The fashion industry is responsible for up to 10 per cent of global carbon emissions, with sustainability now at the forefront of conversation across the industry. This year’s Australian Fashion Week saw the event opened by designer Bianca Spender, with 90 per cent of her collection made using deadstock – excess fabric otherwise destined for landfill.

While some brands define sustainability through their use of up-cycling or low-energy garment making, the reality is sustainability can only be achieved when companies also act responsibly across their entire operation, including the supply chain. However, the challenge is supply chains are longer, broader, and more global than ever before.  

According to Mckinsey, two-thirds of the average company’s environmental, social, and governance (ESG) footprint lies with suppliers. A clear understanding of where a business is spending is critical to optimising operations more sustainably, procuring goods and services from sustainable suppliers, and moving operations towards a future of zero emissions, zero waste, and zero inequality.

Sustainable procurement through spend data

The reality, however, is that many organisations still rely on point-to-point methods to connect to their customers, suppliers, manufacturers, distributors, contractors, and service providers. That leaves companies siloed, with minimal visibility into their spending, and deriving no value from the vast data generated by all their transactions. 

Spend data is one of the most under-utilised resources in business today. Every company needs to spend money, but with robust spend management solutions, companies can arm themselves with the necessary insight to connect profitability with ethical and sustainable practices.

Leveraging business networks

Matching the bottom line to the green line is possible through collaborative business networks that drive purposeful spending. Implementing a business network platform enables retailers to collaborate with all trading partners across the supply chain, including suppliers, logistics and services providers, asset operators, maintenance contractors, and more. By becoming part of a business network, organisations have access to a vast pool of business intelligence, providing organisations with the information required to make more strategic decisions in line with current and emerging market conditions and consumer expectations. Significant financial benefits can also be seen, with improved supply chain visibility producing an estimated 23 per cent improvement in revenue by preventing stockouts, increasing coverage, and reducing process costs around buying and planning.

Holistic steering and ethical reporting

The fashion industry is making strides to mitigate its environmental impact and customers are responding. According to research by Deloitte, 63 per cent of consumers are willing to pay more for products where social impact values are demonstrated, which is where Holistic Steering comes into play.

Holistic Steering and reporting are when enterprises measure both the positive and negative impacts of their business activity on people and the planet to steer balanced decisions and achieve holistic, sustainable business success. 

Retailers looking to grow in today’s market can find new ways to drive sustainability across their procurement operations, and it’s through the right technology and solutions that retailers can align their business purpose with profitability. Consumers are already willing to pay a premium for environmentally friendly products, and retailers who can demonstrate this stand to gain a significant advantage over those who cannot.

Profit and ethics now run parallel, improving consumer lives and creating more meaningful ties directly back to revenue and cost reduction. Success in the new normal requires an alignment of business and ethical goals, clear and transparent reporting, and a thorough understanding of each business in the supply chain. Sustainability is now core to the success of many fashion retailers, and with consumers demanding businesses do more, companies must consider not only the manufacturing of goods but operations across the entire supply chain.

Chris Willcocks is vice president & head intelligent spend management at SAP Australia and New Zealand.