Economic and population growth projections suggest a future with billions more people entering the middle class. Companies can expect consumer demand for everyday products to soar—an exciting business opportunity. But without big changes to how companies produce and sell their goods, this boom in consumption will put unprecedented and unmanageable stress on our environment and natural resources.
Imagining Tomorrow’s Markets
How can companies provide modern-day comforts and conveniences to a growing middle class without depleting the planet's resources? How can companies thrive in a world of increasing pressures and volatility? In addition to using land, water, energy and materials far more efficiently, companies must explore new business models that profitably meet people’s needs without constantly producing new inventory from virgin raw materials.
Business leaders of the future will need to serve more customers with a fraction of the natural resources that they use today. This will be their moonshot, and WRI intends to support this transformation with rigorous research and expert thought leadership.
Through Tomorrow’s Markets, WRI’s corporate sustainability experts examine the threats of growing consumption and the innovative business models that work in a resource-stressed world. The vision of the project is to help the private sector develop and scale new business models. This work complements but is separate from efforts to make industrial activity more efficient. In March 2017, WRI published a landmark working paper, The Elephant in the Boardroom: Why Unchecked Consumption is Not an Option in Tomorrow’s Markets. This paper provides scientific evidence that improved resource efficiency will not be enough to achieve sustainable economic development without business model innovation. It examines three types of products—food, clothing and cars—and describes what sustainable business models might look like for each. WRI is now taking a closer look at the apparel industry, which is known for its staggering environmental impacts, through a project called Clothing Reuse Market Makers (described below).
Changing core business models so that they do not rely on increased natural resource consumption has been called the “Mount Everest” of sustainable business. We encourage companies to start the ascent now.
Clothing Reuse Market Makers
Consumers want—and can increasingly afford—new options after wearing clothes only a few times. Many companies have responded to market demand and competition by furthering “fast fashion” trends. They have created external conditions (via advertising and policy advocacy, for example) to help sell more new clothes, to more people, more often.
But selling more and more new clothes in high-consuming and fast-growing economies is untenable. It will mean even greater pressure on the environment (climate change, water stress, and pollution) and labor markets (gender injustices and dangerous working conditions)—both of which are already over-exploited.
Today, no major global brand is reaping significant revenues from resold, rented, or repaired clothing. Few companies have ambitions to scale reuse business models or create the external enabling conditions to do so. There are no common reference points for companies to use in designing such business models for environmental and social benefits.
Our Vision for Sustainable Fashion
By 2020, making clothing go further will be a core strategy for meeting demand in priority markets, with other markets following close behind. Designing business models for maximum environmental and social benefits will gradually become mainstream business practice, aided by the adoption of new public policies that encourage clothing reuse. Systemic change will be achieved when clothing reuse becomes a competitive and profitable business model for a critical mass of influential clothing brands.
Companies express interest in reuse business models, but they are missing critical information and external market enablers. Through the Market Makers initiative, WRI, WRI India, and WRAP will produce best-in-class research and convene a working group of at least 20 companies to address three missing elements of a reuse market:
Evidence of consumer demand. Senior executives will not break from traditional, linear business models until they have confidence that specific customer segments will embrace reuse models in multiple markets. Market Makers will examine potential market demand for rental, resale, and repair business models.
Common definitions and ambitions. As companies need credible metrics for measuring the environmental and social impacts of various business models. Market Makers will publish guidance for how companies can confidently pursue this analysis.
Enabling policies. Early adopters can advocate that governments incentivize investment in clothing reuse models through enabling policies. Market Makers will identify common policy barriers and promising solutions, and work with trade groups to advocate for change.
Market Makers will target companies that can pilot reuse business models in three priority geographies: India, the United Kingdom, and the United States. Lessons will be shared among participating companies, with emphasis on solutions that can transverse geographic markets.