainability leads to higher employee engagement, and by extension, higher employee retention and overall higher employee satisfaction. 

Read the case study

Case Study: Circularity and Energy Management

As a leading sustainable apparel company, EILEEN FISHER sought to identify and monetize its current financial and societal benefits of prioritizing lower carbon modes of transportation and investing in circular take-back programs.

 

READ THE CASE STUDY

Monetization Toolkit

Energy Management

Drawing on our case collaboration with EILEEN FISHER on the financial and societal benefits of shifting transportation modes, this tool will help to quantify the relevant data components. 

Employee and Supplier Well-being

Drawing on our case collaboration with REI on the investment in employee well-being, this tool will help to quantify the value of lower turnover rates and increased employee productivity due to increased corporate engagement.

Learn more and Download the tools

Circularity and Innovation

Drawing on our collaborations with several apparel partners to determine the incremental value of circular programs to parent companies, this tool will help to monetize relevant benefits from such programs.

Sustainable Apparel Resources

We have compiled additional resources including a list of organizations that are working on issues relevant to the apparel industry, such as product design & innovation and sustainable sourcing. Examples of organizations included are the Sustainable Apparel Coalition, Apparel Impact Institute, and Textile Exchange. 

Click here to see the resources

Project Launch

HSBC, EILEEN FISHER, REI on Driving Profits Through Sustainability

At the Bloomberg Sustainable Business Summit, CSB Director Tensie Whelan moderates a panel of participating project partners as they discuss Return on Sustainability Investment (ROSI) across the apparel industry and in their companies.

Thank You to our Sponsor, Company Partners, and Research Team

CSB contributors to the project include Tensie Whelan, Sophie Rifkin, Rithu Raman, Kevin Eckerle, Elyse Douglas, and Randi Kronthal-Sacco. We would like to thank our funder, HSBC Bank USA, our company partners, including Amy Hall, Cynthia Power, Dinc Urkun, Matt Thurston, Carrie Freiman, and Jessica Ozella. Lastly, we thank our student assistants who made fantastic contributions to this endeavor. Our thanks go to Dylan Berry (MBA '19), Hannah Gotfredson (MBA '20), Ben Gottesdiener (MBA '20), Chana Rosenthal (EMBA '22), and Christine Tan (MBA '21).

We would also like to thank the funder Formas, The Swedish Research Council for Sustainable Development, and The Center for Sustainability Research, Stockholm School of Economics, who supported components of this research. 
 

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