Business

What Does Brexit Mean For Progress?

By Tamara Cincik
17.10.18

Brexit is the defining issue for this generation within the UK. Whether you voted Remain or Leave in the EU Referendum in 2016, for the fashion industry (which voted 96% Remain; is worth more than £29.7 billion to the UK economy; and depends upon a globally-interconnected international supply chain), it raises significant questions - from deregulation of labour markets, to trading and employment rights.

Tamara Cincik, CEO and Founder of Fashion Roundtable, which launched last November to create a much-needed conversation between fashion, business, consumers and policy leaders, points out the main risk factors to consider - Deal or No Deal:

 

COST

Ethical fashion costs more to produce than cheap, fast fashion - any sustainable fashion brand by default pays living wages across its supply chains. The falling pound has already impacted profit margins and since most materials are paid for in Euros, brands are already paying up to a third more than they were two-and-a-half years ago for their fabrics.

COMPETITION

As costs increase within an insecure (at least in the immediate turn) UK economy, firms promoting sustainability will struggle to compete with those that source cheaper products. For the consumer, the compunction to buy sustainable or organic products will be set against a new cost of living.

CREDIBILITY

The economic viability of sustainable and ethical businesses (from fashion, food and interiors to technology, beauty and agriculture) depends upon retailers’ ability to advertise certain recognised accreditations. Exclusion from EU-wide accreditation opportunities poses significant risk to business development.

BUSINESS GROWTH

If the UK moves away from European policy, we run the risk of losing potential Made In Britain customers in Europe, thereby fundamentally limiting the growth of UK fashion companies into new EU sales markets. We also lose the value of being the soft launch location for global brands wanting to enter the European market; and risk a potential talent drain of fashion creatives looking to live inside the EU for work and access to markets.

REGULATION

While the terms of Brexit remain unclear, UK businesses won’t necessarily be forced to comply with REACH Regulation; or to continue to work with the European Chemical Agency, which calls for the progressive substitution of the most dangerous chemicals (referred to as "substances of very high concern") when suitable alternatives have been identified. Collaboration on schemes such as WRAP/Rebus programme should remain crucial to ensure long term sustainable business.

PLASTIC

Brussels plans to ban a range of plastic items, including single-use cutlery, plates and straws, by 2021 with new rules that mark increasingly ambitious efforts by the EU to reduce marine pollution; to create a market for recycled plastics and spur investment in new types of packaging. The commission estimates that Europe generates 25.8 million tonnes of plastic waste annually, of which less than 30% is recycled, 31% ends up in landfills and 39% is incinerated. The UK, which is currently not on track to meet the 2020 EU targets, needs to be on top of of these initiatives.

Read about hoe the EU Parliament has voted to ban single-use plastics by 2021

VOICE

Whatever the terms eventually agreed upon, the UK's role in EU-led policy will diminish, limiting the ability of UK organisations and businesses to effectively lobby for the next generation’s sustainability strategy. As well as disincentivising UK firms innovating in the sustainability space, this will give European brands the advantage in an industry in which the UK is currently a market leader.

FOOTPRINT

If Europe becomes an unviable trade partner, the added pollution embedded in extended transport of goods to territories further away becomes an issue. In an industry that is hyper aware of the devastating issues of microfibres and pollution, there are concerns about increased supply chain risks (in terms of manufacturing, materials and waste management),from sourcing from new markets.

Fashion Roundtable recommends that all fashion businesses – including EU firms wishing to export to the UK - attain Authorised Economic Operator (AEO) status to simplify customs procedures. If the EU and UK go to No Deal, there will be delays to the transport of goods to and from the UK. Therefore we also recommend that any brand using components from other countries (given that up to 75% of any Made in Britain item involves a global supply chains), looks at where the transportation of international components is carried to first, en route to the UK (frequently Holland) - and considers organising direct shipments (which will obviously incur further cost).

COUNTERFEITING

The level of protection given to designers by the EU's unregistered community design right (UCD) is significantly higher than that of the UK equivalent. Without protection, designers will have to either run the risk of copying throughout the EU following disclosure (after a catwalk show, for example), or simply decide to not show in London first, which could have dire consequences for London Fashion Week and all of the UK fashion and trade shows.

COMMUNICATION

Maintaining access to European programmes, such as Horizon 2020, Erasmus, and research projects will be key to our inclusion in vital work being done on the circular economy, climate action, environment, resource efficiency and sustainable access to critical raw materials. At least 35% of Horizon 2020's total budget is expected to address climate action, while at least 60% is expected to involve sustainable development.

TRANSPARENCY

Baroness Lola Young's Amendment to Section 54 to the Modern Slavery Act 2015 is currently waiting for its second reading in the House of Lords to make further provision for transparency in supply chains in respect of slavery and human trafficking.

With an estimated 40 million people across the world trapped in modern slavery, we need to ensure we’re doing all we can to keep the UK’s own supply chain clean and ethical: particularly since Brexit might mean many brands will decide to manufacture more of their samples or products in the UK. The amendment will change the statement opt in for businesses and public bodies, to ratify that they need to include one on slavery and human trafficking in their annual report and accounts; and to require contracting authorities to exclude from procurement procedures economic operators who have not provided such a statement; and for connected purposes.

 

What Does Brexit Mean For Progress?