Open Innovation: How to Meet the Challenges of Sustainability

Environmental sustainability, transparency and supply chain traceability have become critical concerns for the fashion industry worldwide. In the United States and Europe, as well as globally, consumers and lawmakers are increasingly demanding accountability from fashion companies.

Existing fashion regulations, especially those pertaining to consumer safety, often place the burden of responsibility on buyers and struggle to effectively address labor issues within subcontracted manufacturing. In response, new legislation specific to the fashion industry is emerging in the United States. Bills like the New York Fashion Workers Act, Fashioning Accountability and Building Real Institutional Change Act (FABRIC Act), New York Fashion Sustainability Act, and Social Accountability Act are being proposed to regulate labor practices, enforce workplace accountability, and mandate sustainability reporting.

Meanwhile, in the European Union, the Product Environmental Footprint regulation, effective from 2025, will require member state companies to furnish consumers with comprehensive product impact details. This initiative focuses on assessing a product or service's entire environmental journey, from inception to disposal, with the goal of creating a unified approach involving all stakeholders in the product lifecycle.

These regulatory shifts are reshaping the fashion landscape. For fashion brands, prioritizing sustainable development now presents a competitive edge. Those that swiftly comply with these regulations and embrace eco-friendly, transparent practices are better positioned to thrive by 2025, achieving profitability while respecting the environment ahead of their competitors.

Failure to adapt carries serious risks, including legal penalties and consumer disengagement. Despite the urgency imposed by governments and regulators, many fashion brands struggle to keep pace due to numerous obstacles, particularly in measuring and understanding their products' environmental impacts. This challenge underscores the need for open innovation.

Innovation: The Power of Collective Intelligence

Popularized in the early 2000s, open innovation is a nontraditional approach that brings together the know-how and skills of different players to collectively design and develop products or solutions. This method has many advantages for fashion companies: it enables them to adopt a more holistic approach by gathering the views of a wide variety of professionals and experts to create the products or services that consumers expect thanks to direct consumer feedback, to share knowledge and, ultimately, to gain competitive advantage.

At present, sustainability is the primary topic of discussion among fashion players. Due to its complexity, the subject has been divided into various subcategories to facilitate reflection and the search for solutions: traceability, product lifecycle assessment, circular fashion, digital product passports, etc. The aim of a model based on open innovation is to establish closer relationships with customers and partners, better understand their critical needs, and collaborate to create solutions together to meet their current challenges.

Overcoming the Challenge of Traceability Through Participative Innovation

Fashion brands are racing against time to measure their environmental footprint and comply with new regulations. Supply chain traceability plays a key role in achieving this. Data availability and management have therefore become essential. As governments and regulatory authorities haven't provided them with specific data standards, companies are developing different models based on those already used in their software. Each company has its own definition of a product's environmental impact and its own rating system, leading to a wide variety of results.

Until now, there have been few solutions in the industry specifically designed for collecting, storing and analyzing data relating to the environmental footprint of products. The various players therefore had to use the tools they already had at their disposal (PLM, PIM, ERP, SCM or Microsoft Excel) to collect the necessary product data and classify it according to environmental criteria, which was a particularly time-consuming activity.

Brands used to have information about their products but had to obtain energy consumption data from their suppliers. This was a tedious, complex task that was difficult to adapt to an entire collection. Without this essential data, it's impossible to accurately calculate a product's environmental footprint.

In the fashion industry, this approach is particularly well-suited to the implementation of solutions ensuring reliable, efficient and transparent product traceability, from the production of the initial fibers to the end-of-life of the garments. Participatory innovation is at the origin of today's most effective tools for helping all players to meet their legal obligations and actively contribute to the introduction of genuinely more sustainable modes of operation.

From this perspective, participatory innovation is a strategic tool, enabling us to collectively develop a standardized data model, collect data on a similar garment from different participants, and carry out a software test run.

As the saying goes, two heads are better than one. The whole point of bringing together a group dedicated to participative innovation lies in the fact that all participants work together to solve a common problem. Everyone can share their concerns, exchange ideas freely, and quickly come up with new ideas and solutions.

Leonard Marano is president, Americas at Lectra, a company that offers industrial intelligence solutions — software, cutting equipment, data analysis solutions and associated services — that facilitate the digital transformations of the companies it serves.