The Venice Sustainable Fashion Forum was held last 24 and 25 October. This initiative was born from the collaboration of three key partners – Sistema Moda Italia, TEHA Group and Confindustria Veneto Est – and today sees the participation and support of 19 partners who share its values and objectives, recognising the need to initiate a serious and urgent debate on the theme of sustainability in the fashion industry.

During the third edition, in particular, the ‘Just Fashion Transition’ study was presented, addressing the progress, challenges and opportunities for the fashion supply chain inherent in sustainable transformation, in order to promote a collaborative dialogue and develop concrete solutions. The 2024 edition focused on two key questions that guided the research process: What will the fashion industry look like in 2030?  How are fashion supply chains embracing change?

European fashion industry eight years behind schedule

According to the results highlighted by ‘Just Fashion Transition’, the European fashion industry may be eight years behind in meeting its climate targets. Although it has succeeded in decoupling economic growth from CO2 emissions over the past 6 years, it seems that at current rates it will only be able to meet the binding climate targets of Fit for 55 by 2038. Catching up with the projected decarbonisation pathway will require additional investments of €24.7 billion by 2030. Alternatively, reducing production volumes in order to stay within the planned emission limits is likely to result in 8 times higher revenue losses, and according to an analysis of the balance sheets of more than 2,686 companies, the required investments seem unlikely to be sustainable for 92% of the Italian companies in the supply chain.

Regulatory uncertainty hinders competitiveness

As its geopolitical influence in the world is steadily decreasing, 10 years after the Paris Agreement, Europe continues to promote sustainable transition mainly through laws and regulations. However, the lack of operational guidelines and well-defined regulatory frameworks is a source of uncertainty for businesses, at least for the next five years, and thus a brake on competitiveness compared to the rest of the world. In particular, while sustainability requirements and tools are increasingly focused on large companies, SMEs do not seem to be taken into account as much. They find themselves having to bear the burden of compliance without sufficient resources – a limitation that threatens to widen inequalities and hinder their competitive potential in a regulated market.

Furthermore, despite the EU’s increasing focus on end-of-life management of fashion products, the available infrastructure still does not seem to be adequate. While the European Commission is pushing towards waste recovery and reporting on unsold products, destruction is still a common disposal method for returned and unsold products in Europe, with 264,000-594,000 tonnes of textiles estimated to be destroyed each year (4-9% of the market). Furthermore, while up to 79% of unsold stock is recovered, only 57% of online returns manage to be handled in the same way, with handling costs amounting to 55-75% of the retail price. Furthermore, the revision of the Waste Framework Directive in 2023 introduced a new Extended Producer Responsibility (EPR) scheme, imposing a per-brand taxation based on ecodesign to promote durability and recyclability, with the support of Digital Product Passports; while Italy has already established separate collection systems for textiles, only 3 out of 4 cities have adequate facilities to manage it, with an actual collection potential of only 2.7 kg per capita compared to the 23 kg put on the market each year.

The weak role of the European financial sector

The European financial sector does not yet have all the levers to be the engine of the Just Fashion Transition on the continent. Without adequate financial support and a regulatory framework facilitating access to sustainable funds on the capital markets, the transition risks being underfunded, exacerbating inequalities especially among SMEs, which today account for almost 98% of the entire sector.

To date, only 35% of investments dedicated to the transition of European SMEs have been supported by external funding, and only 16% of these actually qualify as ‘sustainable’.

Few are in step with decarbonisation

Only one third of Europe’s 100 largest fashion companies are keeping up with the speed of decarbonisation required, the rest are lagging behind. On the one hand, the 34 large European fashion companies that are reducing their emissions twice as fast as required by Fit for 55 show that decarbonisation is possible. On the other, this highlights a significant lag for the rest of the sector. Furthermore, while progress is being made on climate, among the 100 largest EU companies only 7 companies are transparent about living wage and 28 still do not publish a Sustainability Report. Finally, the integration of ESG performance into variable executive pay is a widespread practice in only 25 per cent of companies, in contrast to other sectors where this share exceeds 90 per cent.

Lack of skills and low margins penalise Italian supply chains

Lack of skills and low margins make it difficult for Italian supply chains to cope with rapid change. Attention to ESG issues among companies in the Italian supply chain has decreased by about 3%, particularly among SMEs with revenues <€30m. In particular, manufacturing companies in the textile and apparel sectors show the highest level of sustainability awareness in the Italian supply chain, with values increasing as size increases, while leather, knitwear and footwear are further behind, especially among smaller companies. Large companies, in particular those with a turnover of more than €80 million, show a stronger sustainability watch in all segments analysed.

The main factors behind this slowdown are the lack of in-house expertise is the main obstacle for the lack of ESG presidium, while low profitability, constantly decreasing (between 7 and 11%), as well as high debt ratios make investments in decarbonisation difficult to sustain for about 92% of the companies, especially in the tanning and clothing sector.

The responsibility of governments

If the sector does not invest enough, European consumers may have to give up 21 garments per capita by 2030. Furthermore, although second-hand can be seen as a sustainable alternative to fast fashion, its benefits are reduced by the rebound effect: for every new garment purchase avoided, an average of 1.23 used garments are purchased. According to global consumers, governments are the main actors whose environmental actions are insufficient. In Europe, particularly among young people, there is a growing awareness that sustainability entails costs and sacrifices. However, this does not seem to translate into adequate action.

Conclusions

Neither markets nor institutions have yet achieved the pace required for a Just Transition. The annual growth of OECD economies is expected to drop by almost 30 per cent by 2060 to 1.3 per cent, mainly due to the decline of the working-age population, with a significant impact also on the emerging G20 countries23. At the same time, 2023 was the hottest year ever and scientists warn that without immediate action, most climate risks could reach critical or catastrophic levels by the end of the century, especially in southern Europe. Economic losses from coastal flooding alone could exceed €1 trillion per year.However, zero-emission policies are projected to result in global GDP growth of 7 per cent over projected levels if inaction is taken.

In this context, without structural changes, it seems unrealistic for companies and businesses to prosper. It is therefore important to highlight three key points today:

– markets and pricing systems do not incentivise sustainability. On the contrary, it is often perceived as an unprofitable investment, motivated mainly by ethical or compliance reasons;

– regulation alone will not be sufficient to accelerate the sustainability transition. On the contrary, it may push companies towards an approach geared more towards reporting than towards improving performance.

– the costs of transition cannot be assessed alone. Rather, the costs of action should be measured and compared in the long run with the costs of inaction, which in the case of climate change can be difficult to manage.

5 Proposals for a European Just Fashion Transition to 2030

– Institutions need to close the regulatory gap quickly in order to allow companies to make medium- to long-term decisions.

– Simplify financial instruments for SMEs to enable them to invest in sustainability by providing easier access to credit and offering favourable sharing.

– Build and disseminate skills at national level, involving universities and research to test scalable solutions, developing initiatives to disseminate among SMEs the skills needed for the transition and create a future-proof workforce.

– Develop a national strategic plan to identify ways to integrate sustainability costs into price structures, facilitating the eradication of caporalisation, as well as sharing time, methods and tools to combine public and private financing.

– Feed the process of market concentration, especially among SMEs, to increase productivity and investment capacity, including through tax breaks and access to credit, but also with public funding.   

From the return of production to Italy to the choice of shipping instead of air transport, from the installation of solar panels to the electrification of processes: the initiatives put in place by fifty Italian companies in the fashion supply chain that have joined the 4S PLANET programme show how the sector is moving from words to deeds in the fight against climate change. ‘Decarbonisation projects are at the heart of the virtuous strategies of many brands and, consequently, of the production companies that are part of their supply chain,’ explains Francesca Rulli, creator of 4sustainability® and administrator of YHub. ‘The first step is to measure the total consumption of the factory, detailing it by process down to the individual stage or machine. By doing so, reduction potential can be identified. It is not just a question of installing photovoltaic panels or switching to green energy: the real challenge is to rethink production processes.

The fashion industry is responsible for a significant share of global emissions, estimated at between 2% and 8% of the total. ‘Today, brands demand very detailed information on environmental aspects, but very few value – also in terms of price – materials produced with a lower impact on the climate,’ concludes Francesca Rulli. ‘There are however positive signs. Some brands have started to measure the contribution of their supply chains to reducing emissions, to enter into more important partnerships with virtuous companies. ‘There is a lot of talk about climate justice, i.e. the concept that everyone should contribute to climate action on the basis of their own responsibility, avoiding that the most vulnerable pay the price. Here, in the fashion industry, this is an example of climate justice’.

The 50 companies that have joined 4S PLANET are implementing actions in four strategic areas:

1. Rethinking sourcing: ‘Some areas may guarantee lower costs in the short term, but be more vulnerable to the impact of the climate crisis, due to water shortages, extreme weather events, extreme temperatures that make production more difficult, etc.’. The company is called upon to assess these trends in the years to come, safeguarding its business continuity,’ Francesca Rulli points out.

2. Innovating machinery and plants: Here, the ability to innovate, invest and manage makes the difference. Sustainability is sometimes still described as a cost, but in reality it is an investment, also because it leads to the optimisation of resources, thus generating a competitive advantage,’ continues Rulli.

3. Converting energy sources: ‘On the one hand we need to act on electrification, replacing methane gas where possible, on the other hand we need to ensure that this energy comes from renewable sources, through the installation of photovoltaic panels and the choice of green energy suppliers.

4. Transforming logistics: ‘The reshoring of production in Italy is positive because the EU has evolved regulations in environmental and social terms. For freight transport, the ship is preferable to the plane, while for corporate mobility, we focus on electric and hybrid models’.

On 25 November, on the occasion of the international day against violence against women, Scarpe&Scarpe’s project Scelta D won the Libellula Foundation’s ‘Libellula Inspiring Company 2024’ award for the category Caring Actions, dedicated to companies that intend to promote activities aimed at preventing and combating violence and gender discrimination inside and outside the workplace. The award ceremony took place during the event organised by Fondazione Libellula at the suggestive location of the Blue Note in Milan. Scelta D is the social responsibility initiative of Scarpe&Scarpe for the benefit of D.i.Re, which provides 10 jobs for women who have found shelter at the association’s anti-violence centres. The project wishes to offer tangible support, with the aim of making women free and independent.

But that’s not all: in addition to the employment of women, Scelta D also involves Scarpe&Scarpe employees in awareness-raising meetings on violence in all its forms. In addition, the figures most in contact with employees have been involved in training sessions, during which they have been provided with information on how to recognise potentially dangerous situations.

On the point of sale side, a communication campaign is underway in each of the 136 Scarpe & Scarpe shops with messages inside the shop and on the shop windows, as well as a fundraising campaign directly at the points of sale and addressed to all customers, which has already raised about 130,000 euro in 6 months throughout Italy. 100% of the amount collected is donated to D.i.Re.

WomenX Impact is not just an event, but a concrete point of reference community in the world of women’s empowerment. The fourth edition, which took place in Milan from 21 to 23 November, involved the participants through talks, workshops and moments of confrontation.

Reviewing her own entrepreneurial experience, Chiara Mastrotto, President of Gruppo Mastrotto, emphasised how professionalism and the ability to step out of the comfort zone have been decisive in guiding a company transformation, centred on innovation and sustainability, founded on well-defined values.

‘We are a company that has learnt to open up over the years, welcoming diversity to the point of making it a founding element,’ she explained. ’For us, what matters is that we have created an environment governed by meritocracy, where women, as well as men, are judged on the basis of their preparation and can embark on successful paths.’

During her speech, Chiara Mastrotto shared her vision on how the tanning industry and the fashion sector should grow from a female employment point of view, especially in verrtice positions. A path that Gruppo Mastrotto is very clear about, as the data show.

‘While on a national level the tanning sector only sees 20% of women employed, Gruppo Mastrotto stands out with an overall percentage of 30% female employees, reaching 50% in clerical roles and 60% in managerial positions, with perfect gender parity within the Board of Directors. Numbers that are not linked to particular programmes, but the result of the company culture and values’.

Finally, an important message was addressed to young women aspiring to leadership roles: be courageous, set challenging goals, and keep learning. ‘What I feel like saying to women today is to come prepared, living leadership as women and not thinking that you have to work like a man would.’

Like every year, the International ESG Day was held on 30 November, a day aimed at promoting the principles of environmental sustainability, social responsibility and ethical governance, an opportunity to reflect on the importance of measuring and improving performance in these areas, promoting dialogue among stakeholders and encouraging the sharing of best practices and useful tools for developing effective ESG strategies. On this occasion, an alarming fact emerged: 47% of companies still use the ‘old’ spreadsheets to manage ESG data, a practice that can generate errors, difficulties in aggregating information and operational inefficiencies, compromising regulatory compliance and the overall effectiveness of the process, despite the fact that 83% express great confidence in their sustainability reporting capabilities. ‘Building a credible ESG programme requires verifiable, accurate and high-level data that meets the needs of stakeholders and regulators,’ comments Bruno Natoli, CEO of Mia-FinTech.  A goal that becomes difficult to achieve when most ESG data is stored in disconnected and separate reporting systems or even spreadsheets’.

Therefore, the use of technology to collect, analyse, report and ensure the accuracy of verifiable ESG data becomes crucial. It is no coincidence that the global ESG software market is projected to reach 2.7 billion by 2032, with a compound annual growth rate of 14.3% between 2024 and 2032 and an increase of approximately 222% over 9 years, according to a very recent report by Global Market Insights. This growth is mainly driven by increasing pressure related, on the one hand, to the focus of companies and investors on sustainability and, on the other hand, to regulatory compliance, especially in Europe, where the ESG software market is strongly influenced by legislation such as the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD), which oblige companies to implement detailed and transparent ESG reporting practices, stimulating the growth in demand for advanced technology solutions.

‘Legacy systems make it difficult to address these challenges because they lack the flexibility and integration capabilities required to collect and manage data from multiple sources. Today, in order to overcome information silos and facilitate effective communication with stakeholders, companies need scalable and rapid solutions that allow sustainability data to be aggregated in a centralised manner. This approach not only improves operational efficiency, but also ensures greater transparency and the ability to respond in a timely manner to the needs of regulators and investors,’ Natoli concludes.

Pushing on collaboration within the supply chain, this was the main theme of the reports displayed at UNPAC’s Ordinary Assembly 2024, held last Nov. 26 in the PO.TE.CO. conference hall in Santa Croce sull’Arno. On the same occasion, the Italian producers of tanning auxiliaries provided for the renewal of the Board of Directors in office for the next two years, from which emerged the name of the new president-designate: Pierluigi Braggion of Corichem.

The guests
The proceedings opened with greetings from Fabrizio Nuti, president of UNIC-Concerie Italiane, and Roberto Lupi, vice president of the Santa Croce Tanners’ Association, who also spoke on behalf of the Ponte a Egola Tanners’ Consortium. In their speeches a spur to the consolidation of a spirit of aggregation of the leather supply chain, to bring to Europe a unified voice representing tanneries, chemists, mechanics and manufacturers. This was followed by speeches by: Mario Serrini, Assomac Councilor; Gionata Moroni, Director ASSA Association of Contract Manufacturing; Franca Nuti, President AICC Italian Leather Chemists Association; and Valerio Talarico, Director PO.TE.CO. UNPAC Secretary Maurizio Maggioni read a message of good wishes and cooperation sent by Riccardo Boschetti, president of the Veneto Leather District.
All speakers emphasized the need to join forces to be more incisive, both in training professional figures and in directing the technological development of the sector.

Supply chain collaboration is increasingly essential

Outgoing UNPAC President Marco Frediani also reiterated the importance of collaborating and consolidating a greater spirit of belonging of all supply chain forces, contextualizing the current difficult and articulated economic situation affecting the sector also with international geopolitical tensions. His message focused on the need to invest in research, innovation, development, sustainability, quality, resilience, and flexibility to promote efficiency and growth of supply chain companies, adopting individual and system strategies that help resist market uncertainty, positioning companies competitively toward a tomorrow of low-carbon and high-tech companies and products.
The floor was then passed to outgoing Vice President Pierluigi Braggion, who well summarized the association activities completed, emphasizing the need for the new Executive to give continuity to the good things achieved so far. The Venetian entrepreneur urged everyone to consider the Association as a container of ideas, a driving force for more effective interaction between and with members, to help achieve a common strategy that alone companies could not, and sometimes would not know how to, address.
This was followed by a presentation, given by Christian Baio and Arianna Civiletti of SPIN 360, on the importance of the agreement reached with UNPAC for the definition of a system LCA, useful to characterize and certify the impact of tanning auxiliaries.
In conclusion, the UNPAC 2024 Assembly delivered a strong and clear message: supply chain collaboration is the key to meeting future challenges and ensuring the competitiveness and sustainability of the Italian tanning sector.

The private session
The assembly continued with the private session reserved for members only, which saw the budget report given by Francesco Lapi, Board member with responsibility for treasury, who emphasized, in addition to mere figures, the importance of companies’ contribution to activities supporting standardization and voluntary certifications, and not least the support to the populations of the flooded areas of Emilia-Romagna with the liberality granted in 2023. Ilaria Lotti, head of the association’s Supervisory Board, then reported on the control of the proper management of activities and the results achieved, in compliance with the organizational and management model.

The subsequent vote by the delegates of the member companies then decreed the composition of the new Board of Directors, in office for the biennium 2025-26.

The news UNPAC Board of Directors

Braggion Pierluigi– CORICHEM Srl, president designate
Meucci Andrea– DERMACOLOR Srl, vice president designate
Vantin Laura– CHIMICA VEMAR Srl, designated treasurer
Annunziata Stefania– REPICO Spa
Cazzola Gianmario– C.G.R.D. Srl
Cisco Diego– GSC GROUP Spa
Frediani Marco– KLF TECNOKIMICA Srl
Knebel Cesar– CODYECO Spa
Lapi Francesco– FGL INTERNATIONAL Spa
Montecalvo Andrea– ALANCHIM Srl Poles Eric– SILVATEAM Spa
Rosati Claudio– LMF BIOCHIMICA Spa