During a recent talk held during the last Copenhagen Fashion Summit under the topic “Building resilient futures,” they hosted a round table speaking about Made In Italy and the recent challenges the fashion and luxury industry is facing.
Participating were Luca Sburlati, president, Confindustria Moda, and Enrico Giovannini, Professor, University of Tor Vergata, Rome, economist and former Minister of Infrastructures while Mario Draghi presided the Italian government.
The talk opened with a memory brought on the table by the talk’s moderator, Sarah Kent, The Business of Fashion.
“A few years ago, I was sitting in this audience listening to LVMH’s Antoine Arnault talk about what his holding was doing in this space, and one of the things he said that really struck me was his statement saying that luxury is sustainable by nature,” recalled Kent.
“Now, the truth of that has been really tested over the last few years, in large part thanks to a series of cases that have been bought in Italy, linking some of the industry’s biggest brands to manufacturers that have been operating illegally using illegal labor,” she pointed out remembering how some recent cases have shaken the industry and tested Italy’s reputation in craft and manufacturing.
Sburlati represents many of Italy’s luxury manufacturers more than half of the world’s luxury goods are made in Italy and as Confindustria Moda is the national association of Italian fashion, textile and accessory companies that counts for more than 40,000 entrepreneurs, half a million people working under a national contract.
“We are talking about an ecosystem, and our ecosystem is not just closed in Italy, but it’s spread all over Europe with more than 40,000 entrepreneurs, half a million people working in and represented by national contracts that basically give the right living wages to the companies we represent. Despite this there a few companies that are representing and about one or two percent don’t follow the right way of working,” he said.
He also underlined how the ecosystem is not closed by the borders. For these reasons, a few years ago, under Mario Draghi’s leading and Giovannini’s working as minister they asked to change the law system to change things to avoid these unfair practices.
“We asked to have a common auditing system–altogether brands and supply chain. We ask not to pay managers with MBOs just connected with on how they close down or forced to have prices and cost just going down year by year. We asked to have long term agreements all around. So we have to think it is coming out also not just by something that grew up in a, let me say, dumping phase,” he explained referring to system that has created these challenges where managers were being paid purely based on the prices they were getting, not how they source. A
Giovannini also participated in the talk as a founder of the Italian Alliance for Sustainable Development, which is celebrates now ten years and brings together more than 300 organizations, including Confindustria, business associations and trade unions, many others to push the 2030 agenda on sustainable development.
“In 2016, when we were born, we promoted the idea of changing the constitution, which happened in 2022 during the Draghi’s government that I was part of. Now the constitution says, among other things, that the economic activity cannot be run against health and environment. This is extremely important because authorities are called to defend the rights of the present and future generations. That’s how we change the Constitution,” he added.
This is important as in many cases, companies just outsource the costs on the society, on the environment, instead of investing to not only clean up their production processes, but also to take care of environmental aspects–another aspect they intervened on changing the Italian Constitution–and the social impact that comes with it.
“Such a change is important because the companies all over the world, especially in Europe, but not only, are asked to take responsibility for sustainability 360 degrees, not only the environmental side,” added Giovannini.
Similarly, in the European legislation, the CSRD, the Corporate Responsibility Directive, is focused on pushing companies in this direction. And the good piece of news is that Iaccoridng to recent surveys carried ahead among Italian companies is that those who invested in sustainability, improved quite dramatically their productivity, their competitiveness, and also exports. “Just to give you an example, the companies that have a high ESG profile over the period 2017-2024 increased their value added by 65%, while those with low ESG profile only 55%,” he pointed out.
The result is that the ecosystem is changing itself, according to Sburlati, despite the fact that among companies closing down today there are other factors. Though what counts I acting according to a long-term plan, on moving and having a proactive plan.
“It was exactly something that we are addressing together with all the associations and building up a tenuous strategic industrial plan to save this industry which is representing the second most important industry for the export for our country, and not just for our country, but also for other European countries, including France, including Germany for textile or Spain,” he added.
For this he believes it’s important to act according to long-term action, including technologies and artificial intelligence applied to prototyping, to fiber and fabric phases. It’s still one of the few complete supply chain still alive in Europe and they want to defend it.
Among virtuous Italian examples acting according this mentality he referred to Slow Fiber, an independent association of Italian manufacturers that act similarly to the approach and startegy carried ahead by the Slow Food association.
“We have to use the national contract. it is connected with the fact that obviously everybody must have the right salary. And the salary is by the national contract. It’s winning, you see. Then if you have practices that are not legal, this must be something that absolutely unacceptable,” added Sburlati.
“And in this case, this is a role along the supply chain with us, with company that put together small SMEs, but also of the brand. So working together is the receipt. And I think this is exactly what is up,”he summed up.
In the meantime they also pointed out the importance to focus on auditing and monitoring companies behavior. For this the Italian Fashion Chamber (Camera Nazionale della Moda Italiana-CNMI) has started a partnership with the French Fashion Chamber (La Fédération de la Haute Couture et de la Mode (FHCM) to have a common system auditing that must be addressed to everybody at the same level in the same way, to support the small companies, not having bureaucratic stuff and looking the right repositories.
“It’s absolutely essential to collaborate for the ecosystem to survive. It will be voluntary, but once we will have a law that is coming up, probably it will be something more than voluntary. Best practices make economics, and best practices linked to technology that give us sustainability effect will be the future of our European ecosystem,” he added.
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