Master’s Degree in Economia e Gestione delle Aziende Curriculum “International Management” Final Thesis Sustainability in the Fashion Industry: The Key Role of Traceability for Responsible Companies Supervisor Ch. Prof. Mario Volpe Graduand Francesca Vigolo Matricolation number 848835 Academic Year 2018 / 2019 2 Alla mia famiglia, che mi accompagna lungo la mia strada. 3 4 Index Introduction ..................................................................................................................... 9 1. Sustainability in the fashion industry ....................................................................... 13 1.1 Introduction to sustainability........................................................................................... 13 1.1.1 The Triple Bottom Line theory .................................................................................... 15 1.1.2 Commitment of countries for a sustainable development: main measures and the 2030 Agenda for Sustainable Development ........................................................................ 19 1.1.3 Commitment of companies for a sustainable development: Corporate Social Responsibility ....................................................................................................................... 25 1.2 Sustainability and the fashion industry ........................................................................... 28 1.2.1 Circular Economy ........................................................................................................ 33 1.2.2 The role of consumers: growing attention towards sustainability .............................. 37 1.2.3 The Fashion Pact ......................................................................................................... 40 1.3 Global certifications and standards ................................................................................. 42 1.3.1 ISO 14000 Standards ................................................................................................... 45 1.3.2 SA 8000 International Certification Standard ............................................................. 47 1.3.3 The greenwashing phenomenon ................................................................................ 48 1.4 Sustainability and fashion companies ............................................................................. 49 1.4.1 Why being a sustainable company: the advantages of sustainability ......................... 52 1.4.2 Measure impacts and document sustainability .......................................................... 53 1.4.3 Global Reporting Initiative (GRI) ................................................................................. 57 2. Fashion supply chain traceability and transparency ................................................ 59 2.1 Complexity of the supply chain in the fashion industry.................................................. 59 2.1.1 From a linear to a circular fashion model: the sustainable supply chain .................... 62 2.2. Traceability for sustainability: the importance of being transparent in the fashion industry ................................................................................................................................... 66 2.2.1 Traceability models ..................................................................................................... 68 2.2.2 Advantages and challenges related to traceability ..................................................... 71 2.3 How to implement traceability in fashion supply chains ................................................ 74 2.3.1 Traceability systems .................................................................................................... 76 2.3.2 Technological innovations for traceability .................................................................. 78 2.4 The Fashion Transparency Index ...................................................................................... 83 2.5 A successful example: Patagonia, Inc. ............................................................................. 85 2.5.1 “We are in business to save our home planet”........................................................... 87 2.5.2 Traceability and transparency in Patagonia, Inc. ........................................................ 92 5 2.6 A successful example: Monnalisa S.p.A. .......................................................................... 95 2.6.1 Traceability and transparency in Monnalisa S.p.A. ..................................................... 97 3. Case studies: implementation of traceability for sustainability ............................ 101 3.1 Methodology .................................................................................................................. 101 3.2 Qualitative interviews .................................................................................................... 104 3.2.1 Gianfort S.r.l. ............................................................................................................. 104 3.2.2 Voltan 1898 .............................................................................................................. 106 3.2.3 Calzaturificio Bellò .................................................................................................... 109 3.2.4 Stivali S.r.l. ................................................................................................................. 111 3.3 Analysis of the case studies using sustainability indicators .......................................... 113 3.4 Final observations........................................................................................................... 122 Conclusions .................................................................................................................. 127 Appendix ...................................................................................................................... 131 Bibliography ................................................................................................................. 133 Website citations ......................................................................................................... 137 6 List of figures Figure 1: Triple bottom line ............................................................................................ 16 Figure 2: Sustainable Development Goals ..................................................................... 23 Figure 3: SDGs prioritized by companies ........................................................................ 24 Figure 4: Perceived impact of 2018 trends on executives' businesses .......................... 29 Figure 5: Growth of clothing sales and decrease of clothing utilization ........................ 30 Figure 6: Phases for a new textile economy .................................................................. 36 Figure 7: GRI Standards .................................................................................................. 58 Figure 8: Main impacts of the linear model in the fashion industry .............................. 61 Figure 9: Circular economy model ................................................................................. 65 Figure 10: Traceability models and level of transparency associated with them .......... 70 Figure 11: Traceability technologies applied in Martine Jarlgaard collection ............... 82 Figure 12: Transparency level of the 200 biggest global fashion brands in 2019 .......... 84 Figure 13: Patagonia advertisement from November 25, 2011 edition of The New York Times ............................................................................................................................... 87 Figure 14: Worn Wear project in Milan ......................................................................... 90 Figure 15: The Footprint Chronicles ............................................................................... 93 Figure 16: Monnalisa's supply chain structure............................................................... 99 Figure 17: Gianfort S.r.l. - company logo ..................................................................... 104 Figure 18: Voltan 1898 - company logo ....................................................................... 107 Figure 19: Calzaturificio Bellò - company logo ............................................................. 109 Figure 20: Stivali S.r.l. - proprietary brand logo ........................................................... 111 Figure 21: Gianfort S.r.l. - Social indicators .................................................................. 115 Figure 22: Gianfort S.r.l. - Environmental indicators ................................................... 116 Figure 23: Voltan 1898 - Social indicators .................................................................... 117 7 Figure 24: Voltan 1898 - Environmental indicators ..................................................... 118 Figure 25: Calzaturificio Bellò - Social indicators ......................................................... 119 Figure 26: Calzaturificio Bellò - Environmental indicators ........................................... 120 Figure 27: Stivali S.r.l. - Social indicators ...................................................................... 121 Figure 28: Stivali S.r.l. - Environmental indicators ....................................................... 122 Figure 29: Sustainability performances of the case studies .......................................