The UK fashion industry has copped some flak recently, with the government’s Environmental Audit Committee (EAC) last month bringing to book big name retailers including Sports Direct, TK Maxx and Boohoo for encouraging throw away habits that are wreaking havoc on our environment and society.
The consequences of our fast fashion fetish are manifold: poisoned water sources from chemical dies both at production and disposal sites, increased use of fossil fuels throughout the lifecycle (did you know that Nylon is straight up crude oil?) and exploitation of labourers in developing countries, many of whom are forced to work for poverty wages to keep the Singers humming.
According to a recent report from the United Nations, the global fashion industry is responsible for producing 20 per cent of global wastewater and 10 per cent of global carbon emissions every year – more than the emissions of all international flights and maritime shipping combined.
A study by the Ellen McArthur Foundation also found that one rubbish truck of textiles is wasted every second, while last year the Copenhagen Fashion Summit reported that fashion is responsible for a staggering 92 million tons of solid waste dumped in landfills annually (for context, the Titanic weighed 52,000 tons).
There are, however, a few Good hems (er-herm) in the fashion space, with the EAC report highlighting the good practices of leading retailers in the space – including ASOS, Marks and Spencer, Tesco, Primark and Burberry – all of which it said are ‘most engaged’ on sustainability.
In particular it praised these firms for their use of organic or sustainable cotton and recycled material in products as well as having in store take back schemes. Except for Burberry, they are all also signed up to the Sustainable Clothing Action Plan to reduce their carbon, water and waste footprint.
Cash-in on conscientiousness
If you fancy supporting the Good work of these retailers, it doesn’t have to be a one way street. While pledging to only buy your pants from those that promise not to pollute is a good start, you might also consider padding your portfolio with a few of these choice names, too.
Most stocks and shares ISAs will allow you to buy individual stocks, and this might be a nice way to add a sprinkle of shares to an otherwise diversified portfolio.
Heads up: novice investors should focus on buying funds that hold lots of companies as a starting point as this helps to spread risk. For our guide to the best Good funds out there, see the latest Good With Money Good Investment Review.
ASOS (LON: PLC)
Having been the darling of the stock market for around five years, online fashion behemoth ASOS had a spectacular fall from grace in December after a poor Black Friday period that saw it warn profits would be a shade lower. As such the share price is now trading at its lowest point since early 2015 (£32.24 per share) – a potentially strong entry point for those that believe in the long term story. And that is – let us not forget: the internet. As well as being roundly patted on the back by the government, ASOS is also a best buy for Ethical Consumer, bagging it extra Good points.
Marks and Spencer (LSE:MKS)
Good ol’ Marks and Sparks has had a bit of rough ride in recent years, with the stalwart of the UK high street seemingly unable to drag itself out of a three year slump on continual bad news from its fashion line in particular (while M&S knickers are an institution, it’s not usually top choice for our LBD’s). This could all be set to change, though, with CEO Steve Rowe promising to deliver on a bold five year plan. In the meantime, a generous 7 per cent dividend yield is a nice bump for shareholders, while the share price is cheaper than it was this time last year (£2.68).
Tesco (LON: TSCO)
Another beleaguered former high street hero, Tesco, fell out of favour a few years ago after a botched US expansion sent shares south. Of late, however, it’s been concentrating on its knitting and it’s share price is up nearly 8 per cent since February 2018 (£2.10 to £2.27). It is a regular dividend payer too, though it’s yield isn’t a patch on M&S at 1.6 per cent. While the EAC rates it highly for its efforts in the clothing division, though, Ethical Consumer has a straight up ‘avoid’ rating due to the company being a tobacco and petrol retailer, as well as for its investments in companies including Johnson and Johnson.
Primark (LON: ABF)
Another potentially surprising addition to this list is Primark, otherwise known as Associated British Foods on the London Stock Exchange. Long the poster child of poor corporate practice, Primark has cleaned up its act since the Rana Plaza disaster in Bangladesh in 2013 when more than 1,100 people were killed, many working for ABF. After that it signed a number of accords promising to change, including the Action, Collaboration, Transformation (ACT) labour rights and living-wage agreement, which neither Marks & Spencer nor Burberry are signed up to. Again though, ethical consumer isn’t a fan.
The crimes that Burberry committed against fashion in the early naughties really ought to have been enough to bury the retailer forever, however the champions of check came through and it’s still trading strong. In-fact, shares are up 28 per cent over a year, from £15.33 in Feb 2018 to £18.83 today, so now might not be the best time to buy if you’re looking for a bargain. On its sustainability agenda, the EAC says it welcomes Burberry’s commitment to end the incineration of unsold stock and acknowledges it is engaged with a range of sustainability initiatives to reduce its environmental impact.
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