The fashion industry is increasingly targeted as needing major reform to bring it into the circular economy world. In this article, the outgoing acting chair of Seamless, which claims to be the world’s first circular product stewardship scheme, delves into the importance of governance to shape a better future for its stakeholders.
As I conclude my term as acting Independent chair of Seamless, Australia’s clothing stewardship scheme, I’m reminded more than ever of the vital role governance plays in shaping a future that honours both present realities and long-term objectives.
Seamless is Australia’s clothing stewardship scheme and the world’s first circular product stewardship scheme. It aims to make Australian clothing circular by 2030 and significantly reduce the 222,000 tonnes of clothing that currently go to Australian landfills each year.
We help Australians choose, enjoy and recycle clothing more responsibly by working together with retailers and key stakeholders so that people and nature thrive. We are building a critical mass for collective progress, with nearly 60 brands and retailers registered as stewards, and more than 110 supporter organisations across the clothing value chain.
In these complex and often turbulent times, balancing today’s needs with tomorrow’s aspirations is not simply a duty, but a strategic imperative demanding the attention of every Director across every Board.
Governance, at its core, establishes the rules, practices and processes that ensure accountability, transparency, and ethical behaviour in the pursuit of an organisation’s objectives. It’s the framework that guides decision-making and ensures things are run well.
At Seamless, robust governance is foundational for ensuring sound and sustainable financial stewardship as we pursue our purpose. It becomes even more critical when we consider our specific stakeholder deliverables – the essential environmental and social benefits we are obligated to create for the natural world and its inhabitants, and which can only be fully achieved through industry-wide participation.
There’s no denying that almost every sector, including apparel, faces significant headwinds. Some of these are impeding how our economy can be reshaped into one that thrives whilst generating value for a broader group of stakeholders.
The term “poly-crises” hardly seems sufficient. The majority of Australians are confronted by a cost-of-living crisis squeezing discretionary spending. As a result, ultra-fast fashion continues to grow relentlessly, gobbling up mainstream fashion market share, as financially constrained consumers trade down.
The anti-ESG agenda of the new US administration has been embraced by some corners of the Australian business community. Growing geopolitical unrest and the economic threat posed by trade wars loom large. And the politicisation of critical social and environmental issues by select segments of the media diminishes the importance and respect these matters urgently deserve.
Yet, amidst this, positive disruptors are emerging. The growth of the clothing resale, rental, and repair markets is rapidly accelerating, with the global resale market growing at double the rate of new fashion sales, according to ThredUp.
Global regulatory shifts, including the EU Green Deal and its many directives, are accelerating the adoption of circularity, transparency and consumer empowerment. China’s emergence as a clean energy superpower is setting the pace for other global economies. Australia’s mandatory climate reporting signals a growing national commitment to embedding environmental accountability within our economy, incentivising sustainable practices across all sectors, including clothing.
These forces, both negative and positive, require a strong and steady strategic response. We must double down on our commitment to build better systems that prioritise human and environmental wellbeing without compromising financial rigour.
Now more than ever, it is imperative to reframe ESG not as a short-term expense but as a long-term investment. To do this, directors need to be confident that operational teams can demonstrate to stakeholders and shareholders that sustainable transformation drives immediate returns and long-term resilience. It has been my observation that truly competitive businesses build resilience to these risks and leverage material issues like sustainability as a core driver of motivation, innovation and growth – “good” can, and must, be good for business.
The responsible organisations that have joined Seamless recognise that the benefits of best-in-class sustainability practice are leading to stronger employee engagement, greater industry collaboration, commercially sustainable innovation, improved access to capital, and deeper customer loyalty.
These outcomes are measurable and essential. I shared these sentiments in the first episode of the Seamless Leadership podcast, and many executive leaders who also featured in the podcast series shared similar workplace realities.
I believe that governance is not just a framework; it is the foundation of vision, resilience, and legacy. So, my counsel on strategic action for directors and decision-makers undertaking purposeful transformation is to:
- maintain fortitude for the moral obligation: We must articulate the business case behind every initiative, whether driven by risk or opportunity, and demonstrate the economic value creation in sustainable transformation – yet we must also acknowledge the profound moral obligations inherent in these issues and summon the courage to champion them.
- elevate governance: the “g” in ESG is more critical than ever. Strong governance frameworks embed sustainability into strategy, protect against short-termism, and uphold trust with your most critical stakeholders, starting with employees and extending to customers. Backtracking on commitments risks eroding stakeholder trust and causing lasting reputational damage, outweighing any fleeting gains.
- harness stakeholder purpose: In directorship, actively seek to contribute to a larger, lasting purpose. Embrace connection and collaboration with other purpose-driven leaders and critical stakeholders to fuel your optimism and drive the action needed to tackle the complex and interconnected systemic challenges facing our organisations and our industry.
Chair Rosanna Iacono will be succeeded as acting chair by permanent Independent Chair, Kylie Hargreaves.
