From fiber to apparel: closing loops along the value chain Robert van de Kerkhof, Chief Commercial Officer. Fashion Summit HK, 7 th September 2017
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1 From fiber to apparel: closing loops along the value chain Robert van de Kerkhof, Chief Commercial Officer Fashion Summit HK, 7 th September 2017
2 Fashion industry has a great growth potential Source: McKinsey & Company; The state of fashion
3 Exciting market dynamics Trends that shape the fashion industry Source: McKinsey & Company; The state of fashion
4 BUT is everything positive? The dark side of the industry 4
5 Example 1: the manufacturing of viscose which could be sustainable, but is often not due to its prevalent production methods Source: Changing Markets Foundation 5
6 Example 1: Dirty Fashion Report by the Changing Markets Foundation Dirty Fashion Report (changingmarkets.org/portfolio/dirtyfashion/) The campaign highlights the environmental and social impact of dirty viscose production and shines light on the global supply chains 6 Source: Changing Markets Foundation
7 Example 2: The use of hazardous chemicals Greenpeace: Corporations have also implemented these limits in their corporate responsibility programs, seeking to comply with local laws rather than apply the strictest standards Detox 2020 plan: Source: 7 System for eliminating hazardous chemicals that is proactive and precautionary PFC elimination - substituting hazardous PFCs with safer alternatives Transparency - disclosing information on suppliers and the hazardous chemicals they discharge
8 Example 3: Washing garments made from non-biodegradable synthetic fibers are an important source of microscopic fibers Plymouth University: Petroleum based synthetic fibers are not biodegradable and will persist in the eco-system even if it eventually breaks apart by abrasion, being the source of micro-plastic pollution in the oceans Greenpeace: 96% of litter found in Mediterranean Sea is plastic Threatening marine wildlife and ending up in our food supply Source: by Marine Biology and Ecology Research Centre (MBERC), School of Marine Science and Engineering, Plymouth University 8
9 this will discourage consumers from consuming and put them off certain brands and materials Pollution Chemicals - Hazards Value chain in-transparency Emissions Waste Growing water scarcity Accelerating climate change Reducing biodiversity Cotton: competing uses of land - food vs fiber Increasing income inequality Unsafe & unhealthy environment for community and employees 9
10 AND we have options We, all along the value chain, have the opportunity to avoid fashion being positioned as wasteful, frivolous consumption 10
11 Lenzing Our mission Lenzing is a performance materials company that turns CO2 and sunlight into highly functional, emotional and aesthetic products across the globe ) Lenzing brands 11
12 Sustainability is the key foundation to our corporate values Sustainability gains more and more importance in the fashion industry Lenzing welcomes the increasing interest raised by consumers and NGO s Our sustainability strategy Naturally Positive defines, where we contribute to creating more positive impacts and benefits At Lenzing we see no contradiction between higher community expectations on sustainability and our performance as a company for our shareholders. Lenzing will use its leading role in sustainability in the industry Actively engage with the fiber and fashion industries, NGOs, policy makers and experts to drive the change in the industry Drive higher standards and innovations like RefibraTM fibers for the closed loop system LenzingTM EcoVeroTM fibers for setting a new standard in the viscose industry 12
13 Lenzing EcoVero - The new standard in eco-responsible viscose! Lenzing EcoVero fibers are the innovative and unique answer to the increasing demand for sustainable products along the textile value chain MSI score, points/kg fiber Worldwide highest environmental standards in the viscose production relying on three major pillars Use of certified and controlled wood (FSC, PEFCTM) Sustainable production process proven by third parties (Higg index, EU Eco label) Innovative identification system allows everyone in the supply chain transparency in all processing steps (yarn, fabric, ready made garment) 20 Fossil resource depletion 15 Water Scarcity Eutrophication 10 Global warming 5 0 TM EcoVeroTM EcoVeroTM Lenzing Viscose Viscosegeneric generic Note: These Results were calculated using the Higg Material Sustainability Index (Higg MSI) tools provided by the Sustainable Apparel Coalition. The Higg MSI tools assess impacts of materials from cradle-to-gate for a finished material (e.g. to the point at which the materials are ready to be assembled into a product). However, this figure only shows impacts from cradle to fiber production gate. Lenzing EcoVero branded viscose fibers Higg MSI score was calculated based on Lenzing fibers which are already in the Higg MSI. Lenzing EcoVero fibers are positioned as specialty fibers in the viscose segment 13
14 RefibraTM fibers: The game changing fibers in the first collection RefibraTM fibers for the circular economy (Closed loop system) Combination of lyocell technology with pioneering use of recycled cotton off-cuts Upscaling of cotton and significant reduction of cotton scraps in the garment production New system to identify the fiber in finished garment Directly commercialized at retailers Key innovation for world leading retailer Inditex Since spring 2017 Refibra fibers are part of the Join life collection1 Huge interest of other brands, retailers and NGOs 25 leading and influencing brands are developing collections for 2018 ff. Around 30 other brands are evaluating the use of Refibra fibers 1) The collection is built on: a) Care for water, b) Care for climate, c) Care for fiber (Best material: organic cotton, recycled polyester, TENCEL branded lyocell fibers and Refibra fibers) 14
15 Raise the bar together We, as an industry, need to close the loop to actively and collectively engage on these challenges Set high standards, carve out a space for the best companies to be recognized as the leaders Show consumers that responsible fashion is possible What are you prepared to commit to? As leaders we must not be tarnished by the bad players, but rather leave them behind and show a different way forward making the fashion industry an emotional, exciting and responsible industry 15
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