Under Pressure: Can Fashion's Sustainability Efforts Survive?
The event, which is typically dominated by large brands offering up a relentlessly optimistic prognosis on the industry's climate efforts, was unusually downbeat this year. Many of fashion's biggest companies were noticeably absent — a function of squeezed travel budgets and fear (few executives appeared willing to weigh in on an increasingly politically charged topic where there is little positive to say).
To be sure, advocates for a greener, kinder fashion industry have quietly acknowledged that the movement was struggling for a while. But they held out hope that moves to toughen up regulation would keep forcing things forward.
This year, that has all but evaporated. A rightward swing in Europe has prompted a regulatory rollback in the name of competitiveness. Brussels is pushing to cut red tape and simplify pioneering environmental reporting and due diligence requirements in a move critics argue undermines the legislation.
'Europe has failed,' Danish brand Bestseller's stakeholder engagement and human rights manager, Claus Teilmann Petersen, said during a panel discussion teeing up the summit. 'I see this battle as being… kind of lost.'
Then there is the active threat posed by the Trump administration, which has pulled the US out of the Paris Climate agreement, slashed funding from programmes focused on labour rights and climate action and launched a chaotic trade war that has plunged much of the industry into survival mode.
Instead of looking for progress, many in the space are just trying to figure out what can be saved.
'There's this sort of paralysis that's happening right now,' the American Apparel and Footwear Association's senior director for sustainability Chelsea Murtha told the summit. 'Everyone's trying to figure out what can we continue to hold onto.' What Next?
On the sidelines, many insiders acknowledged the movement is running on fumes. Already some companies are making small sustainability sacrifices in the name of economising, opting to switch out pricier lower impact materials for cheaper, more conventional ones, I was told. Attendees said expected companies to largely stay the course with programmes already in place, but acknowledged the uncertainty was likely to slow future action.
It's not clear where new momentum could come from. Until there's more clarity on tariffs, the industry is holding a collective breath. The EU is still pushing forward with regulations that would set more sustainable design and recycling requirements, but these have yet to be fully defined.
Alongside the usual calls for more collective action and innovation, there was a greater focus on the importance of advocacy in favour of policies that could lend fresh support to fashion's climate efforts.
'We need to have courage,' said slow fashion pioneer Eileen Fisher. 'We have to do more and show up and collaborate more.'
The real remaining wild card is climate change itself. This year is once again on track to be one of the warmest on record. Increasingly extreme weather is a threat to raw material supply chains, worker safety and retail traffic. So far, disruptions from floods, wildfires and searing heat have not led to significant disruptions for the industry. Still, with future costs of climate change expected to mount into the trillions of dollars in the future, fashion may come to regret complacency today.
THE NEWS IN BRIEF
FASHION, BUSINESS AND THE ECONOMY (Getty Images)
Gucci owner Kering is in talks to sell its stake in a $1 billion Fifth Avenue property. The negotiations to sell the 115,00-square-foot property which Kering purchased last year to buyout group Ardian are part of the French luxury group's strategy to cut costs and sell stakes in prime real estate to shrink its debt, Reuters reported.
Lululemon cut its annual profit forecast as demand slows amid looming tariffs. Despite new product offerings, the activewear company's sales momentum is lagging behind that of competitors like Alo Yoga and Vuori. Stock plummeted 12 percent in after-market trading on Thursday.
Prada acquired a 10 percent stake in Italian leather group Rino Mastrotto. Under the deal, which comes as the Italian luxury group aims to shore up control over its production processes, Prada will give the Renaissance Partners-backed leather group a cash investment of undisclosed value and two tanneries.
Cartier reported some customer data was stolen in a cyberattack. The Richemont-owned jeweller's client information, including email addresses, countries and names, was obtained by cybercriminals after its website was hacked. The incident is the latest in a wave of cyberattacks on retailers.
Rent the Runway forecast double-digit subscriber growth in 2025. Shares rose 12 percent Thursday afternoon after the rental service announced it had ended its most recent quarter with a record number of active subscribers. Year-on-year revenue fell 7.2 percent to $70 million.
De Beers drew interest from ex-CEOs as Anglo started its sale. Anglo American Plc plans to begin a formal sales process for De Beers, the final step in its restructuring plan. Former De Beers CEOs Gareth Penny and Bruce Cleaver, and Australian miner Michael O'Keeffe are reportedly each leading groups of potential buyers.
A Skechers shareholder sued the company over details on the $9.4 billion 3G buyout. The shareholder alleged founder and controlling shareholder Robert Greenberg to have 'controlled the sales process to a single bidder and deprived the minority stockholders of any legitimate bidding process,' according to the legal complaint.
Shein was hit with a complaint from an EU consumer group over 'dark patterns.' Pan-European consumer organisation BEUC filed a complaint with the European Commission on Thursday, citing 'aggressive commercial practices' like pop-ups, notifications and countdown timers that pressure people to make a purchase on Shein's app and website.
Victoria's Secret said a cyber incident led to its temporary website shutdown. The intimates chain said it detected an information technology systems-related security incident, which caused it to shut down its website between May 26 and May 29. The incident did not impact its first-quarter financial results.
Temu's daily US users have halved following the end of the 'de minimis' loophole. The site's daily US users plummeted 58 percent in May. Both Temu and Shein have suffered a severe drop in sales and customer growth rates since US President Trump announced sweeping trade tariffs and the end of low-value duty-free shipments from China.
Sotheby's will auction an original Hermès bag that belonged to Jane Birkin. The black leather handbag, which was initially commissioned in 1984 for the late singer before being commercialised under her name, will be made available for sale in Paris on July 10.
THE BUSINESS OF BEAUTY (Huda Beauty)
Huda Kattan bought back Huda Beauty. Iraqi-American beauty influencer Kattan regained full ownership of her eponymous brand after buying back a minority stake that private equity firm TSG Consumer Partners had held since 2017.
L'Oréal is reportedly poised to acquire Medik8. The Financial Times reported that the British skincare brand's current owner, private equity group Inflexion, and L'Oréal are close to finalising an agreement.
Procter & Gamble will cut 7,000 jobs over two years. The manufacturing company announced it would cut about 6 percent of its global workforce, with plans to exit some categories and brands in individual markets.
PEOPLE ()
Nike's CEO finished his C-suite makeover with a former McDonald's executive. McDonald's senior VP Michael Gonda will join the world's largest sportswear brand as chief communications officer in July, the latest leadership reshuffling under the turnaround strategy of CEO Elliott Hill, who rejoined Nike from retirement in October.
Better Cotton appointed Nick Weatherill CEO. Weatherill, a former International Cocoa Initiative executive director, will succeed longtime CEO Alan McClay. The 20-year-old sustainable cotton initiative now certifies a fifth of the world's cotton production, but is amping up its oversight following criticism that its standards are too lenient.
Kiko Milano named Drew Elliott its chief brand officer. Elliot, the former MAC Cosmetics global creative director, will assume the chief brand officer role on Sept. 1. The appointment comes as the Italian cosmetics company looks to expand its presence in the US market.
Violet Grey named a former Bluemercury executive as group president. Tracy Kline will join the beauty retailer as group president on June 9, overseeing the company's team, supply chain, stores, merchandising and marketing.
Longtime beauty editor Jane Larkworthy died at 62. Larkworthy, who served as the beauty director of W magazine and more recently as a columnist for New York Magazine's The Cut, is credited as the editor responsible for popularising Le Labo's Santal 33. She died on Wednesday after a battle with cancer.
Compiled by Jessica Kwon.
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Associated Press
a few seconds ago
- Associated Press
Brazil's Lula announces $5.5 billion in credits for exporters hit by US tariffs
SAO PAULO (AP) — The Brazilian government on Wednesday unveiled a plan to support local exporters affected by a 50% tariff imposed by U.S. President Donald Trump on several products from the South American nation. Dubbed 'Sovereign Brazil,' the plan provides for a credit lifeline of 30 billion reais ($5.5 billion), among other measures. Brazil's President Luiz Inácio Lula da Silva described the plan, which includes a bill to be sent to Congress, as a first step to help local exporters. Congressional leaders attended Wednesday's ceremony, a first in months, in a sign of growing political support for the leftist leader in response to Trump's tariffs. Other measures announced by the Brazilian government include postponing tax charges for companies affected by U.S. tariffs, providing 5 billion reais ($930,000) in tax credits to small and medium-sized companies until the end of 2026 and expanding access to insurance against cancelled orders. The plan also incentivizes public purchases of items that could not be exported to the U.S. 'We cannot be scared, nervous and anxious when there is a crisis. A crisis is for us to create new things,' Lula said. 'In this case, what is unpleasant is that the reasons given to impose sanctions against Brazil do not exist.' Trump has directly tied the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest. ___ Follow AP's coverage of Latin America and the Caribbean at
New York Times
a few seconds ago
- New York Times
U.S. Ethics Agency Warns Bessent Over Conflicts of Interest
The U.S. government's ethics watchdog agency warned this week that Treasury Secretary Scott Bessent has failed to comply with an agreement that required him to divest his financial assets, posing potential conflicts of interest as he leads the Trump administration's economic policy agenda. The United States Office of Government Ethics sent a letter dated Aug. 11 to Senator Michael D. Crapo, the Republican chairman of the Senate Finance Committee, alerting him to Mr. Bessent's delinquency in fulfilling or amending the agreement. The questions about conflicts of interest come as Mr. Bessent is steering President Trump's agendas on taxes, trade and financial deregulation. A millionaire former hedge fund manager, Mr. Bessent pledged before his confirmation hearing in January to divest from dozens of funds, trusts and farmland investments. In a letter to the Treasury's ethics office at the time, Mr. Bessent, who was formerly the top investor for the liberal billionaire philanthropist George Soros, said that he would do so to 'avoid any actual or apparent conflict of interest.' Cabinet officials are required to shed certain holdings and investments within 90 days of being confirmed to avoid the potential for conflicts of interest. Mr. Trump has pushed the boundaries of traditional government ethics norms by publicly pushing his business interests, and top Trump administration officials have reached unusual ethics agreements that have allowed them to oversee government matters that involve former lobbying clients or could benefit family members. Most members of Mr. Trump's cabinet have completed their compliance agreements, but Mr. Bessent has not yet lived up to that commitment. 'I am notifying you that Scott Bessent, secretary of the Department of the Treasury, has failed to timely comply with certain terms of the ethics agreement he signed and that O.G.E. previously provided to your office for consideration during his confirmation process,' Dale Christopher, the ethics office's deputy director of compliance, wrote to Mr. Crapo in a letter on Monday that was reviewed by The New York Times. Mr. Christopher said that Mr. Bessent was required to divest from certain investments or sell assets by April 28. The Treasury secretary made changes to his ethics agreement on May 2 and June 5, but still has yet to fully honor his pledge and has offered no timeline for when he will comply. 'O.G.E. will continue to monitor the status of the secretary's compliance with his ethics agreement,' Mr. Christopher wrote. 'O.G.E. has also advised Treasury's ethics officials to emphasize to the secretary that it is his personal responsibility to avoid taking any action that could create a real or apparent conflict of interest with regard to his holdings.' In a follow-up letter that the ethics office sent to the Senate Finance Committee on Wednesday, Mr. Christopher said that Mr. Bessent subsequently indicated through Treasury ethics officials that he was committed to complying with the divestiture agreement by Dec. 15. 'The ethics officials explain that the assets are illiquid and are not readily marketable,' Mr. Christopher wrote. 'They add that excluding the farmlands, the assets also have significant restrictions on who can acquire them and that the secretary has been working to divest them since his confirmation in January 2025.' Treasury officials told Mr. Christopher that Mr. Bessent would continue to be recused from 'particular matters' affecting his assets and that the department's ethics staff had given Mr. Bessent's office a 'screening memorandum' to help identify potentially conflicting matters that the secretary might encounter. Mr. Bessent said in a statement that he divested 90 percent of the assets that he was required to before assuming office and that just 4 percent of the required divestitures remain. He explained that much of what remains is farmland, which is 'an inherently highly illiquid asset,' and made clear that he was not using the job for personal financial gain. 'The honor of serving the American people under President Trump can't be ascribed a dollar value,' Mr. Bessent said. 'As agreed upon with O.G.E., I am working towards selling the rest of my required divestitures before the end of this year.' The Treasury secretary added that he was 'committed to full transparency and disclosure in my personal finances.' After he was nominated, Mr. Bessent shuttered his Key Square Capital Management investment fund and resigned from several nonprofit organizations and trusts that he oversaw. The letter from the Office of Government Ethics does not specify exactly which holdings Mr. Bessent has yet to divest. However, in a June letter to the Treasury's ethics office, Mr. Bessent said that he would not divest from a private equity fund or his investments in a flavored water company and a clinical stage drug development company. He explained that the assets, which he originally pledged to divest, proved too difficult to sell and that officials from the government ethics office confirmed that they did not pose conflicts of interest. 'I initiated the process to find buyers for these private holdings, but all three assets are privately held investments for which there is no liquid market for their resale,' Mr. Bessent wrote. The biggest potential conflict of interest for Mr. Bessent is his ownership of as much as $25 million of soybean and corn farmland in North Dakota. The land spans thousands of acres in Burleigh, Kidder, Eddy, Benson and Wells Counties and earns Mr. Bessent as much as $1 million a year in rental income, according to his financial disclosure form. Cropland values in the state have been rising by more than 10 percent annually over the last four years, according to data from North Dakota State University. Farm brokers in North Dakota were not aware of a public listing of Mr. Bessent's properties and noted that there was traditionally a six-week marketing period before an auction. Wealthy individuals such as Mr. Bessent might also try to sell a big portfolio of land privately. The sale of Mr. Bessent's farms could be complicated by the U.S. trade war with China, which the Treasury secretary has been actively trying to defuse. According to William Wilson, a professor at North Dakota State University, about 70 percent of North Dakota soybeans are exported to China. As trade tension escalated this year, however, China has purchased more of its soybeans from Brazil and has bought virtually none from the United States. Although real estate holdings can be more complicated to sell than other assets, senior government officials have historically been able to take other measures to distance themselves from assets that could pose conflicts of interest. In 1977, President Jimmy Carter, who was a peanut farmer, put his family farm supply business into a blind trust. According to his presidential library, the trust allowed for a law firm in Atlanta to take full administration of the business while he was in office. When Mr. Carter reclaimed the business after his failed re-election bid, it was $1 million in debt. It is not clear how Mr. Bessent, who has at times referred to himself as a farmer, is disentangling his holdings from trade negotiations with China. At his confirmation hearing in January, he said that one of his first acts as Treasury secretary would be to push China to honor the commitments to buy American farm products that it made during Mr. Trump's first term. Soybean purchases have continued to be a central part of the trade negotiations with China. In a post on Truth Social this week, Mr. Trump urged China to quadruple its purchases of American soybeans. 'Our great farmers produce the most robust soybeans,' Mr. Trump said. Ethics watchdog groups have raised alarm about Mr. Bessent having conflicts of interest while serving as the nation's top economic policymaker. On Wednesday, the Campaign Legal Center and the Democracy Defenders Fund filed a formal complaint with the government ethics office and requested that the Treasury's inspector general investigate whether Mr. Bessent had violated criminal conflict-of-interest laws. The groups pointed to Mr. Bessent's role overseeing trade negotiations, regulation of cryptocurrency markets and policies that affect private equity funds. 'Secretary Bessent's continued deferral of his ethics obligations raises serious concerns about whether he is complying with the ethics laws or not,' wrote officials from the Campaign Legal Center and the Democracy Defenders Fund, which is led by the former Obama administration ethics czar Norm Eisen. Democrats in Congress have also been scrutinizing Mr. Bessent's holdings. Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee, suggested that Trump administration officials were being duplicitous by flouting federal ethics guidelines. 'If these guys gave a whit about clearing the stink of corruption off this administration,' Mr. Wyden said, 'then you wouldn't have the Treasury secretary picking and choosing which ethics requirements to follow and which to blow off.'
CNN
a few seconds ago
- CNN
Beneath Trump's China truce, a race to find pressure points in high stakes game of ‘3D chess'
The United States and China have settled into a steady state of pragmatic, if uneasy, détente. Tariffs sit at unprecedented, but not economically debilitating levels. Three rounds of bilateral talks have steadily developed and expanded, with a fourth expected this fall. President Donald Trump and Chinese leader Xi Jinping are circling an in person meeting before the end of the year. 'I don't think anyone wants to see those tariffs snap back to 84%,' US Trade Representative Jamieson Greer said ahead of Trump's decision to sign off on a 90-day extension of the trade truce agreement put into place in May. But beneath the surface, Trump's trade war has dramatically accelerated efforts to find and demonstrate an ability to exploit vulnerabilities that will define the future of the relationship and shape the potential conflict for years ahead. China's grip on rare-earth elements, critical for electronics, defense equipment and other crucial products, has triggered an urgent scramble across the US government and its allies. Despite an agreement that China would unlock the supply of rare earths, US officials and corporate executives with knowledge of the acquisition and export process say there remain difficulties for critical industries, exceedingly granular demands for corporate data and a seemingly implicit effort to choke off some national security related purchases. 'It was a wakeup call to the world,' a senior White House officials said. 'That was a major thing in world geopolitics.' Xi's ability the choke off western access to essential components has become the dominant topic of discussion during all three rounds of bilateral talks so far. 'We're focused on making sure that the flow of magnets from China to the United States and the and the adjacent supply chain can flow as freely as as it did before the control,' said Greer, leading up to Trump's extension of the pause, as US and Chinese continued intensive technical discussions behind the scenes. 'And I'd say we're about halfway there.' At the same time, US technological advantages have sparked sharp rebukes and a push to rapidly ramp up capabilities in Beijing. The United States also probed clear choke points in supply for industries critical to China's economy. America imposed export controls for software tools, aerospace equipment and the sale of ethane, a major petroleum byproduct for China. The actions weren't heavily publicized – most of the coverage came from corporate securities filings or leaks from frenzied executives. Some of those executives were Republican donors, people familiar with the matter said, and raised concerns directly to Washington. The lobbying appeared to have little effect, as US officials leveraged the economic pressure as an unequivocal counter to China's rare-earth actions in the second round of bilateral talks. They were maintained in the immediate aftermath as US officials continued to press for quicker action on the matter. Shortly before the July 4th holiday, US Commerce officials notified major ethane producers the export controls had been rescinded. 'I am informing you that effective as of the date of this letter, the license requirements set forth in my June 1, 2025 and June 25, 2025 letters are hereby rescinded,' a top export administration official wrote in the notification letter sent July 2 to Enterprise Products Partners. Over the last several weeks, Trump clinched a rolling series of bilateral trade frameworks that have included explicit commitments to shore up US supply chain vulnerabilities and implicit agreements to shift production, supply chains and security assets away from Chinese influence. New penalties for 'transshipped' products – an additional 40% tariff on goods shipped from a high-tariff country to a lower tariff country prior to export to the US – have been put into place, with new regulations expanding their reach forthcoming. At the same time, China has grown more aggressive in pushing against regional players in territorial disputes as US officials have used Trump's brute-force tariff approach to build a nascent but deeply consequential new alignment that breaks from the global trading system the president has long pilloried. Even student visas for Chinese citizens have been leveraged for effect. Treasury Secretary Scott Bessent, Trump's lead negotiator in three rounds of trade talks with China, has told associates it's the equivalent of 'three-dimensional chess.' Bessent insists that the US now holds a clear advantage – a message he said he delivered directly to his Chinese counterparts last month during two days of negotiations in Stockholm, Sweden. 'I just said the world's with us now,' 'It looked in April, May like that the US was alone against the world,' Bessent said during a policy event with Breitbart news shortly after he returned from the third round of US-China trade talks. 'Now that we've done deals with our top trading partners, we have a lot more leverage.' The near-term goal, US officials say, is to utilize any leverage to accomplish Trump's overarching desire to secure a major trade deal with Chinese Leader Xi Jinping. Trump's trade agreements sharply diverge from any traditional 'trade deal' format and each remain devoid of the granular detail that historically takes years for negotiators to hammer out. There are significant questions about how much of what Trump has announced will actually become reality, according to diplomats and former trade officials, though administration officials say the threat of future tariffs serve as the ultimate dispute mechanism. But the decidedly Trumpian bespoke nature of the deals includes a series of significant commitments from countries like Japan and South Korea to provide hundreds of billions of dollars to the US for the explicit purpose of shoring up US supply chain vulnerabilities. Bessent, in an interview on Fox Business this week, described the unprecedented arrangement designed to use foreign capital for investments entirely subject to Trump's discretion as a way 'other countries are, in essence, providing us with a sovereign wealth fund.' 'We will be able to direct them as we re-shore these critical industries,' Bessent said. 'We are trying to de-risk the US economy.' Trump and his advisers have framed the size and structure of the commitments as a way for foreign partners to 'pay down' or 'buy out' of a higher tariff rate in bilateral talks. That option, however, is not on the table for Xi or his negotiators. 'The funds from the buyout are going to go to critical industries that we need to reshore,' Bessent said. 'And a lot of those need to be reshored away from China.' Still, the Trump's version of trade deals have created friction with the very partners viewed as a necessity in any new trade alliance to counter China's economic strength. Japanese officials have raised concerns with the way the structure and delivery have been framed by US officials, which in turn created domestic backlash for the critical Indo Pacific ally. 'The other party is not a normal person,' Japanese Prime Minister Shigeru Ishiba said of Trump earlier this month to members of parliament demanding details of the US-Japan agreement. 'In negotiations like this, implementation is far more difficult than reaching an agreement.' Ishiba's comment wasn't framed as a criticism, but instead a candid expression of reality. 'It's a feature, not a bug,' a senior administration official said of how the administration took the comments. 'He's stating a fact, and one that we use to our advantage.' But the rapidly evolving tools deployed across economic, security and diplomatic actions – since Trump initially triggered a de facto trade embargo between the two nations – has laid bare a far more existential reality: Trump needs China. The bilateral agreement to extend the temporary trade war truce this week came after a third round of negotiations framed by both sides as positive. Trump's advisers regularly cite his 'excellent' personal relationship with Xi and continue to weigh the possibility of a face-to-face meeting in China later this year. But, to accomplish that peace, Trump gave the green light for US companies to sell less-advanced artificial intelligence chips to China, drawing the ire of hawks within his own party. 'If he doesn't reverse this decision, it may be remembered as the moment when America surrendered the technological advantage needed to bring manufacturing home and keep our nation secure,' Matt Pottinger, Trump's first term deputy national security adviser, wrote this week with Liza Tobin, who served as China director on the National Security Council in during Trump's first term and under former President Joe Biden. Trump officials counter that the chips represent lower-tier technology and the highest end of the US chip stack isn't will remain blocked. More critically, they say, Chinese access to the chips would anchor the rapidly developing global AI race to US technology at the same time Trump, in a series of Oval Office meetings and calls over the last several weeks the CEOs of the largest tech firms in the world, has offered exemptions from forthcoming semiconductor tariffs in exchange for commitments to manufacture in the US. 'His objective is to get semiconductor manufacturing done here of our best technology and that way we can control it the best,' Commerce Secretary Howard Lutnick said last week. 'That's the strategy.'
