How to Create an Impact-Free Collection | Nicolaj Reffstrup + Stine Kirstein Junge | CFS+

Welcome everyone. It's kind of weird hosting a conversation like this on Zoom, but I still haven't quite gotten used to it. Anyway, my name is Nicolaj Reffstrup, I'm the founder of Ganni, a Copenhagen-based contemporary fashion label, and I'm here with Stina Kjærsteingaard, who heads up the SDG Accelerator program at the UNDP. Welcome to you, Stina. And as you guys probably know, it's a no-moderator conversation, so it's a new format for all of us. So please bear with us if we make mistakes; there's no one to save us here, and I cannot even kick Stina under the table if things go wrong, since we're not in the same office. A good thing though is that there's no one to stop us if we go over time. Anyway, we're planning for our chat to go on for 20 minutes, after which hopefully we should have around 10 minutes for questions and comments. So please submit questions or comments in the comment section during the session, and then one of our colleagues will pick a few questions for us to answer by the end. Real quick, to provide a bit of context, I'll just run you through a presentation of the case, and I'm actually reading this from my notes. So, Ganni and the UNDP set out to create an impact-free collection—I'll get back to what that means. Fast-forwarding, the mapping of Ganni's supply chain and fabric choices in order to make radical change. We created the Ganni Lab project, a virtual team with team members from literally all parts of our organization that ran as a cross-departmental project for 12 months. All right, okay, let's get started. Stina, could you for start explaining to us what the SDG Accelerator program is and how businesses can benefit from structuring their responsibility work around their SDGs?

Well, as we all know, supply chains are historically long and complex and super opaque. I mean, production takes place across multiple countries, and only few people really understand the true impact of that production, and that goes for us as well. So for a start, it was super important for us to set up this cross-departmental team that would map out and at least try to understand our own processes. But at the same time, we also wanted to expand our sense of ownership and educate everyone across departments. So it's about making our responsibility work an inherent part of how we do business. It has to be something you default to, not just a nice add-on or something that sits in a single department. That kind of reminds me of how it was 20 years ago; back then you had these huge IT departments that would create and lead all tech projects and you would go to them for help, but today digitization has become an inherent part of all departments—it's imminent in what you do. So you wouldn't do anything in marketing or logistics or finance without considering how to digitize that process or problem. So we basically were trying to make the same thing happen for our responsibility work, if that makes sense.

Oh, I wish you hadn't asked that question. No, just kidding; of course, it's a huge problem, and especially when you, as we do, acknowledge that you are a fashion brand. Like, we create collections that don't just satisfy a functional need like a basic piece of garment; what we do is also kind of cater for people's needs for aesthetically pleasing designs—it's raw consumption, basically. So that's why, at least hypothetically, we set out to create a fashion collection that left very little impact. It's easier with basics, but only if we manage to also create a fashion collection that does no harm or very little harm can we achieve full impact. We have a long way to go, and obviously to get there you need to also consider how your product is consumed as you're talking about here and obviously where it ends up. So at Ganni, we're looking at four different strategies for that part of our business. We have a take-back scheme that's already been implemented in most of our stores where customers can return clothes that we then treat responsibly. We have launched a second-hand rental program that we are still tweaking to figure out what exactly the customer needs. We have a designing for circularity program going on, and we are exploring repair guarantee programs and other programs to ensure that we extend the lifetime of a product and to optimize the ways that we can recycle that product in the end. And then finally, obviously, we're also exploring e-commerce solutions where Ganni will either own the full resale process or facilitate a peer-to-peer transaction. So as I said, we still have a long way to go, but at least it shows that there are commercially viable solutions out there, which is super important because in some of these cases it seems that the consumer is interested in engaging and actually paying for this, and especially re-commerce—they might just be there for a bargain on price, but that's totally fine with us because we know that if you pass on a dress to be worn by another person for another nine months, then the impact of that garment is reduced by 30%. So whatever reason the consumer might have to buy that, it's cool with us; that's tangible change.

So anyway, now we talked about Ganni, let's get back to the accelerator program. So the UNDP created the SDG Accelerator program as an accelerator program to create change, basically. So could you describe for us what goes into that process and why we would talk about a sprint process, and especially or most importantly, maybe, how do you ensure that it's not just words?

Well, I totally recognize what you're talking about. Like, a lot of the gain from a project like this you get from just putting objectives out there and being transparent about them too, and through that, you kind of commit to a process. But if I kind of take one step back, the idea of the Ganni Lab came partly from a Swedish company that produces green energy, so Vattenfall set out to build a carbon-neutral baby crib, which is a pretty random product for them, but they just used this to serve as a case for them. So they went to extremes to get there and in the end found that the production cost of that baby crib would be around 28,000 or something like that, but it would be carbon-neutral. So partly inspired by that, we too wanted to create an impact-neutral fashion collection at whatever cost—at least hypothetically. The bad thing is, we didn't succeed in that, unfortunately, but I don't think at the moment it's possible at all. A good thing though is that we learned a lot through the process and found that most of those learnings kind of transitioned into our day-to-day business right away. It was kind of seamless, actually, and probably because we had so many representatives from across the organization. So we focused on cotton, viscose, and polyester as these are our biggest volume fabrics, and then we decided to only use market-ready fabrics as they could be scaled right away. So as a result, we went from just 4% responsible fabrics when we started out to close to 73% in our latest Spring/Summer 2021 collection, which is just over a 12-month process. And in the process, we also prioritized traceability, so we reached 75% traceability—which is kind of a weird concept to me at least—but that means that we got to the raw material stage. However, it was difficult getting further than that, especially working with recycled materials; it can be tough to verify and track. We worked with Quantis, which is a life cycle assessment provider; they measured and validated our carbon footprint and all the data and the improvements we made. So it's important when you engage with a product like this that you make yourself aware that this is gonna cost you money. I mean, there's no free ride or free lunch, and you cannot pass the cost on to the consumer; she's not ready to pay a premium yet. So for instance, we found that responsible fabrics are typically 8 to 10% more expensive than conventional ones, but sometimes up to three times the cost of a conventional fabric if you want to use very innovative, super interesting new materials. Otherwise, we also spent a lot of money on workshops, courses, software tools, team certifications, consultants, etc. We worked directly with 11 different suppliers, and we probably spent more than 150,000 euros just in direct expenses, and add to that salaries and a bit of capex. So it's not a free ride. Anyway, we're kind of running out of time, so I'll jump to my last question for you, and that's about SMEs. So why did the UNDP decide to engage in the accelerator program with the SMEs and not the big guys?

I love that, Stina, that's super cool. I guess that just to encourage everyone out there, guys, if you'd like the UN Accelerator program to come to your country, please reach out to Stina directly and explain to her why she should prioritize your country right away. It's super cool, and I think it would be extremely helpful for a lot of small and mid-sized companies to get started on the process—getting the blue stamp from the UN but also access to some of the resources you guys have. Okay, we're slowly running out of time, but before we jump to a few of the questions we've had, we should probably just sum up the key takeaways from our conversation. You still have time to submit more questions or comments if you want to, so please shoot. Stina, will you have a go at the first one?

Yeah, I see. I'm afraid we have a little bit of a problem with your sound sometimes, so I'll try to answer it. So as mentioned, I think it's extremely important to kind of gather all stakeholders in the process—internal stakeholders. So we have representatives from literally all departments. However, having said that, I think production sourcing still bears the bulk of the grind along with the responsibility team, obviously, because there's a lot of—firstly, because more than 80% of our carbon footprint, for instance, is derived from the actual product, like two-thirds directly from the fabric. So there's a lot of work that goes on to working directly with your suppliers and identifying fabrics that make sense. There's also a lot of work that goes into mapping and validating the data, and so obviously also the responsibility department has a huge job ahead of them. But having said that, in a fashion company, obviously everything starts with the design team, so if they aren't trained at designing for circularity and if they aren't on board very early on in the process, you kind of get nowhere. So they need to be extremely involved in the process. Also, so my key takeaway would be that those three teams would bear the bulk of the workload here.

All right, we have the five key takeaways here on the slide that Stina just shared. Would you go through the first one, then?

Got it. And key takeaway number two is, from my point of view, thoroughly map your supply chain to truly understand where you have the biggest challenges but also where you can make the biggest impact for the least investment, because we're busy—we need to go for the low-hanging fruits, all of us. And on top of that, create virtual teams that work across departments to make sure that knowledge diffuses throughout the entire organization seamlessly.

And then key takeaway number four, which is also close to my heart: you need to be willing to invest because companies that dive into sustainability need to pay. Don't wait for the consumer to pick up the tab.

Do we have time for more questions? Or yeah, we should have time for a couple more questions. So lovely question on where can we see the results of your product or the product in your current collections. And as I mentioned in the beginning, we actually wanted to create one collection that was impact-free; however, it turned out that a lot of the learnings from the process kind of diffused into the rest of the organization and became part of our day-to-day operation quite fast, so it kind of didn't make sense in the end. So but what you can see is that, for instance, we just launched our Softcore collection, which is a jersey leisurewear collection—it's a new category for us—and the fabric sourcing for this project came directly from Ganni Lab, from the Canada project. It's made from 100% recycled materials, as I mentioned before. We reached 75% traceability across this collection, so it was just great to see that we could take the knowledge that we gained over the course of the Ganni Lab project or the accelerator program, extract it from that process, and implement it directly in the way we do business. So that was one example. And overall, as I mentioned, currently we are at 75% of our collection that's—or the fabrics we use that are certified, either organic or recycled. So that's one example.

Yeah, I will put—yeah, I don't know if I could share with everybody here. I don't think I can. All right, we have time for one more question, and I think the most important one is—or it's a combination of two questions: what is an impact-free collection? Is it actually achievable, or was it more of a marketing statement? So impact-free, I think it's up to you to kind of define what it is, what it means for you. So in our case, as I mentioned or as we talked about earlier on, we prioritized three SDGs: number five, gender equality; number 12, which is responsible production and consumption; and number 13, which is climate action. So when we define what impact-free means to us, we would kind of center those objectives around those three SDGs. However, impact-free was an internal working title for us—it was more of a hypothesis that we could work towards. It was a big ambition that we all knew we probably wouldn't achieve. So no, it was definitely not a marketing statement; it was never meant to be mentioned externally. So I hope that answers that question, and no, I'm afraid not at the moment for fashion products, I don't think it's actually achievable. It might be for a basic product, like a basic tee, but for fashion products, we still got quite a way to go. But there's a lot of super innovative products popping up at the moment from circular systems, or Avenue, and like please follow all of those super dynamic startups that are developing progressive new materials. The whole new material science is a super exciting field at the moment.

All right, time's up. Although we don't have a moderator, we still need to get going. Thank you so much for participating, Stina, and thank you to Copenhagen Fashion Summit for hosting us. It's been a real pleasure, and please, guys out there, feel free to reach out to Stina or me if you have any questions. That's all, thanks guys for today. Hi.