**London**: A report by Fashion for Good and BCG outlines the importance of next-generation materials in reducing the fashion industry’s environmental impact, predicting a shift in market dynamics by 2030. Key levers identified include demand stability, cost engineering, and strategic capital investment.
A recent report from Fashion for Good in collaboration with the Boston Consulting Group (BCG) has highlighted the critical role that next-generation materials will play in the future of the fashion industry. Titled “Scaling Next-Gen Materials in Fashion: An Executive Guide”, the report outlines the significant environmental impact of materials used in fashion, noting that they account for 92% of the industry’s total emissions during extraction, processing, and production, as well as approximately 30% of the cost of goods sold (COGS).
The report indicates that by 2030, next-generation materials could capture 8% of the total fibre market, equating to around 13 million tons. This is a notable increase from the current market share, which stands at just 1%. However, the anticipated growth might not meet the escalating demand stemming from regulatory pressures, climate-related disruptions in the supply chain, and shifting consumer preferences.
Katrin Ley, managing director at Fashion for Good, stated, “The fashion industry stands at a critical juncture where next-generation materials are no longer just an opportunity but a business imperative. The opportunity is there, but requires individual and collective action across demand, cost, and capital levers to bend the adoption curve.” This underscores the urgency for brands to adapt and adopt these materials to sustain their competitive advantage.
The report identifies three primary levers essential for scaling next-gen materials and facilitating a smoother transition:
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Demand: Establishing consistent demand signals is crucial to stabilising markets. The report suggests that demand pooling and transition financing could help overcome barriers to adoption.
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Cost: The report emphasises the importance of cost engineering and process optimisation across the supply chain to unlock economies of scale, which would facilitate both affordability and greater adoption rates for new materials.
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Capital: Strategic financing aligned with each phase of the adoption curve is necessary to assure sustained growth and the potential for scaling.
To successfully implement these strategies, brands are encouraged to integrate next-gen materials into their core business plans, aligning them with financial objectives to secure resources and ensure accountability. This approach requires a thorough understanding of the existing material mix, supply chain dynamics, and the external ecosystem to effectively reduce risks and seize opportunities that contribute to long-term resilience.
Sebastian Boger, global leader of BCG’s Fashion & Luxury sector, remarked, “Scaling next-generation materials isn’t just about sustainability—it’s about staying relevant in a changing market. But these materials won’t scale on their own—industry-wide action is key.”
Similarly, Catharina Martinez-Pardo, a managing director and partner at BCG, stated, “The transition to next-generation materials is both a challenge and an opportunity for the fashion industry. Brands that act now to embed these materials into their core strategy will win the next era of fashion.”
As the fashion industry navigates these impending changes, the strategic insights provided in the report appear to offer a roadmap for leaders looking to innovate while addressing significant environmental concerns.
Source: Noah Wire Services
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