IMF First Deputy Managing Director Geoffrey Okamoto Remarks to IDB Miami-LAC Conference “Building a Better Digital Economy” – The rise of Canada’s omnishopper – Climate Justice now

Again we have chosen three different features for today’s TextileFuture Newsletter to delight you.

The first item is a speech by First Deputy Managing Director Geoffrey Okamoto on “Building a Better Digital Economy”.

The second feature is about “The rise of Canada’s omnishopper”, based upon a publication by nielsen IQ.

The first two items are relatively short , but showing some interesting facts.

The third feature “Climate Justice now” is based upon a publication by Positive Luxury and revealing many interesting facts and figures.

Enjoy the excellent readings.

Here starts the first item:

IMF First Deputy Managing Director Geoffrey Okamoto Remarks to IDB Miami-LAC Conference “Building a Better Digital Economy”

IMF First Deputy Managing Director Geoffrey Okamoto

I want to thank the IDB for inviting me to be here with all of you this week. As a technologist, who then went into finance, and now is in public service, I think the need for discussing these issues has never been greater, and there’s no better context to have it in than with respect to Latin America and to be here in Miami.

This is one of the first conferences I’ve been to since the onset of the COVID-19 pandemic and it’s impossible to have lived through the past year and not come out with a different perspective. One thing for certain is that our reliance on technology lessened the impact on the pandemic. You could order meals, sign mortgage loan agreements, and hold a virtual quinceanera thanks not only to technological innovation, but the accompanying societal adoption. This trend, by all indications, is going to continue at light-speed. We all need to be ready.

All countries should do everything they can to use this technological super cycle for a much-needed growth tailwind that raises living standards and addresses longstanding challenges. It is important for me to be here, in Miami, and to speak with leaders like you is because building a better digital economy is particularly important for Latin America and the Caribbean. Our research at the IMF indicates that this region has lagged others in ensuring that all people can share in the prosperity that a digital transition brings.

This digital divide exists because many do not have access to digital technology, or if they do, they lack the skills to use it productively. This digital divide is already giving way to an economic divide, and if further left unaddressed, a social divide isn’t out of the question. That’s something this region cannot afford. The people of Latin America and the Caribbean deserve every opportunity to pursue prosperity — prosperity that is now inextricably linked to continued technological innovation and commercialization.

There are proper roles for the government and for the private sector. Both will need to collaborate to maximize the growth opportunities that present themselves. If done well, governments will be able to deliver prosperity to citizens after a year in which IMF data shows standards of living in most countries declined, and the private sector will be able to offer transformational products, in new markets, to more customers, with higher incomes. It truly can be win-win.

We know how this can work, because it works in other places. I come from California, a then-frontier that people flocked to in the 1800s in search of gold, leaving behind their more comfortable and established lives on the East Coast. I’m convinced that spirit, somehow and someway, persisted in the California ether and gave rise to the Silicon Valley that has powered California’s economy. But all people, by our nature, want to push the boundaries of what’s possible to improve our lives and secure a better future for the next generation. That same spirit has ignited tech hubs all over the world, where disrupters and the investors that believe in them are injecting dynamism and growth into their economies.

To make this work in Latin America, we need to focus on some key issues.

First, there needs to be sufficient investment in basic digital infrastructure. Governments and private firms both need to play a role, but governments should focus on investments that may be inaccessible or unprofitable for private providers. Some of this is physical infrastructure — after all, it’s impossible to participate in the digital economy if you’re not connected — but a lot of it is also digital identity infrastructure and critical data on SMEs that private firms can use to construct a better ecosystem for startups. It is reassuring that we have a strong partner in IDB that understands this and can help build out digital infrastructure of various types throughout the region. In some areas of work, where it’s possible to coordinate this across countries as well, the region will see even greater benefits.

Second, governments need to reconsider their regulatory frameworks and make sure ey are conducive to private sector investment and innovation. Regulation that is too tight favors companies that are large enough to afford expensive and complex compliance. Right-sizing regulation with an eye toward facilitating the entry of smaller firms may be opposed by established players, but a more dynamic economy is in everyone’s interest, attracting investment and creating better-paying jobs. We can start today. In the case of FinTech, for example, mechanisms like guidance units set up within regulators and so-called “sandboxes” can be used as a stop-gap measure to encourage innovation while more thorough reviews are undertaken.

Third, new firms need access to the right people. Developing human capital is key. Governments need to invest properly in education, particularly in STEM fields, while the private sector needs to assist by investing in training employees for that “last-mile” on technical skills specific to their business. The two go hand in hand, and this is an example where coordination makes all the difference.

Fourth, the financial sector needs to be capitalized and regulated with an eye toward maintaining stability while also channelling capital to new market entrants. The safest entity to lend to may be a government, a state-owned enterprise, or a conglomerate with outsized market power, but a financial sector that is overly incentivized to allocate capital to these entities is effectively starving more dynamic parts of the private sector of the resources they need to grow. In the long-term the goal is to have a mix of banks, capital markets, and even FinTechs themselves allocating capital to new firms, each able to finance at different scales, on different terms, and assume different risks. Governments that maintain capital account openness can avail themselves of foreign investment, much of which is engaged in a global search of good investment opportunities at a time when yields are low in many Advanced Economies.

Fifth, investors and firms need access to a sound and stable legal framework with a judicial system that understands property rights, including the importance of intellectual property rights. Startup investing is almost by definition one of the highest-risk investments you can make, and it’s difficult to attract it at sufficient scale if the private sector isn’t clear on what their rights are or if they will be able to enforce their rights when needed.

Many countries in Latin America and the Caribbean need to make substantial improvements in one or more of these areas to fully unlock a digital economy that powers growth and is inclusive of people that, to date, are falling further behind. And so, I am encouraged that the IDB’s new blueprint “Vision 2025” has outlined a strategy to address these areas in concrete ways.

It’s also worth noting that there are emerging challenges that need to be addressed. Safe, trusted, and reliable digital ecosystems lie at the heart of adoption and usage of new digital products and services. Cyber threats increase exponentially as consumers connect through their mobile devices to a host of communication networks such as public Wi-Fi. It becomes important then to ensure that the entire digital ecosystem is designed with cyber security in mind. The development of global standards in this domain must keep pace with the changes, especially as we move into a quantum processing world with super computers. Of course, with such computing power and advanced analytics, we need to equally be aware of biases that may be built into algorithms that may impact the digital divide.

At the International Monetary Fund, we want to do all we can to support countries during this transition. It starts with deploying our expansive analytical expertise to help countries understand the amount of growth that they could be leaving on the table without acting now, as many of the elements that I highlighted can understandably be politically difficult to execute. In the FinTech space, the IMF along with the World Bank proposed the Bali FinTech Agenda, which reinforces competition and commitment to open, free, and contestable markets. We are preparing to deepen our work on digital money and the implications this has for the international monetary system that we have been responsible for since our creation. Crypto currencies, stable coins, and central bank digital currencies have sweeping implications for monetary policy, capital flows, and the role of the financial sector.

Building a better digital economy is therefore a collective effort amongst a wide set of stakeholders and it’s great to have the IDB convening all of us here to put some energy into the conversation. We need to take action now and Latin America can show others how to successfully accelerate development of the digital economy. We need greater enhanced focus to ensure that the digital revolution benefits the many and not just the few.

Thank you very much for your time this afternoon. I’m very optimistic on the prospects for the region and you can count on me, my colleagues at the IMF, and of course the IDB, to do all we can to help this region realize the full growth potential that digital innovation brings.

The speech took place on June 24, 2021 at The Light Box at Wynwood — Miami, Florida (USA)

Here starts the second feature:

The rise of Canada’s omnishopper

On average, Canadian omnichannel shoppers made 27 % more retail trips than consumers who exclusively shopped in-store, translating to 23 % more spend in 2020. With billions of dollars being invested into e-commerce infrastructure, building the next wave of omnishoppers will be crucial for success.

As vaccination levels climb and the weather warms up, more and more people are tentatively emerging from hibernations and mandatory quarantines to dip their toes back into pre-pandemic activities. But some behaviors have permanently changed, like how some people buy groceries. 

E-commerce sales rates for FMCG products in Canada have held at a 79% growth rate compared with the prior 52 weeks, according to NielsenIQ Homescan. This is slightly lower than the triple-digit growth rates during peak pandemic shopping periods, but a remarkable rate as we lap those periods that have moved into the “prior year” period. So is it safe to say that online shopping is here to stay? For at least a portion of the population, the answer is yes. Omnishoppers are people who buy their FMCG products both online and offline, and they are a lucrative group to obtain.

The rise of Canada’s omnishopper is the key to growth

Penetration of online shopping increased to 44 % of Canadian households over the 52 weeks ending April 3, 2021. These omnishoppers have increasingly adapted their buying routines to embrace the convenience and ease of e-commerce, as evidenced by a consistent increase in online purchases. Nationally, e-commerce accounts for 3 % of all Canadian FMCG purchases, but that share nearly doubles when isolating just the omnishopper group. And their contributions to overall store sales demonstrate the value of winning this group’s share of wallet.

On average, omnishoppers make 27 % more retail trips than individuals who exclusively shop in-store, and that translates to 23 % more spend annually. “Affluence level and household size are two current indicators of today’s omnishopper,” explains Carman Allison, Vice President of Consumer Intelligence at NielsenIQ. “And those groups tend to spend more regardless of channel. However, it’s important to note that two of the fastest-growing groups of omnishoppers were households without kids and Boomers. So there’s interest across demographics.”

The consistency of purchase intervals and lower concerns over variance in quality fueled non-edible products such as pet food or disposable diapers to blaze the e-commerce trail. But shoppers are increasingly fulfilling grocery orders online as well, which offers an incredible opportunity for merchants to gain new shoppers and drive retention. Three-quarters of all FMCG sales are food items, so broadening the basket to include more edible items could accelerate e-commerce’s growth rates.

Here starts the third item:

Climate Justice now by Positive Luxury

All captions and graphic courtesy by Positive Luxury

“When we say: ‘I can’t breathe’ — whether it is an officer with a knee on our neck or the pollution which continues to take away our breath, that’s why we march and that’s why we work so hard to change these dynamics.” Mustafa Santiago Ali, vice president of environmental justice at the National Wildlife Federation.

At the end of April, the Financial Times editorial board published a united statement on the perils of climate inaction.

“No generation should face a future blighted by a chaotic climate and environmental devastation, yet today’s young people do,” the statement read. “Their parents were the beneficiaries of the

Great Acceleration – a post-war explosion in human activity with few recent precedents. In the past 50 years, prosperity for millions has risen and the population has doubled. Natural resource extraction has tripled, helping to fuel an almost fivefold increase in the global economy.

“Young people have been left to pick up the environmental bill. They live in a world of poisoned rivers, dirty air, razed forests and acidifying oceans polluted by plastic. Today’s changes in climate systems have occurred because Earth has warmed by an average of just over 1C since 1880. To stop that figure rising above 1.5C, which would bring more climate disruption, scientists say emissions should fall by about 45 per cent by 2030 from 2010 levels and reach net zero by around 2050.”

“Young people deserve a new deal for the environment, delivered at a pace never attempted before. If that seems unimaginable, so does their future without it.”

And yet, as unprecedented as this statement was, it didn’t go far enough. Extreme heat and storms, sea level rises, intense wildfires

– climate change may threaten everyone, but indigenous communities, communities of colour, women and those struggling with grinding poverty are the most vulnerable. While many businesses are setting ambitious climate targets in line with the Paris Agreement, this isn’t enough to protect those most affected by the climate crisis.

As a new generation of activist consumers, shocked into a one- world vision of the planet by the global nature of the Covid pandemic and inspired by protests bursting out in support of marginalised groups across every continent, turn their attention to this year’s COP 26 climate change summit in Glasgow in November, fighting climate change is no longer enough unless the planet it saves is enjoyed by everyone.

Out of the fire of 2020 a new campaign is uniting activists, consumers, political leaders, smart business leaders and some of the financial sector’s largest investors – the need for climate justice.

Business leaders often get trapped in the notion that climate action is only about decarbonisation – but when companies fail to take into account the impact of their decisions on people, they blunt the impact of those efforts and, at worst, do harm. Climate and justice are fully interdependent, says BBMG founding partner Raphael Bemporad.

“The next generation is calling out business as usual, and they want brands to lead the way to a radically better future,” he warns.

“Today’s intersecting crises are not merely temporary trends that can be waited away. These are fundamental challenges to a broken status quo that all of us have to reckon with. We are being called to lead in an era of shifting paradigms, not just shifting preferences.”

“Racial injustice and climate injustice are both rooted in the evil notion that some lives are more important than others.” Rt Hon David Lammy, MP for Tottenham.

What does climate justice mean?

The concept of climate justice is fairly simple to understand, according to Mary Robinson, adjunct professor of climate justice at Trinity College Dublin, former UN High Commissioner for Human Rights, and former President of Ireland: “those who bear the least responsibility for climate change are the ones who will suffer the most.”

Climate justice is not a new concept. The UN Human Rights Council has been vocal on the threat climate change poses to human rights. And yet the discussion around climate change rarely recognises that existing inequities – due to factors including gender, race and income – increase the severity of the risks people face and limit their access to the opportunities of a transition to a green economy. Climate justice recognises these inequities and puts people at the heart of climate strategies.

Studies show that the combined emissions of the richest 1 % of the global population account for more than the poorest 50 %, but the global south will bear the brunt of the economic impact from rising temperatures – with those on lower incomes more vulnerable to floods, drought and extreme heat.

When world leaders joined President Biden’s climate summit in April 2021, they were addressed by 19-year-old climate activist, Xiye Bastida, a Mexican-born teenager from the new generation of climate activists drawing attention to environmental and social injustices worldwide.

“Solutions must be aligned with the fact that climate justice is social justice,” Bastida told the summit, echoing the words of Greta Thunberg.

And whilst Environmental, Social and Corporate Governance issues have been increasingly important to investors, brands and the company C-suite, it’s taken the dramatic effects of a global pandemic and the protests over racial justice and police violence last year for the S in ESG to finally grab an equal share of investors’ attention.

“ESG was firmly put on the decision-making table in 2020 after being a strategy that was ‘nice to have,’” according to Felix Boudreault, managing partner at Sustainable Market Strategies, an ESG research firm in Montreal. “It’s now a performance issue that senior executives must address, whether they believe in it or not.”

The world in uproar – change is in the air

Sustainability has been joined – or even usurped – by social justice. Younger people expect their brands to lead social change. Millennials and Generation Z have long seen ethics and values as a key part of brand and purchase decisions. If brands want to stay relevant to this fast growing generation – Gen Z will soon make up 30% of the US workforce – they need to engage, and quickly. While 59% of Americans aged 16 to 34 (Gen Z and young millennials) expect companies to make a supportive statement on social media, 58% also want these companies to bolster their statements with donations, and 51% think brands should amplify the voices of black leaders.

Unlike the protests and activism of the 1960s – which led to the ground-breaking Civil Rights legislation of that era – today’s movement is occurring in the midst of a fundamental demographic transformation. Diversity is not just their future – it is the future shape of the world’s population.

And these attitudes extend across social class. Wealthy young investors share the values of poor communities when it comes to social issues: 45 % of 18 to 34-year-old HNWIs list diversity as a leading issue for companies to consider – more than double the response of the wider investor base (22 %). Younger investors were more attentive to the actions of companies in response to the COVID-19 pandemic (64 %) and the disproportional financial and social adversity of COVID-19 on specific groups (62 %) than their older counterparts.

As the world continues to grapple with the confluence of a pandemic, racial tensions, a worsening climate emergency, and other profound and unprecedented global crises, Gen Z is calling for the business world to provide transformative leadership, co-created solutions and radical change. According to a 2020 study by GlobeScan and BBMG, six in 10 respondents under the age of 30 say the priority should be restructuring society to deal with inequality and climate change, rather than just getting our economy back to normal.

According to research by Porter Novelli, 81% believe that brands are an essential part of the solution and 93% agree that the more socially and environmentally responsible companies are, the more motivated and loyal Gen Zers will be. According to WeSpire’s survey of Gen Z and the future of work, this generation are more driven than millennials in demanding meaningful work and entrepreneurialism. They don’t just value diversity, they are diverse, with 45% of US Gen Z workers not Caucasian. 60% will support brands that take a stand on issues regarding human rights, race and sexual orientation and believe racial equality then environment are the most important issues of the day.

There are four distinct types of brands that appeal to Gen Z’s and prospective employees:

a.           The Activist: Examples: Dior, Nike, HoMie

b.           The Educator: Examples: Stella McCartney, Pernod Ricard, BodyForm

c.            The Social Business: Examples: The Real Real, Tommy Hilfiger

d.           The Operator: Examples: IHG, Estee Lauder Companies

The secondary market for luxury goods has always existed, but now it’s one of the fastest-growing areas of luxury, increasing by around 12% every year since 2018, according to the BCG- Altagamma True-Luxury Global Consumer Insight study. The primary luxury market grew more slowly over the same period. If younger consumers don’t believe a brand is making a difference, they won’t stop wearing it. They’ll just buy it second hand, repurpose it and the company won’t see a penny.

“Until one or two years ago the focus was on recycling not slowing the cycle of production – which is what really makes the difference,” explains Katrin Meyer, co-ordinator of German right to repair organisation Runder Tisch Reparatur. “The biggest problem in any item is the production phase. We need to support local craftspeople sector so that in 10 years’ time we still have people who can fix things or sew clothes. Fixing up, changing or customising second-hand items from smartphones to clothes to furniture to accessories is the future.”

The older luxury consumer, according to Bain, also care about sustainability, purpose and impact. Many have already demonstrated their commitment through philanthropy. In 2020, when asked about their top hobbies and interests by luxury research specialists Wealth-X, philanthropy was the most popular response from UHNWs and billionaires.

“We saw more philanthropists saying: ‘without taking risks we’re not going to have the change that we need and not at the scale that we need it’,” says Nick Tedesco, president and CEO of the National Center for Family Philanthropy in Washington DC. “What we see is people mobilizing and putting philanthropic capital to work because they don’t necessarily trust that the government is going to address the social issues, or address them with the same urgency or the same innovation.”

Boomers are less involved in calls for social justice – 77% in the US supported white police officers over Black Lives Matter protestors – but they are a minority. As of 2020, there were 82 million millennials and 86 million members of Gen Z in the United States, compared with 69 million baby boomers. The people who care are the future.

Silence is not an option – Fashion and luxury are born from rebellion

The fashion and luxury industry straddles two worlds – whilst it serves high-end, financially comfortable clientele, it relies almost exclusively on the rebels, the outsiders and movements for change to create its future.

Coco Chanel’s little black dress was designed by an abandoned orphan who destroyed the restrictions of the corset by borrowing from the uniform of the shop girl. La pauvreté de luxe, she called it, or “luxurious poverty”.

The boutique hotel starts with Blakes in London’s Chelsea, designed by Kiwi-born backpacker and Portobello Road stall holder turned bohemian actress Anoushka Hempel.

Vivienne Westwood started her career dressing the Sex Pistols.

Alexander McQueen was the son of an East End taxi driver, and whose early shows earned him the nickname “he hooligan of fashion”.

Louis Vuitton was the orphaned son of a carpenter who fled his abusive stepmother. If the industry ignores the winds of change, it misses out on vibrant street style, on new moods and essential moments.

Today the world faces social change at least as profound as the upheavals of the late 1960s – which, Jane Mulvagh writes in Icons of Fashion, “were crucial years in which the allure and originality of street style challenged, and finally broke, the hegemony of high fashion”.

At the height of the pandemic, young people took to the streets to protest the abuse of state power against people of colour.

Movements like Extinction Rebellion and Black Lives Matter form a critical intersection of ideas about social and political change.

As Patrisse Cullors and Nyeusi Nguvu, leaders of the Black Lives Matter movement, have said: “Racism is endemic to global inequality. This means that those most affected – and killed – by climate change are Black and poor people.”

Today’s outsiders and their demands for change carry the same passion as the punk bands who offended fusty British society or the hippies who fought against the Vietnam war. This is generational change – people united with specific demands for government and business.

These demands are simple and undeniable based on the simple premise that the world should be fair for all. To ignore their voices is to risk irrelevance. Where is the business sense in being on the wrong side of history?

Why does this matter for business?

Business has an essential role to play. This includes: reducing emissions, taking steps to assist vulnerable people in supply chains and ensuring their needs are taken into account and taking responsible public policy positions – advocating for strong measures by governments, rather than blocking action.

Employing a more diverse workforce helps companies understand the complex issues around racial, climate and gender justice – and also has direct benefits for the bottom line. According to the McKinsey study Why Diversity Matters, companies with more racially and ethnically diverse employees have a 35% performance advantage over companies relying on a white monoculture.

Diverse companies average 19 % higher revenue over monolithic companies.

Companies with gender-diverse executive teams outperform male- dominated companies by 21 % in terms of EBIT (earnings before interest and taxes) and 27 % in terms of creating long-term value. Diverse companies average 19 % higher revenue over monolithic companies, while 74 % of millennials believe their workplaces will have greater innovation if management actively makes diversity and inclusion a key component of organisational culture.

Businesses need to:

•             Take into account the inequity of risks faced by people across their value chain in terms of their vulnerability to the impacts of climate change, minimise these risks and build people’s resilience

•             Ensure equity of opportunity including access to clean energy, sustainable farming practices, green skills and jobs across the value chain

•             Listen to the voice of those who are most vulnerable, building skills and knowledge and ensuring their participation

There are a growing number of impressive exemplars in the luxury sector. Whilst SME’s like Veja and Beautycounter have social justice at their core, older business like Richemont – which owns Cartier and IWC – recently appointed Wendy Luhabe, social entrepreneur and economic activist for the empowerment of women in South Africa, to the Board as a non-executive director, member of the Governance and Sustainability Committee, and the Nominations Committee, whilst its sustainability report includes a strong focus on gender equality and workplace diversity.

Luxury brands lead the world in imagination, design direction, quality and craft, but they are currently lagging in social and environmental sustainability with many more facing accusations of ‘social washing’ just as investors and legislators around the world push for extensive social change.

Luxury companies have a brief chance to get ahead of this combination of legal and financial pressure, but action needs to be more than sloganeering. During 2020’s Black Lives Matter protests, a number of brands issued statements of support, only to find their own actions under scrutiny as protestors and even their own staff challenged their employment policies and workplace culture.

In the days following George Floyd’s death, London-based creative A Sai Ta of ASAI announced all profits from his latest Rihanna- approved dress would be donated to Black Lives Matter. A number of streetwear labels – including Pyer Moss, Noah, Awake, Just Don, Denim Tears and Fear of God, collaborated on a t-shirt bearing George Floyd’s initials, announcing that 100% of proceeds would be given to his family.

Some long-standing brands reacted appropriately. In June 2020 actor Idris Elba and his wife, the model Sabrina Dhowre Elba, took to Instagram Live with Black Lives Matter co-founder Opal Tometi to discuss the “racism pandemic” in America. In June 2021, the couple will launch a range of shoes with Christian Louboutin, with 100% of the proceeds going to charities focused on preventing racial injustice.

Kering – which owns Balenciaga, Saint Laurent, Gucci, and Bottega Veneta – and Alexander McQueen both donated an undisclosed amount of money to the NAACP, but a number of brands posted messages on social media without either taking action or donating money. Others, like LA based Reformation, donated money but were called out by employees for racially insensitive practices.

Even US Vogue editor-in-chief, Anna Wintour, apologised for her magazine’s historical publication of stories and images that may have been hurtful to or intolerant of black people.

In 2020, the speed of connection between young activists, a new wave of politicians and a sharp change of attitude amongst some of the financial sector’s largest investors means climate activists aren’t only in the streets or on social media. They’re suddenly in the boardroom and in government and they’re passing laws that will affect every company, large or small, listed or privately held. When it comes to climate justice, 2021 is the year things get real.

Financial sector activists – the new social justice warriors

This year BlackRock and Vanguard Group Inc. – the world’s largest asset managers which between them oversee nearly USD 15 trillion in assets, roughly equivalent to the GDP of China – have said they will push companies to address racial and gender diversity in 2021.

May 26, 2021 was dubbed “Black Wednesday for big oil” after Exxon shareholders, including BlackRock and Vanguard, voted to replace two of the oil giant’s board members in favour of candidates recommended by activist hedge fund Engine No. 1 while more than 60 % of investors in Chevron voted in favour of a climate resolution from Dutch campaign group Follow This to force the company to reduce its emissions. On the same day, a court in the Netherlands ordered Shell to cut emissions by 45% within 10 years. Within days, credit rating agency Moody’s warned that the credit risk of major oil producers had increased. Big oil is just the start. The investment community is coming for every sector it can, and campaigners made it clear that it was climate justice rather than simply climate change they were addressing.

“We’re seeing a convergence of issues because, really, climate issues are human rights issues. I don’t see any reason why these [arguments] won’t be replicated elsewhere. Polluters can expect to see their day in court,” Jasper Teulings, the former general counsel for Greenpeace International, told journalists after the day of action – linking investors’ climate activity to social justice.

In other words, two funds representing the equivalent of the world’s third largest economy are using their financial muscle to fight for climate justice. This is no longer a battle fought by truculent teens – these are giant battalions deploying phenomenal might to effect fundamental change. It is unprecedented. There are no road maps for times like these.

Many luxury brands feel protected from investor activism – either as private companies or as brands with smaller investors, potentially less concerned than the likes of BlackRock and Vanguard – although Deloitte’s 2020 fashion and luxury private equity and investor survey found roughly 60 % of investors have a fashion and luxury asset in their portfolio.

Above the boardroom, however, there is also a wave of legislation on the way. In 2016, nobody was talking about a Green New Deal. The idea was not unpopular, just invisible. By the 2020 presidential primaries, 20 out of 26 Democratic candidates supported it.

Versions of the Deal are under discussion in the European Union, the United Kingdom and South Korea amongst others. Ideas put forth in the Green New Deal in 2019 featured in President Biden’s recent infrastructure and jobs plans.

Source Shutterstock

What problems do luxury businesses need to think about?

Negotiators from developing countries are calling for a climate deal which not only protects the world from dangerous temperature rises, but addresses the historical injustice of climate change. According to global NGO Concern USA, there are five key inequities in climate change that need to be addressed.

1)           The degree of responsibility for climate change             

 We needed to accept that climate change is being driven by human lifestyles and consumption. We need to agree that developed nations’ lifestyles are the larger contributors to the problem. We need to understand where and how the impacts of those lifestyles and consumption choices end up — that Chad and Bangladesh, for instance, bear little responsibility for climate crisis but suffer food shortages, flooding and storms as a result of

changing conditions. Businesses need to start close to home, then work outwards. Examine your internal approaches to climate and social justice, then the places where your business has community connections and environmental impacts.

2)           The impact of climate change in the global south

The World Bank defines the global south as Asia, Africa, Latin America, and the Caribbean. Many of these countries are hardest hit and bear little responsibility. However, these are developing, emerging economies and require support from the global north if they are to enjoy the benefits of the modern world without contributing to climate crisis. They cannot be left behind or ignored. Collaborate with as many grassroots organisations

on issues of climate and environmental justice as your business can support without adding undue pressure to existing staff. By working with others, you can deliver more impact than you can alone.

3)           The ability to deal with the impact of climate change 

Climate change has a disproportionately large effect on the most vulnerable countries, which – in a cruel irony – are the least well equipped to deal with disasters like storms and drought. United Nations Climate Change Conferences have suggested a global climate fund run by the World Bank rather than the UN, which is dominated by the global north. Businesses can become advocates within their own industries, joining or creating working groups, actively advocating for policy changes, with a particular focus on your home market and its relationship with the global south.

4)         The intergenerational impact of climate change

It is clear that younger generations will suffer the consequences of climate change far more intensely than their parents and grandparents. The World Bank estimates that as Gen Z reaches its late 20s, climate change could force an additional 100 million people into extreme poverty. Droughts and floods have already stunted the growth of an estimated 150 million children around the world while a study in Peru showed that cases of potentially life- threatening diarrhoea among children rose by 8% with each degree Celsius increase in temperature. Unless a business actively understands its impact, recognises what it doesn’t know, and accepts responsibility for its own actions it can be difficult to find its voice. Often this stems from lack of diversity in your own workplace. Ensuring representation of people of colour, young people and a range of voices and opinions helps understand impact and create strategies for change.

 5)        The gender disparity of climate change 

Women and girls, according to UNICEF, spend 200 million hours a year fetching water. Women are often the last to eat if climate change threatens food security. They may be left alone to care for multiple children while their spouse goes to another area to find work or food. Even in natural disasters, women may not be allowed to leave the house on their own. Forced displacement means women are more vulnerable to domestic abuse and sexual violence. Climate justice must include gender justice.

Businesses should be evaluating and changing supply chains to support the communities in which their suppliers live and work, engaging staff and customers and bringing in lived experience leaders as board members.

Be ambitious and collaborate

Whether it is reducing carbon emissions, increasing diversity or ensuring positive social impact, the key to success is threefold – understand that it is not enough to work purely within your own four walls. Accept that your responsibility extends along the entirety of your value chain. Realise that only by setting goals in partnership with your suppliers will be able to achieve your own.

The aim is to create sustainable livelihoods, without the need for ongoing intervention.

The good news is that luxury brands are perfectly placed to join this social revolution. Most brands carry care for quality in their DNA. It should be easy to extend that care to their own people and people within their value chain – encouraging equality, diversity and inclusion throughout.

Fashion and luxury have always understood that the best ideas are to be found where social change is taking place – from Mary Quant’s mini-skirt as symbol of the sexual revolution to the surge in support for black-owned labels like Fear of God, Christopher John Rogers and Rhianna’s LVMH collaboration Fenty.

Fashion and luxury have to be true to themselves. They have always been inclusive. But by joining the social revolution, the industry gains even more, because social justice means more, not less. It means more interesting people, more creative ideas, more innovation, more profits and more beauty in the world.

This new generation is remaking the world – what is authentic will be tested by fire, what is fake will not be missed. Young people have never united across the world in such numbers, and for businesses humble enough to hear their enthusiasm, the possibilities are simply endless.

Newsletter of last week

What drives the value of crypto? – PWC’s  New Equation – The State of Fashion: Watches and Jewellery

The highlights of last week’s NEWS, for your convenience, just click on the feature to read.


European Road accidents: number of fatalities continues falling


Government support to agriculture is low on innovation, high on distortions, says OECD


AATCC announces New E-Textiles Exploratory Series!

IFAI Launches CONNECT, An Online Community


U.S. MEDC partners with Motor Bella  


Spider-inspired silk start-up won USD 100000 Ray of Hope prize

Coloreel is nominated for the Encouragement for action 2021, Fashion innovation award

Workplace Fairness Receives Cy Pres Award


How Brexit left small British business out in the cold


Climate change in action


Oerlikon Balzers signed a ten-year contract with MTU Aero Engines to coat next generation aero engine components to improve efficiency

‘Universal Passport’ Burberry Spring/Summer 2022 Menswear Presentation

Nike gets along fine Without China, for now

Canada Goose fashion brand to stop using fur by end of 2022

ASOS to make redundancies at Topshop


Lenzing supports school competition on circular economy and climate protection


Number of cross-border commuters to Switzerland has grown steadily since the turn of the millennium


First estimates of European purchasing power parities for 2020

U.S. Wage Gains at Factories fall Behind Growth in Fast Food


Continued decline in early school leavers in the EU 


Vattenfall to sell 49.5 % of the offshore wind farm Hollandse Kust Zuid to BASF


European Union’s first NextGenerationEU bond listed on Luxembourg Stock Exchange

Check out how expensive your country is


High visitor interest, very good discussions

Dornbirn congress with live feeling

Fashion Course

 ISKO contributes to new IFM-Kering fashion course


Nike launches vegan leather sneaker collection using pineapple leather

Labour Force

Share of people outside the labour force rose in 2020   

Energy storage – Solar energy from the deep repository

Swiss Eawag test with fish cells replaces animal experiments


WHO, WIPO, WTO Directors General Agree on Intensified Cooperation in Support of Access to Medical Technologies Worldwide to tackle the COVID-19 Pandemic


Burberry announced its partnership with Team Qhubeka NextHash from Tour de France 2021


Recycling: From old pants to new seats


Kohl’s CEO Michelle Gass: People are underestimating the Return of Stores

Smart Factory

Joachchim Hensch Consulting unveils programme of future activities


Textile Exchange has opened the 2021 Material Change Index (MCI) Survey


Nestlé moves beyond forest protection to a forest positive strategy and boosts its use of satellite services

Nestlé unveils Perrier® water bottles created by ground-breaking recycling technology

Vietnamese Denim Manufacturer Saitex launches sustainable “factory-farm”


Swiss Project submissions opened for Horizon Europe


Highly effective antimicrobial as well as non-biocidal-based odor control solutions (June 29 ,2021)


WTO Chair Castillo selects David Walker to facilitate WTO response to COVID-19

Business leaders express support for WTO, underline priorities for MC12

Yarn Feeding

Extend your technology lead – Customised solutions for Warp Yarn Feeding by Swiss Crealet