It started as a slow fade. Brands that once exuberantly trumpeted new “sustainable” collections or initiatives turned down the volume on the topic, or hit pause altogether.

Then came the job cuts. Personnel in senior sustainability roles, that just a few years ago were in hot demand, are now on the chopping block. Nike and Canada Goose have retooled their sustainability teams amid broader restructurings. Moncler removed its chief sustainability officer earlier this year. To be sure, many companies are still hiring for sustainability roles, but the industry is rethinking how it resources and manages sustainability teams, recruiters said.

Some companies, including Asos and Crocs, have already ditched or delayed climate targets, stating that their original goals were either not robust enough or unrealistic.

Brands say they are restructuring to better align with changing standards and business realities, rather than lowering their sustainability ambitions in response to new market uncertainties and political pressures. But the shifts threaten to further delay or derail the industry’s already lagging climate progress, even as a 13-month streak of record-breaking temperatures has made the consequences of inaction increasingly clear.

“A lot of ambitions have been put on pause or scaled back during a rather critical time,” said Catherine Harris, director of sustainable business in the Americas for recruitment firm Acre.

Strictly Business

In the aftermath of the 2015 Paris Agreement — the historic UN-brokered pact to cap global warming below levels that would prove catastrophic to humanity — and amid a pandemic-fuelled consumer “awokening,” big brands rushed to set and publicise ambitious sustainability targets with little thought to how they would actually meet them.

Deadlines set for 2030 were more than a decade out, there were marketing points to be won in the near-term and, since the commitments were voluntary, there were no real strings attached.

Now, inflated goals are colliding with shifting business priorities, as companies look to cut costs and shore up growth in a volatile market. Sustainability — which often contributes to the bottom line in ways that are hard to value — is an easy target. More so since some investors have cooled on strategies that prioritise environmental, social and governance issues alongside sales growth. The trend extends well beyond fashion, particularly in the US, where a political backlash against “woke capitalism” has prompted some companies to ditch both diversity and climate targets.

A lot of ambitions have been put on pause or scaled back during a rather critical time.

Sustainability and diversity, equity and inclusion “are the two functions that were really big in 2020. There were big commitments, big investments when companies were thriving,” said Lisa Butkus Yae, a partner at executive search firm Hanold Associates. “But as soon as things started to cool, these are the two functions where there was a quick pull back or less resourcing.”

Around 30 percent of Nike’s sustainability focused staff have been laid off or left voluntarily since the company announced a $2 billion cost cutting effort in December, according to an investigation by The Oregonian/OregonLive and ProPublica published last month. Nike said the changes to the team reflect a strategy to embed sustainability work across the business, rather than assigning it to dedicated staff.

Canada Goose laid off nearly half of its seven-person corporate citizenship team after announcing job cuts in March, though the company said it has plans to expand the team again with new roles. Both companies said they remain deeply committed to sustainability.

Across the sector, restructured teams face an increasingly difficult task to meet sustainability targets that were already lagging. About two thirds of fashion brands are behind on their own decarbonisation schedules, according to analysis from consultancy McKinsey & Company published earlier this year. Nearly half have seen their carbon footprint go up since promising cuts. Meanwhile, companies that have made progress need to accelerate their efforts. That means intensified investment and focus at a time when both are in short supply.

Nike’s emissions fell last year, but they’re far off the sportswear giant’s 2030 goal to reduce supply-chain emissions (where the bulk of the fashion industry’s carbon impact occurs) by 30 percent compared to 2015 levels. Instead they’re slightly up from this baseline, though they’ve been on the decline since the company set the commitment in 2019. Canada Goose is aiming to complete the process of setting science-based targets for its supply-chain emissions this year.

Reality Check

The changes also reflect tightening regulation and evolving standards that are prompting companies to reevaluate and refocus their approach to sustainability initiatives. Many have become more cautious in the way they communicate achievements and set targets amid a wide-ranging greenwashing crackdown.

In March, Gap Inc., Prada Group and Versace-owner Capri Holdings were among hundreds of companies that either didn’t submit or failed to set sufficiently ambitious long-term climate plans to pass validation by the Science Based Targets initiative (the world’s top arbiter of corporate climate goals).

The companies had pledged several years earlier to establish net-zero emissions targets aligned with the Paris Agreement by early 2024, a tougher standard than many had previously aspired to. In a survey published by SBTi in March, companies cited a range of reasons for missing the deadline. The most common included a lack of clear standards, uncertainty over whether targets could actually be achieved and the extreme challenge presented by getting a handle on supply chain emissions.

Gap and Prada said they remain committed to reaching net zero emissions by 2050. Gap said it submitted a revised target to SBTi earlier this year. Prada is aiming to complete an update to its commitment in the first half of 2025. Capri did not respond to a request for comment.

Incoming regulations are also reshaping the way companies structure their sustainability teams, shifting emphasis to regulatory compliance and away from aspirational goals. Prada said it’s expanding its sustainability team after committing to public targets that it will need to report on. Canada Goose is planning to expand its traceability team. Moncler said it was actively recruiting for additional roles.

Recruiters said the structure of teams are changing, too. C-suite positions are increasingly being slashed, with key activities layered into more operational roles. New hires are often more focused on change management than grand strategy, they said. The shift is similar to what happened with roles companies created to navigate the rise of e-commerce in the mid-2000s; specialised departments run by chief digital officers have increasingly faded away as the skills they represented became more embedded in the business.

“It’s too simplistic to say it’s a pullback,” said Butkus Yae. “It’s more of a learning in understanding how sustainability fits into an organisation and how you can set someone up for success.”

The challenges are not unique to the fashion industry. In March, the oil major Shell ditched a 2035 target to curb its greenhouse gas emissions and tempered one set for 2030; consumer goods giant Unilever watered down flagship goals to cut plastic pollution and preserve biodiversity in April; and last week Air New Zealand became the first major airline to scrap 2030 emissions target.

The companies have blamed the moving goalposts in part on forces beyond their control. New technologies are proving too slow to come to market; governments haven’t done enough to support action; and regulatory controls and standards aren’t robust enough.

In the meantime, the world keeps getting hotter.

In order to forge authentic connections with target consumers in today’s market, brands must build cultural verticals to engage communities and provide meaning.

Sixty-nine percent of Gen-Z shoppers agree with the statement that what they wear says something about them, according to new research by Ipsos. This expectation is even higher when turning to younger consumers, with 77 percent of teens agreeing with the same statement. “Today, the most likeable brands are not necessarily the biggest in the world (although that helps), or the most outrageous (although that helps, too),” says Lauren Sherman, fashion correspondent at Puck Media. “What they have in common is an understanding that as our culture continues to fragment into oblivion, you cannot be everything to every person.”

Neft Vodka is a creatively positioned, premium beverage company which platforms creativity through a virtuous cycle of innovations and activations. The brand then reinvests those efforts in order to distinguish and establish their own creative identity in the market.

Since 2020, Neft’s Emerging Film Talent International Competition (NEFTI) was devised to provide opportunities and mentorship for filmmakers from emerging regions to pitch and produce their stories, which are financed by Neft, for a global audience. Currently in its 6th competition, NEFTI has produced over 20 films with filmmakers from these regions and continues to help them excel. In further support of emerging creative talent, Neft Vodka has partnered with many organisations supporting the arts, including Art Hearts Fashion for New York Fashion Week 2023. This year, Neft is the official partner of the BoF 500.

To learn how Neft Vodka fosters the creative class across its business and through collaboration with adjacent industries and mentorship, BoF sits down with Paul Robinson, Neft Vodka’s chief creative officer.

Why is supporting the creative class a key strategic pillar for Neft Vodka?

I truly believe that art makes life richer, and when you come across an artist in any field that is talented, innovative and unique, it often opens your mind to a new perspective and entices you to engage with that artist’s vision. There is a feeling of real excitement when you first experience a creation and you can sense the effort and passion that the artist has put into the piece. That is something we strive to do at Neft — we want to invoke this sense of excitement, creativity and engagement, and bring exceptional experiences to our audience.

However, none of this would be possible without supporting and investing in the creative class. It’s especially important to us to support those in the early stages of their careers, many of whom haven’t yet had the opportunity to share their vision beyond their immediate surroundings.

So, supporting and collaborating with artists that are innovative and individualistic is a strategic priority. It has been very fulfilling for us to help those artists excel, realise their goals and develop their creative potential. In turn, Neft is able to evolve creatively and find innovative ways to market our brand. We feel strongly that creativity is the way forward.

What innovations or activations can you share that showcase this creative strategic vision?

NEFTI is a short film competition we hold for filmmakers in emerging economies and underrepresented regions. In collaboration with the International Emerging Film Talent Association and other partners, our goal is to support filmmakers, to help them learn new skills, and present them with new opportunities, including the ability to reach a global audience.

Supporting and collaborating with artists that are innovative and individualistic is a strategic priority — it has been very fulfilling for us to help those artists excel

Another project we have just launched is the Neft Global Art Competition which aims to support artists across other disciplines, from painters and photographers through to visual and graphic artists. Each month, we accept applications from artists who send in their creations. We choose the semi-finalists while the finalists and overall winners are chosen through online voting and then awarded cash prizes to further fund their craft. At the end of each year, we will have an event to unveil the winning artist, supporting and spotlighting them. There is so much talent out there, but opportunities are few and increasingly narrow. Leveraging Neft in order to facilitate these initiatives — and watch as the new creative class develops sharing their vision on a global scale — has been particularly fulfilling.

How do you utilise the creativity you nurture to support business goals?

One of the components of the NEFTI competition is a task that centres around incorporating Neft vodka into a short film — not as product placement or the basis for the story, but rather as a cleverly intertwined component of the storytelling. The brand benefits from this commercially, but the main purpose of this task is education. Most of the filmmakers who apply haven’t worked with a brand, under brand guidelines, and haven’t worked in a commercial setting. It equips those filmmakers with commercial experience to expand their career and have the ability to work with brands in the future.

We found that many NEFTI participants would say it was their favourite part of the competition due to the uniqueness of the task and having to stretch beyond their core skill sets. As NEFTI has progressed, we have started to bring in other brands for filmmakers to use, to really develop and nurture their skills. By putting ourselves out there as a brand that grows with artists, it embeds creativity into our brand DNA. We are building a virtuous cycle that’s beneficial to our brand but empowers those we collaborate with and support.

Why is the fashion industry Neft Vodka’s next focus area?

I began my career working as a fashion photographer, so the fashion industry is close to my heart. It encompasses so many different elements of the arts and has such a massive influence on almost every other industry. There is ample opportunity to be involved with the creative class, be that fashion photographers, stylists, artists, creative directors or designers. At Neft, our priority is the artists themselves and finding ways we can support them most effectively. After all, they are the visionaries and the future of industry.

By putting ourselves out there as a brand that grows with artists, it embeds creativity into our brand DNA. We are building a virtuous cycle.

We want to be able to evolve with those who drive change, progress and mould where the industry goes. There are so many aspects of the fashion industry that align with our brand and the direction we have chosen. The spirit space is a very crowded market and so, for us, it is so important to to continue to progress and evolve our voice as a brand. Aligning with industries like fashion and placing emphasis on creativity is absolutely a strategic priority.

What are your ambitions for Neft Vodka over the near and medium-term?

In the near-term, we have several ongoing programmes that we want to continue to expand, like the NEFTI Competition and the Neft Global Art competition. We are also planning to develop a NEFTI type of competition for the fashion industry. Scaling and creating new projects like these as well as expanding into new markets is an immediate focus for us as we continue to build Neft into the brand we want to be — one that supports emerging artists and the creative class.

This year has also been our entrance into the fashion industry. While we have had a presence at New York Fashion Week and have done some other smaller sponsorships with fashion partners, working to tell our story within the industry and support creative talent remains a key goal.

Our brand is very much about finding partners that are going to be long-term. We really value building those relationships and would like to continue on that path of aligning with adjacent industries and growing the communities that we support.

This is a sponsored feature paid for by Neft Vodka as part of a BoF partnership.

Coupang Inc. posted its first loss in two years, after the acquisition of unprofitable Farfetch Holdings Plc and a government regulatory fine offset strong growth in its core e-commerce business.

South Korea’s largest online retailer posted a net loss of $77 million for the June quarter, versus an average estimate for a loss of $11.7 million. Excluding Farfetch and a fine from the Korean authorities, Coupang’s second-quarter net income came to about $124 million, it said in a statement.

The shares fell more than 5 percent in late US trading.

The losses overshadowed resilient top-line growth. It reported a net revenue increase of 25 percent to $7.3 billion. Shares in Coupang, which popularised one-day delivery in Korea, have climbed about 26 percent this year after the company posted its first full year of profit in 2023. It’s now seeking growth by expanding into newer arenas like Taiwan even as Alibaba Group Holding Ltd.’s AliExpress and PDD Holdings Inc.’s Temu push into its biggest market.

Chief executive officer Bom Kim told analysts during an earnings conference call in May the company will continue to invest heavily to speed up delivery across its markets. The company expects Farfetch — the online luxury company it acquired in January — to achieve close to positive adjusted earnings before interest, taxes, depreciation and amortisation on a run-rate basis by the end of 2024.

It’s also grappling with allegations it favours its own private-label goods at the expense of third-party merchants in search results. Korea’s Fair Trade Commission said in June it imposed a tentative fine of 140 billion won ($102 million) for alleged legal violations. Coupang has said it will “vigorously appeal” the regulator’s findings.

By Yoolim Lee

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Can Farfetch Survive Coupang’s Shock Therapy?

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Nobel Prize-winning economist Muhammad Yunus has been appointed the head of Bangladesh’s interim government, a key step toward restoring order after weeks of protests drove former Prime Minister Sheikh Hasina from the country.

The widely expected decision to tap the high-profile development banker was announced by President Mohammed Shahabuddin’s office, who had earlier met with the country’s armed forces and protest leaders, who called for Yunus to take the role.

“The country is now going through a transitional period. It is important to form an interim government as soon as possible to overcome this crisis,” Shahabuddin said.

Yunus will return to Bangladesh “soon,” protest leader Nahid Islam said in a televised briefing in the capital Dhaka on Tuesday night, adding members of the interim government have yet to be finalised.

What started out in late June as peaceful protests seeking to abolish a government jobs quota turned into deadly unrest in recent weeks with demonstrators seeking to oust Hasina, who had show little sign of backing down. Her sudden resignation follows a weekend of student-led clashes with pro-government supporters that pushed the death toll from the violence since mid-July to about 350 people, according to news reports and data from local hospitals and police stations.

Yunus’ top task will be to restore calm after Hasina, who turned Bangladesh into an economic success and ruled with an iron fist, fled Monday to India and her official residence was ransacked. Shahabuddin, backed by the country’s powerful military, has vowed to hold elections “as soon as possible.”

Yunus, 84, who pioneered micro-loans as a tool to fight poverty, had faced legal trouble under Hasina that he has called politically motivated.

Hasina was the world’s longest serving female head of a government, winning a fourth term as prime minister in an election in January that was boycotted by her opponents and voters. The US, the biggest buyer of Bangladesh’s exports, had criticised the polls, and imposed visa curbs on members of Hasina’s party and law enforcement officials in September.

While Hasina’s Awami League party dominated parliament, the army chief invited none of its members to talks on forming an interim government. On Monday, thousands of jailed protesters were freed, as well as Hasina’s rival and opposition leader Khaleda Zia — a former prime minister herself.

By Arun Devnath

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What the Crisis in Bangladesh Means for Fashion’s Supply Chain

The country’s prime minister resigned and fled the country on Monday after weeks of protests roiled the world’s second-largest garment exporter.