The Time Is Now For Diversity In Fashion

It is remarkable how little we know about the items we buy and use in our everyday lives. Providing product transparency as part of the sacred covenant between brands and shoppers is a relatively new convention. And while clarity into the facts surrounding a purchase has improved, it has been slow going with much to accomplish still.

For example, it wasn´t until the 1990s that food companies in the US were required to provide standardized nutritional information on the external packaging of their products – and this only came after years of consumer clamoring for a basic level of insight about the things we put into our bodies.

So when it comes to knowing the details of the clothing we put on our bodies, we are unsurprisingly still very much in the dark. US law requires brands to provide rudimentary product information, such as fiber content and country of origin. Of course, this labeling tells us nothing about how our clothing was made or the impact these items have on the world around us.

However, with the advent of the global sustainability movement, consumer consciousness about the environmental toll of the fashion industry has taken on new meaning and momentum. As such, in recent years, shoppers have started demanding more insight into the garments that make up this $2.5 trillion annual global business.

Progress has been made. Nearly a decade ago, Everlane launched with the promise of providing radical transparency into its process and product. Although issues surrounding the company’s culture have been questioned in recent months, its promise helped move the industry towards more transparency. Other fashion businesses followed suit, offering increased clarity regarding the conditions of their factories and the environmental impact of their fabrics. Fast forward to today where a variety of brands – including titans like Ralph Lauren – offer QR codes or similar tracking numbers to allow customers to learn the history behind individual garments. Blockchain-based software – such as Provenance, Monochain and Truepic – facilitate supply chain transparency and verification, while the app “Good On You” ranks fashion companies based upon their eco-friendliness, labor practices and treatment of animals. Various industry certifications are now available to verify ethical business practices and the environmental impact of fabrics. While the road ahead is long, fashion has taken its first big steps towards embracing transparency and sustainability.MORE FOR YOUStartup Founded By Cognitive Scientist Gary Marcus And Roboticist Rodney Brooks Raises $15 Million To Make Building Smarter Robots EasierAn Old Dog’s New Trick: How A 70-Year-Old Entrepreneur Reinvented The Invisible FenceHow Fashion Manufacturing Will Change After The Coronavirus

However, one aspect of this evolution of consciousness has remained woefully neglected: fashion’s relationship with diversity, equity and inclusion (DEI). After all, a truly sustainable industry is one made up of different people of varied backgrounds where there is transparency into that representation all along the value chain and up and down the org chart.

Since this past spring – with the growing momentum of the Black Lives Matter movement – many industries have faced increased pressure from consumers to step up their practices and provide clear insight into their policies regarding DEI. Fashion has been one of the businesses with a big target on its back. In the wake of the protests following the death of George Floyd, fashion lovers have called out the industry for failing to fight racism and embrace representation.

As a result, in recent months, the fashion industry has ramped up its efforts to rethink its approach to DEI. Perhaps Anna Wintour – editor-in-chief of Vogue, artistic director of Condé Nast and a cornerstone of the industry for decades – best personified this industry reckoning in her statement on the topic recently reported by the New York Times, “Undoubtedly, I have made mistakes along the way, and if any mistakes were made under my watch, they are mine to own and remedy and I am committed to doing the work.”  

And progress has been made here as well. This year’s September issues published by fashion magazines featured diverse talent more prominently than ever before. Industry organizations to increase DEI have been formed and major fashion houses and retailers have pledged their support. Large fashion companies have committed to promoting diversity and inclusion like never before, including hiring consultants to help get them there.

So the question is now: what comes next? Will the fashion industry maintain this momentum towards DEI? Have recent events produced lasting change within the industry? If yes, how will this paradigm shift be maintained? And who will monitor it and hold the industry accountable?

The Case For Diversity

Intuitively many of us know that diversity matters. Fostering a diverse and inclusive environment is part of our responsibility as good people, citizens and leaders.

But many of us do not realize that diversity is also good business. According to McKinsey & Company’s 2018 study Delivering through Diversity, there exists a clear correlation between DEI and performance: companies with the most ethically and culturally varied executive teams are 33% more likely to outperform homogeneous competitors with regard to profitability. McKinsey attributed this relationship between diversity and performance to factors such as improved access to talent, enhanced decision making, depth of consumer insight and strengthened employee engagement.

Frans Johansson, author of The Medici Effect and a consultant to multinationals such as Nike, Under Armour, Disney, ESPN and Google on DEI, agrees: “The increased performance enhancement diversity lends to a company is the most sustainable long-term factor likely to encourage companies to increase representation.”

But for those companies where morality or profitability alone might not be reasons compelling enough to embrace DEI, there is an additional incentive for them to consider it important: consumer demand.

“In my 15 year career of advising companies on diversity, my only two clients in the fashion space were Nike and Under Armour. That changed this past summer when multiple major fashion companies knocked on my door, scrambling to make the changes being demanded by their consumers,” recalls Johansson, who believes this time around, things are different: “Consumer pressure isn’t going away. People are looking at ninety day and six month markers [of progress]. Condé Nast was hit in June. And the company will be held accountable again soon if it doesn’t address the underlying issues.”

What Needs To Change?

Whether driven by ramped-up consumer pressure, enhanced business performance or simply doing the right thing, what are the key issues related to DEI that companies need to address? And how can these problems be solved?

According to Johansson, one common pitfall for companies is how well diversity is imbued within its leadership: “A company’s senior management enacts policies to create awareness and change within its corporate culture,” states Johansson. “So diversity has to be embraced at the top for it to be embraced throughout the rank and file.”

·     Internal Action: Leadership, Decision Making & Education

Complicating this issue is the fact that power within the fashion industry still largely rests in the hands of white male executives and board members – a reality some have set out to change.

Guy Primus, CEO of Valence, a community of approximately 12,000 black professionals, is a co-founder of the The Board Challenge, an organization that has sought commitments from US corporate boards of directors to add at least one black director within the next year. 

Primus emphasizes that true decision-making authority at companies is often relegated to a few “C level” executives, including the salient “creative genius” role of Head Designer or Creative Director. Explains Primus: “There are certain positions that always hold power, such as the CEO and CFO, and maybe the COO, CMO and Creative Director. However, beyond those roles, it is easy to give an executive a title that sounds senior and empowered but – in reality – doesn’t hold any real authority.”

Hence Primus’ focus on increasing DEI within companies’ boards of directors: “[The board] is the one place power doesn’t hide or pretend. It tells an observer almost everything that is needed to be known about the company.” The Board Challenge’s goal of increasing representation on boards, Primus notes, is driven by the how bad the situation is today. “187 of Fortune 500 companies do not have a black board member,” states Primus, “and if you look at the Russell 3000 – which represents 98% of US incorporated equity securities – only 4% of these companies’ board members are black.”

Johansson agrees with the importance of having diverse board members and senior executives but urges his clients to take it a step further: to improve DEI at the employee “team level.” “Work within most companies gets done at a team level,” offers Johansson. “The more diverse the team, the better the results. We believe companies achieve more innovation and better performance with inclusive teams that tap into the perspectives of all of its members to determine priorities. Diverse employee teams ensure that diversity and inclusion are sewn into the very fabric of the company.”

In addition to adding DEI into leadership positions and employee teams, companies can improve DEI through additional actions, including requiring unconscious bias training among employees, fostering communication and feedback among employees (without the fear of retaliation) and mandating diversity among the key people representing the company externally.

·     External Footprint: Contractors, Suppliers and Vendors

In addition to improving DEI internally, it is important for fashion companies to focus on how they embrace it outside of the office walls, including with regard to the companies they choose as their contractors, suppliers, vendors and partners – and how these entities size up with (or against) diversity.

For example, the processes fashion manufacturers apply in making their goods often have disproportionate impact on the communities around them. People of color are more likely to be impacted by poor labor practices and any negative environmental effects related to fabric mills and clothing manufacturers. This is a critical issue for the industry to address from both a sustainability and diversity standpoint.

Moreover, major fashion magazines and brands assert significant cultural influence when choosing the models they feature in their publications and campaigns. It is incumbent upon these companies to support diversity through their selection of models as well as the talent they showcase.

Finally, fashion retailers – through their merchandising selection and marketing support – can significantly influence which fashion brands are likely to be successful. It is important that these  companies support brands owned by people of color so that diversity within ownership and product is helped to flourish.

A propos of supporting black owned businesses, Aurora James, founder and creative director of the accessories label Brother Vellies, created the “15 Percent Pledge” to improve the diversity practices of major fashion and beauty retailers vis-à-vis their merchandise selection. “Black people represent approximately 15% of the population of America so major retailers should be hitting 15% products from black-owned businesses on their shelves,” notes James. “When I started The Pledge, I knew the problem was big. I expected that around 7 to 8% of products were represented by black-owned businesses. The reality is that less than 1% of products stocked by most major retailers are from black-owned businesses.” Since Aurora launched the non-profit in June, a number of high profile companies have taken The Pledge, including Vogue US, Sephora, Rent The Runway, West Elm, and Yelp.

Maintaining Change: Measurement, Transparency, Accountability

·     Corporate Action

Equally as important for a company to ask, “what needs to change and how?” is “how do we measure change and make it stick?” 

The answer lies with data: companies that want to improve DEI need to apply quantitative tools to track the baseline they are starting from and the target they are moving towards.

Key DEI metrics to monitor include the proportion of minorities in key leadership positions, minority representation on the board of directors and the proportion of partners – i.e. contractors, suppliers and vendors — owned by minorities.

A company’s performance against these metrics needs to be owned by leadership and measured on a regular basis where real implications exist for any failure to achieve DEI goals, i.e. bonuses are at least partially tied to DEI goal compliance.

Moreover, transparency is critical: companies should consider providing to its workforce and the public visibility into their key DEI objectives and progress towards meeting them, since this kind of insight is becoming increasingly important to employees and consumers alike.

Finally, while tabulating and measuring diversity goals is critical, it is important for companies to realize that quantitative metrics alone do not tell the full story. DEI needs to embraced by companies it in myriad qualitative ways – from the breadth of music that is playing in the lobby to the selection of food being served in the cafeteria. Numbers are important but they are only guard rails against inaction; DEI needs to be built into the foundation of the organization, from the top down and the bottom up.

·     Independent Organizations

Fashion industry “watch dog” organizations are likely to play an increasingly important role in supporting diversity goals and providing accountability.

One such organization is the Black in Fashion Coalition (BIFC), formed in June by Lindsay Peoples Wagner and Sandrine Charles, two industry veterans, to advance black fashion.

BIFC works with approximately 100 fashion brands to advise them on improving their DEI performance. By June 2021, BIFC will provide an annual index gauging black employee representation and other DEI metrics among fashion companies Although the 2021 results will be published on a cumulative basis across brands, companies participating in the index will be required to publish their individual numbers by 2022.

Similarly, the 15 Percent Pledge provides DEI resources and support to participating retailers. However, James notes that The Pledge will only work with companies that demonstrate a genuine commitment to achieve the 15% benchmark. “We will do quarterly check-ins with companies and provide them with resources,” explains James. “It is important to match the retailers with brands where there will be a good fit for both parties to ensure mutual success.” Companies that take The Pledge receive a seal for their participation. Accountability is monitored; companies that continually underperform will have their seal revoked.

Like the others, The Board Challenge’s co-founders believe in the power of follow-up and follow through: Primus and team check in with their Founding Pledge Partners during the first six months and again at twelve months to evaluate their progress with adding a black director to the board.

The efforts of these organizations are primarily focused on larger companies where the impact of change can be the most pronounced and far-reaching. However, it is important for smaller and earlier stage companies to get ahead of DEI and build cultures based upon diversity and inclusiveness as they plan for growth.

·     Consumers: Guardians of Diversity

In the end, it will be up to consumers – and their collective purchasing power – to approve or disapprove of a fashion company’s policy towards DEI. The events of the past few months indicate a growing enthusiasm among consumers for diversity within the fashion space. To what extent this consumer appetite for change sustains remains to be seen.

But one thing is clear: to date, consumers have largely lacked access to the transparency required to judge fashion companies fairly of their policies towards DEI.

As such, herein lies an opportunity for fashion companies to stand out by increasing visibility about the policies and actions they are taking to support diversity. Similarly, there exists the opportunity for new businesses to be formed that specifically assess and track fashion brands on DEI and provide verification tools supporting diversity initiatives.

A Defining Moment For The Industry

This is a watershed moment for fashion. With the momentum of change over recent months, the industry has the opportunity – and need — to embrace diversity like never before.

Peoples Wagner summarizes the importance of seizing upon this moment to enact systematic change: “One of the biggest things we’ve said to companies is, ‘this is not a moment for a “check the box” effort.’ Diversity is a movement. It’s something you have to commit to in every single way for years to come. Consumers are taking notice of brands that simply posted the black square or a quote but then haven’t done anything else. The changes we are working on with companies are systematic — not just surface level [quick fixes].”

For fashion companies, diversity can no longer be a side project or a “nice to have” line on the masthead or balance sheet. It needs to be core and central to every business decision.

To be clear, improving DEI in fashion will not be easy; it will take time, money and the support of many. However, those companies that hunker down and commit to effecting long lasting change will reap significant rewards. They will win the hearts of consumers and employees alike. They will produce better products and higher profits. And, perhaps most important, they will be doing the right thing for their business and the world.

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