Ganni's Ditte and Nicolaj Reffstrup on sustainability and building a brand | Vogue Codes Australia

Of course, thank you for having us.

Well, I think it was not so much whether I knew that it could become a global brand, it was just kind of a precondition for me joining the project back then. Because I have a background in tech, and looking from that side into the fashion world, I realized that a lot of, in particular, Scandinavian brands didn't really make it outside of Scandinavia. But you have an opportunity of say five to ten years where you can kind of allow yourself to be the new kid on the block, the new hot brand. But if you don't manage to build a proper business behind it throughout that time frame, then you risk kind of diluting yourself as a business and as a brand. So it was a precondition for me for joining Project Ganni that we would insist on becoming an international brand.

But it's also, it's one thing kind of having this idea and ambition or insisting that you want to be an international brand, and then it's a completely different thing than exercising that thought and turning it into practice. And there's like, you could have a guiding vision, but it's all in the daily grind, right? It's the decisions you make on an everyday basis that ultimately ends up kind of turning you into a global brand.

Well, I mean, it's about, I've been kind of involved with the climate change agenda for 25 years for all reasons, and kind of ending up in the fashion industry was somewhat of a contradiction, right? So I've had to come to terms with that, and I've been kind of sharing my concerns with Ditte throughout the years, so it's been an ongoing conversation between us. Having said that, though, I guess a little bit like with red meat, I didn't realize that red meat was a bad thing until, I don't know, five, ten years ago from a climate perspective, and I reduced my consumption of red meat. Same thing with fashion, I was not aware that the fashion industry was worse off than any other industry when we embarked on Project Ganni. But when we became aware that from a climate perspective it's not really a good thing, we had these endless conversations internally about whether it made sense to put another fashion brand out there. And we've been going back and forth over that over the years, but ultimately ended up agreeing that as long as we do better than most other alternatives out there, we can allow ourselves to continue to do fashion. We just need to do it responsibly. However, that also involves acknowledging that fashion is raw consumption. We don't need more garments out there. So talking about sustainability or circularity for that matter is very, very sensitive. So that's why we coined the term responsibility. And I specifically remember back in 2015, 2016 when we were kind of talking about this concept, then a couple of other brands, Ace & Tate, Noah the streetwear brand from New York, kind of launched similar thoughts, I think that was in 2017, and I read the newsletter from Ace & Tate founder Marc. And they had kind of the same thought. So we realized that there was probably some kind of zeitgeist going on, and we decided to embrace that concept and let that be the guiding principle for how we go about working with sustainability. The sensitive bit still though is that it can't be an excuse, it can't be like paying indulgence. You can only allow yourself to talk about responsibility if you are persistent in doing better every day. It cannot be an excuse.

So like practically speaking, from a day-to-day perspective, we go about it like probably any other strategy process. So you dream up scenarios that you'd like to achieve like five or ten years down the road, and then you reality check what your dreams are. I mean, does it literally make sense? So specifically, we apply a concept called scenario-based thinking, where we kind of dream up how we'd like to see Ganni in five years down the road, like with our 50% carbon reduction for instance, and then we backtrack to today and kind of break it down into tangible targets or KPIs, and investigate whether that makes sense. And then you somewhat strike an internal compromise between dreams and practicalities and figure out what you think you can achieve by still kind of pushing the limits for what the practicalities of today will tell you are your limits. So that's kind of a compromise. I guess that's very dangerous, right? We're so driven by consensus, so even internally in our company it's all consensus driven.

Yeah, so I can provide a bit of context and then Ditte can tell more about how we work with that on a day-to-day basis. So I guess it's all derived from the thought of trying to reduce your carbon footprint. So when you go about mapping out your carbon footprint, which we did for the first time in 2016, an exercise that took place in 2017 looking back at 2016, you realize that the predominant part of your carbon footprint is derived from the actual product and the actual fabric going into that product. So you realize that in order to reduce your carbon footprint, you need to kind of use responsible alternatives or alternative fabrics that are better than the conventional version, ideally something that's recycled because it's already out there, it's been produced by someone else, or innovative new materials that have a significantly lower carbon footprint. And those are lab-grown sometimes, they are definitely kind of developed and put out there by startups, new companies that are typically fueled by venture capital money and it's very early days of them trying to put a commercially viable product in the market. So there's a huge amount of unknown factors. And as a fashion brand, you rarely have R&D inside, so you rely on an ecosystem of external players that will bring those products forward to the market. And so that brings me to Fabrics for the Future, it's a virtual team internally in Ganni where we work with these innovative new startups on kind of making sure that there's a product-market fit between what they are doing and what we need. And then we help them kind of test and scale up their product and react as a launch pad or marketing platform for them. But ultimately what we want to do with those materials is kind of bring them to the market in a way or shape or form where it's commercially viable for others to kind of tap into that so we can reach scale. Currently we're constantly looking at around 30 different innovative new materials that we, as a test, let's say, test along a range of criteria like look and feel, aesthetics, performance, durability, permeability, etc. And also scale, cost, stuff like that. And then ultimately we intend to enter offtake agreements to kind of help them bring the product to market.

So generally speaking, people appreciate the effort and buy into the idea. We've also had some somewhat weird hiccups with customers because leather is perceived as a luxury good, although it's actually a commodity, it's abundant out there unless we're talking of exotic leathers. It goes into literally a lot of products and people get that, because they still have this perception that it's luxury, but leather alternatives aren't necessarily, so there's still a little bit of reluctance. Although you can't necessarily identify a difference between a lab-grown leather or a real leather, there's still a little bit of resistance because you want the leather because it's more luxurious in your perception. So we've had some funny reactions like that that I hadn't expected, but I understand the mechanism. But overall, people are supporting the idea. Bear in mind though that there's not a consumer out there that wants to pay a premium for sustainably or responsibly sourced product, and I totally understand that. It's kind of like our moral obligation to bring that option to the end consumer. It has to be identical to a conventionally sourced product, because otherwise we're never going to get these responsibility efforts to scale.

So the Carbon Squad is one of many virtual teams that operate across the entire organization. It's a departmental, it's a team that kind of drives us towards our carbon target, which is a 50% reduction in absolute terms of our carbon footprint by 2027 compared to 2020 or 2021. It's because we kind of consider anything that pertains to responsibility a change management project. So you need to ensure that it's kind of anchored throughout the organization, that everybody embraces it and kind of adopts it and makes it part of that default mode of operation. What you'd like to avoid is the situation where the sustainability department or responsibility department dictates KPIs or ambitions that we need to achieve and it's not anchored with all the other departments. I usually compare that to being in tech in the late 90s when the internet emerged, and it would end up with the marketing department because we looked at it as some kind of sales tool. And then fast forward to today where it's abundant, it's everywhere, we all kind of use the internet and software tools and we think digitalization before anything else. And you'd want the same thing to happen with the responsibility agenda. It has to be baked into everything you do. And the Carbon Squad is one example of that, it's kind of trying to make that knowledge diffuse throughout the organization. Also because it's so important to talk about sustainability in a more soft way, to engage people, and so it's not just something the management is talking about and something that would just go over your head.

So we work with responsibility along two axes, there's awareness and impact. It's because some of the things that have the biggest impact can be quite boring. Kind of mapping out your entire supply chain throughout to tier four is a full-time job for someone, but it's not really relevant for a lot of people. So it's high on impact but low on awareness, or low on engagement. Whereas when we grow oyster mushrooms in the coffee grounds from our espresso machine in the container and it's a product display in the Copenhagen store, everybody can kind of see it and engage with it, and we harvest them every Thursday and we literally eat them, and it's Instagram-friendly and all of that. But it has like close to zero impact, it's more an educational effort that ensures people can relate to our responsibility projects. So we always have that dynamic going on.

I mean, from my perspective, unless you want to work specifically in the responsibility department, I'd much rather see people with a variation of backgrounds, like from finance to production to sourcing to logistics to whatever, like specialize in whatever they do and then embrace the sustainability agenda. Because we need it kind of baked into everything we do. And then there are obviously expert roles within responsibility where you need to have a certain area of expertise, but other than that I'd rather see people with a sense of purpose and people that are willing to embrace the agenda no matter what background they have.

Thank you.