Emanuel Chirico

Former Chairman & Chief Executive Officer, PVH CORP

The Fashion Pact: 1-Year Later | Chirico, Pavlovsky, Syngal, Polman — Rajpal | CFS+

🎥 Sep 01, 2020 📺 Global Fashion Agenda ⏱ 45m 👁 5709 views

The Fashion Pact 1-year later. The CEO-led coalition representing one-third of the fashion industry worldwide, shares a first update around its three pillars: climate, biodiversity and oceans. Watch the conversation between Manny Chirico - PVH Corp, Bruno Pavlovsky - Chanel, Sonia Syngal - GAP, Paul Polman - IMAGINE, moderated by Monita Rajpal - Citrine Room. JOIN THE CONVERSATION AT #CPHFSleaders • Subscribe to learn more: httphttp://bit.ly/GFASubscriber • Watch our latest videos: http://bit.ly/GFAPlaylist JOIN OUR GLOBAL COMMUNITY • Instagram: http://bit.ly/GlobalFashionAgendaInst... •...

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About Emanuel Chirico

Emanuel Chirico, former chairman and CEO of PVH, discussed the company's response to the coronavirus pandemic and social justice issues in a June 2020 CNBC interview. He described the U.S. as being "ripped apart by systemic racism" and said PVH needed to improve in recruiting, training, and representation at leadership levels, stating the company would set "meaningful targets" within three months. Chirico also addressed inventory challenges, noting that 2020 would be "a mess" and that the company aimed to manage cash and inventory to be competitive in 2021. He mentioned that PVH had $1.8 billion in liquidity but had implemented furloughs and salary reductions due to shareholder pain. In earlier appearances, Chirico commented on trade policy and business performance. In December 2019, he said tariffs on apparel would result in higher costs for consumers and criticized the uncertainty of U.S.-China trade policy, noting that PVH had reduced its China sourcing for the U.S. from 35-40% to 10-15% over five years. In 2018, he described the business as the strongest he had seen in 25 years, with strong online growth and robust European performance. At a 2019 Concordia College event, Chirico said profitability was necessary for sustainability and that "made in America" was not practical for the apparel industry, arguing the U.S. should compete in high-tech robotics rather than labor-intensive garment production.

Source: AI-verified profile updated from Emanuel Chirico's recent appearances. Browse all interviews →

Transcript (76 segments)

✨ AI-enhanced transcript with speaker attribution

Juanita Rajpal0:28

Hello everyone and welcome to this panel discussion. It is being live streamed. I'm Juanita Rajpal. This conversation is also being recorded and you'll be able to enjoy it at a time that is convenient for you. Please also do join us in this conversation by sending us your questions, which we will hopefully be able to read out and engage our panelists in this conversation as well. But for now, again, I'm Juanita Rajpal. I welcome you all to this live stream.

On August 26, 2019, heads of state attending the G7 summit in Biarritz, France, heard a call to action. It was from the leaders of a major global industry announcing a promise they made, a pact to work together towards concrete and specific goals when it comes to reducing the impact that their industry was having on our planet. They made a promise to do what they could to reduce the harm that was being done to our planet. The areas they focused on was climate change, biodiversity, and oceans.

But in 2019, the world was a very different place. 2020 has seen the world shut down. Now, for some it was a blessing in disguise. It was time to be still, reflect, and to stop. And we saw the impact of that stillness on our planet, the world around us, and the environment, with clear skies, with animals emerging out into the open, sensing this peace that perhaps had been missing throughout the age of the Anthropocene.

But for many others, 2020 has been a curse, losing livelihoods, losing the loves of their lives in a battle no one was prepared for. Over a million people to date have so far died from COVID-related illnesses around the world, and that number continues to rise every day. What has become blatantly clear in this year is that who we are, what we do, how we act, where we live, how we live, how we earn, how we treat each other and the planet, it's all interconnected.

So as we look at this progress report from the Fashion Pact, we do so understanding that 2020 is a game changer because it has to be. Our panel today consists of four esteemed leaders who are speaking not as a voice for their companies, but they are representing the 62 signatories who are part of this Fashion Pact, a collective voice by CEOs for CEOs. Before I introduce you to them officially and welcome them officially, take a look at this video.

Unknown3:31

The fashion industry is one of the most polluting industries in the world. There has been a lot of talk, but I think now is the time to take into account really the impact and the need for sustainability in our society today.

We join the Fashion Pact as it is our strong belief that collective action is much more powerful than the action of each single individually. That's why in a team sport you achieve much better results.

The Fashion Pact is breaking down barriers of competition in bringing together companies, distributors, and suppliers to work together toward clear common goals.

CEO to CEO, principles to principles, to take tough decisions and fast decisions to make sure things are moving forward more rapidly. It has been able to gather industry leaders to actually make fashion differently. The beneficiaries are therefore all living beings and the planet itself, with maximum benefit to each.

I'd say solidarity, cooperation, impact, essential focus, the power of all action. It is really now time for action together. Let's make every act count.

Juanita Rajpal5:08

Joining me today is Sonia Syngal, Chief Executive Officer of Gap Inc.; Manny Chirico, Chairman and CEO of PVH Corp., owner of iconic brands such as Tommy Hilfiger and Calvin Klein; Bruno Pavlovsky, the President of Chanel SAS and President of Chanel Fashion; and Paul Polman, the Co-founder and Chair of Imagine, a benefit organization and foundation. It's a new type of business collaboration working with CEOs to help business leaders create the world we all want. I'd like to welcome all of you today.

Paul, I'd like to begin with you. You have said before that what is really needed today is courageous business leaders taking action. That couldn't ring truer today. Since the creation of the Fashion Pact, what do you believe has been accomplished and how do you measure that accomplishment based on the events around the world today?

Paul Polman6:07

Well, thank you, Juanita, and welcome to my fellow panel members, Bruno, Manny, and Sonia. It's an honor to be here. What is very clear is that COVID has shown us that we cannot have healthy people on an unhealthy planet. And the relationships between climate change, biodiversity, human health, now also a racial dimension, the economy, are increasingly being clear. And what this really is, is that the private sector has to step up to ensure that we come out of COVID better than what we went in.

90% of the people of this world don't want to move back to the world that we came from, but want to create a greener, more sustainable, more equitable environment. The reality is that CEOs themselves and their companies can only do so much for which they are held accountable, but collectively they can do much more. So the Fashion Pact is a collective of courageous CEOs that have come together across the value chain to work on areas to create tipping points beyond existing initiatives.

When they're together, they become more creative, courageous, and we see bigger initiatives. In this case, around the areas as you mentioned of biodiversity, of climate, and of oceans. And what we have achieved is an industry that was relatively independent is now a coalition of 62 companies. 80% have now made commitments on biodiversity, 40% are already working on science-based targets, and when it comes to plastics, everybody has accelerated their commitments in the last year.

So it is these type of coalitions that keep us more ambitious and keep us driving forward at the scale and speed that is needed. And this is achieved within the last 12 months, as you rightfully pointed out, despite COVID.

Juanita Rajpal8:05

Well, let's go deeper now into those three pillars. You know, when it comes to climate change, in a report co-sponsored and co-authored by the Global Fashion Agenda which was released in August of this year, it said that, and I'm quoting here, that the fashion sector was responsible for some 2.1 billion metric tons of greenhouse gas emissions in 2018. That's about 4% of the global total. And they put this in context and they say that the fashion industry emits about the same quantity of GHGs per year as the entire economies of France, Germany, and the United Kingdom combined.

Now, in order to meet the target of keeping global rising temperatures below 1.5 degrees Celsius, this report indicates, says that the industry would need to cut its GHG emissions by 1.1 billion metric tons of carbon dioxide in less than a decade now. So Manny, let me ask you, what has the Fashion Pact already done to begin offsetting this fast approaching and already evidentiary existence of our Earth's limitations?

Emanuel Chirico9:19

Thank you, Juanita. In recognition of the urgent need to reduce emissions as an industry overall, the Pact has established three action items. Action item number one is an alignment with the existing UN Fashion Charter on Climate Change, which sets the bar for driving corporate actions that are consistent with achieving net zero emissions by 2050 through the implementation of science-based targets and also reducing emissions by 30%.

Action item number two is achieving 25% sourcing of low-impact raw materials by 2025. And action item number three is achieving a 50% use of renewable energy by 2025 across all of our operations and 100% by 2030. In order to deliver on these targets, the Fashion Pact is engaging with key experts in the industry, including the consulting firms Systemiq and 2050, who've mapped out strategic areas for our collective efforts and will provide us with assistance in the accurate reporting of our results and target setting.

So far, within most companies, significant individual action is already underway to reduce greenhouse emissions. Members achieved significant progress towards the transition to lower climate impact raw materials, specifically a 40% increase in cotton, as well as targets that are set up that a third of our companies are on track to achieve 50% renewable energy in 2020. It's the early stages of our efforts, but I think we're off to a very good start so far.

Juanita Rajpal11:22

Now, in a report released today, one fifth of the world's countries are at risk of their ecosystems collapsing due to a decline in biodiversity. And also a UN report that was released earlier this year, published in May, found that around a million animal and plant species are now threatened with extinction, many within decades. We understand though that the loss of biodiversity is not only an environmental issue, it is a developmental, economic, societal, security, and moral issue as well. So Bruno, when it comes to biodiversity, what has the Fashion Pact been doing there?

Bruno Pavlovsky12:05

Thank you, Juanita. Hello everybody. Just before going to biodiversity, I would like to make some remarks. The first one is about the Fashion Pact. They have had a lot of questions about how is that possible, you know, to have 60 compatible companies, sorry, who are sometimes competitors, working together. And I think that the topics we're addressing with the Fashion Pact, through biodiversity but through all the topics, is much larger than the competition.

Here we are talking at the early beginning of the chain when the competition is less and when we need to make the changes happen. So first one, no competition, only focus on the key topics. Second one, I heard a lot about compensation. We are not talking here only about compensation. We are talking a very concrete action plan. And I will take an example with cotton just to highlight how we can work together on these topics and try to make things change. Here we are talking about very concrete action to change the planet.

The third one, for all of us and for everyone, it's a new responsibility. When I take the example of Chanel, we want to be the ultimate luxury. We want to represent the excellence of tomorrow. We are working on creation, we are working on craftsmanship know-how, and we need also to work with the best raw materials. This is not only the best quality, but the best way to find these raw materials and to ensure that the way to cultivate them, to create them, is clean, if I may say, with the planet of today. And that's something very concrete that we need to tackle.

My example, the cotton you mentioned, Manny, a few figures. It's about 40% of all the materials used by the signatories of the Fashion Pact. It's about one third of the cotton unions in the fashion market. So it's very clear, it was a fundamental element. We need to improve if we want to cover the topics of biodiversity. When we talk about cotton, we talk about three major risks. One is obviously labor condition, one is the water consumption, and the third one is chemical usage.

If we want to provide the change, if we want to make things happen, we cannot stay at this level. We have to work together with the best experts. And one of the contributions of the Fashion Pact is to bring to the table the best experts to understand, you know, all together which are the right challenges and improve the different levels of certification that you can find on the cottons. And here we need not only to have all these participants, but to convince them to become quite active in the change.

For Chanel, for example, we have decided to focus on the regenerative organic certified cotton because we find there the best balance between what we need in terms of brand and the changes that we want to apply. I see it's a very good example to try to convince all the others to do the same at their level, at their speed, with their choice. For me, in these topics, the Fashion Pact is an accelerator. On top of cottons, we have been able to talk on many different materials and there is a long list. We need to focus and we need to improve, and that's the job at my level of the Fashion Pact.

Juanita Rajpal15:44

Now, when it comes to oceans, Sir David Attenborough has said that the world's oceans are turning into a toxic soup of industrial waste and plastic. And it has been reported that textiles are among the largest sources of both primary and secondary waste in our oceans. With that, Sonia, I'd like to ask you, how has the Fashion Pact identified and progressed on targets that are crucial to not just cleaning up the mess that's already been made, but not adding to the mess that's in our oceans right now?

Sonia Syngal16:20

Thank you. And let me start by acknowledging, you know, this is a big challenge. And part of the benefit of the Fashion Pact is facing some of these big challenges head-on with transparency. So let's start by stating the problem. You know, we know that there's unnecessary and problematic plastics that pollute the oceans, damage our ecosystems, affect our food water supply, and even impact the air that we breathe. And so in order to protect our oceans, you know, our big systems change is required. And this is, as others have said, you know, we realize we're all connected in this and we must take bold collective action as an industry to address this microfiber pollution and other impacts that the apparel industry has that directly affect our ocean.

None of us, no matter our size, can solve this alone because we're all connected on one planet. So what the Pact has done, you know, to start, we've identified two key action items for the ocean pillar. The first is to eliminate the unnecessary problematic plastics, and the second is to use only 100% recycled plastic by 2030. And as we shared in the report published today, so far 60% of the signatory brands have eliminated plastic packaging in their retail bags.

And while signatories continue to work through the challenges in hangers and business-to-business transport bags, to date, I'm really proud to say that 15% of our signatories have achieved elimination of unnecessary plastics. So in our first year, a fairly sizable progress, and we intend to continue to publish these kinds of numbers in our reporting going forward. And you know, I can speak for my own company that scales with a lot of our product around the world. And for us, putting our arms around the actual impact, the after numbers, was the first step. And then in the first year to get to that double-digit elimination, it feels like progress, yet we have a long, long way to go.

Juanita Rajpal18:28

Now Manny, you've said throughout your leadership that you are committed to and focusing on science-based targets. How then do you measure any success that has come your way and within the Fashion Pact itself?

Emanuel Chirico18:44

You know, I think, given my background, I'm a financial and operational background, to me, everything needs to be measured if you're going to have success. And I think it's critical and an essential part of demonstrating that we are serious about what we're undertaking and this is not just public relations. That we're setting targets that are based on science and that we're holding ourselves accountable to deliver against those targets.

It's also critical that those targets are, well, Paul Polman likes to use the word courageous, that we are stretching ourselves on those targets and keep moving forward to try and achieve those or exceed those targets as we go forward. And it's critical that we report our status of how we're doing against those targets continually as we go forward to see, are we achieving, are we improving, are we moving, are we raising the bar for our industry and for the Pact that we're working together.

So I think it really needs to be tangible, results-oriented targets that we establish and then having a reporting framework that's consistent throughout the industry and consistent how we measure that pulls it all together and allows us to report our results in a way that's clear to the consumer, clear to all of our stakeholders as we go forward, and that we're holding ourselves accountable to all those stakeholders as we go forward.

Juanita Rajpal20:16

The thing is, in any endeavor, there will always be challenges because if it was easy, we will ask ourselves why didn't we do it before. This year has certainly tested us all, but goals that were set last year were done so based on science and they still need to be met. Sonia, you had said before and just earlier said that just putting your arms around the numbers was a feat in itself because it is quite staggering just to simply understand what's at stake here. What happened, the hurdles do you think, Sonia, towards progress and what do you anticipate those to be in the future?

Sonia Syngal20:57

You know, this year has been such a year unlike any other, Juanita. And I think we've all realized not only the impact that we all have on the planet, which we had acknowledged through the origination of the Pact a year ago, but truly the impact of the fashion families around the world. And you know, as we've all lived with the COVID crisis, you know, I think that really was what crystallized for me and for many of us in this industry.

When you think about how many families this industry supports, and you know, if I think about my company alone, between our own employees but also all of the women that work in our factories, all the cotton farmers, all of the people that do transportation, it's millions. You know, we tally in the couple of millions. And when you add up all the companies in fashion, the impact is great. So these families that are reliant on the industry for feeding their families, for being at that dinner table and providing, you know, I think it's really come into focus this year.

And so for us that have the obligation to guide the industry, we must think about the challenge of sustaining a healthy fashion industry in addition to the impact and the challenge with meeting and exceeding the goals. And they dovetail very nicely. And I think really it comes down to the simple truth, you know, can we in good conscience know that the workers that work in our industry, at night when they're at the dinner table with their families, can feel good about how we are treating their communities, their planet, their water, their local biology? And at the same time that we continue to push forward with health in the industry.

And so the challenge, I think, is great. However, the imperative is even greater because of what it does to livelihoods and families around the world. So that's a little bit how we think about it, and I think it gives us the energy and the criticality to move forward with, you know, aggressive goals on multiple fronts.

Juanita Rajpal23:09

In this topic, the Fashion Pact has a diverse membership. Paul, are there differences of involvement or diversity of issues according to the market segments that these companies represent?

Paul Polman23:29

Paul, I think you're on mute there. Could you unmute?

I apologize. Are you going? Great. Thanks. Sonia and Manny said that well, we don't compete on the future of humanity. And what you see here is the biggest collective industry coalition across any industry that we at Imagine are involved with. We work in the food sector, we work in the finance sector, and we work here in fashion. And having 62 companies together, you see the benefit of first and foremost sharing their best practices with each other and then driving to the highest common denominator.

Now, the key here is that you have the total value chain, because the issues might be, as Sonia said, labor standards up the value chain, whilst the innovations might happen down the value chain. The luxury companies are in a better position to innovate around sustainability, try new things, and set trends than, for example, the mass of the market. So having everybody together and benefit from that collective higher ambition as well as best practices is absolutely crucial.

What we now need is, we have about 30% of the whole market, enough to have a tipping point. We have governments that have come to us, NGOs who want to work with us, innovation incubators that think that they can scale collectively with us. So we are starting to see the advantages of doing this and driving the systems change that is needed. What we now would recommend is that the companies that are not yet part of the Fashion Pact really seriously consider joining for their own benefit, but also for ensuring that the industry as a whole changes at an accelerated speed. And the world would be so much better for it, the image of the industry would be so much better for it, and the citizens of this world would be so much more grateful for it.

Juanita Rajpal25:28

Yeah, collaboration and dedication are key. So Bruno, when we look ahead, what are the next steps then for the Fashion Pact?

Bruno Pavlovsky25:37

So for me, to be part of the first one, Fashion Pact, I think we need to enlarge and to continue to dig together and to understand new topics. As you know, there are many. Here we talk about some specific examples of cotton, but there are many others and we need to learn from this experience. We need to decide what are the next topics, we need to measure and set up the right KPIs to understand where we are. A lot to do to the Fashion Pact and again, the best experts to help everyone to understand and to find the right positioning.

On the other hand, I think it's also the role of the Fashion Pact is to convince all the signatories that change will happen only in their companies. Okay, here we're talking about very concrete action plans and it's up to each company to decide what are the next steps and how to include and how to make it happen. You know, it's about not only talking about it, it's not only about communicating about it, it is how to make it happen. And that is a big challenge for all of us.

On top of that, if I want to take some step back, I think that the best to judge our projects and our efforts will be our customers. Today they touch, they buy, they feel products, and these products have to include, you know, all these new values we are talking about. And that is making a big difference. So for me, being able to invest, you know, in the Fashion Pact, in this transformation, is obviously a way to say that our brands will be still existing in the next 20 years. So it's a key moment, as already mentioned, and we need to be there, we need to be together. We would love to continue to compete, but at the same time, we'll organize these changes and these changes will give a better planet.

Juanita Rajpal27:34

Okay, I'd like to now open it up to questions from our audience and we've already got quite a few coming in now. So let's get to it. We've got here from Gaurav, how can we collaborate and have single guidelines for unifying the industry as there are many coalitions or associations working for reducing the impact with very diverse estimations? Paul, can I ask you to answer that one for us?

Paul Polman28:03

Well, you know, when there are issues in the world, a thousand flowers bloom. What we're trying to do with this collective is create a bouquet. Because there are so many of these coalitions around climate change, around biodiversity, we usually don't see the step change that we need. We end up with incrementalism. So the beauty of this is that we will have less, bigger, and better initiatives. And with that, we also, as you can see already after one year, achieve better results faster.

We obviously make it totally transparent. We get the best experts in that help us on defining biodiversity for this industry, nobody's ever done that, to help these companies accelerate to move to science-based targets on climate change, over 40 companies now, more than any other industry. And then every year with a scorecard developed by BCG, with a publication of the results and achievements with the individual members holding each other accountable, we will communicate on the progress and drive to collective higher and higher. This, I believe, is the future of partnership. This is the future of the industry. And hopefully we'll have more companies join soon as well.

Juanita Rajpal29:22

We have a question here for you, Bruno. The question is from Fulia. Chanel has been undertaking a series of acquisitions along their supply chain with small businesses. How are these transactions sitting within the custom of the company's sustainability policy?

Bruno Pavlovsky29:41

Yeah, I see all these acquisitions are key for the company for the next 20 years. We are not talking about today, but quite often we are talking about craftsmanship, we are talking about unique know-how, more and more difficult to ensure that all this now can continue to exist. So here we are giving to this small company the opportunity to continue to develop, to continue to work with all the partners. So I'm not talking only one brand. Chanel is, if I may say, an open business. And the idea for us is that if we want to continue to be as strong in the next 20 years, we need to ensure that all these people, not only in France, in Italy, but around the world, can continue to exist and can continue to bring their know-how to what we need.

Juanita Rajpal30:32

Okay, Sonia, I've got a question here for you. It's from Christian, asking why wait until 2030 to implement these changes? SpaceX launched a rocket into space in as little as 10 years. Could Gap Inc. not eliminate plastic in a much shorter time than that?

Sonia Syngal30:52

I love the challenge. And I think, you know, as we publish our annual sustainability report, these are the challenges that we pose to ourselves as well, because we all want to get there as fast as we can. We really do. And so for us, you know, I would say that we're committed to 2030 and we're looking for every opportunity to pull ahead. And you know, we've got a very passionate employee team and very passionate customers. I think that will help give us the innovation that is required to make those changes. And we hope to surprise and delight with every year's progress.

Juanita Rajpal31:30

Paul, I have a question here for you. It's from Bieter. How does the Fashion Pact control and enforce what has been agreed? What are the downsides if targets are not met?

Paul Polman31:45

Well, this is a collective of courageous CEOs that has decided to accelerate their company plans. And even despite COVID, in the first year, I think they've put their word where their mouth is, and that's very encouraging. The strength of the Fashion Pact is only as strong as its weakest link. So if there are members that diverge into different directions and are not willing to take these minimal commitments that are needed, one of the absolute commitments, as Sonia is saying, is for example to get to the Paris Agreements on climate change and to stay below 1.5 degrees.

So if companies feel for whatever reason that is not their strategy or that it is difficult to achieve for them, then they will not longer term be part of a collective that tries to drive the industry for the better. But I think that those companies that would follow that route would put themselves at risk. Increasingly, we can see that companies that lead on ESG, that are multi-stakeholder, long-term focused, environmental, social, and governance, are also the ones that are better performing and actually also the ones that increasingly the financial market is willing to invest in. So everybody would be well advised to be in, because many of the things, if you go out, you really can't achieve versus what a collective can do.

Juanita Rajpal33:06

One of the interesting questions, I think one of the things that we have been seeing throughout the year, and as I mentioned earlier and you've all touched upon, is how interconnected we all are and everything that we do. Whatever happens on one side of the planet is felt on the other side. There have been a range of social issues that have been brought to the surface this year and in the last 16, 18 months even, pre-COVID and obviously within this year of COVID. And those are social issues that are impacting lives, but also our planet in terms of, again, climate change, biodiversity, and oceans. What about the social issues that are, when we look at diversity, inclusivity, Black Lives Matter, gender equality, all of these issues that are extremely important to every company structure? How is the Fashion Pact addressing that and is that on the agenda or is that already in the works? Who, I guess, Bruno, would you like to take that one?

Bruno Pavlovsky34:13

What you mentioned, you know, it's a key challenge for all companies. So Fashion Pact is the level of discussion, but not only Fashion Pact, these are things that we need to address in each single company. There is no choice. We need to take care of the people who are working for us anywhere. There is no question about that. And that reason why we are quite involved on all these changes. But today, as you can see, the situation is specific. It needs to be addressed country by country. And that's the reason why even if we have very high standards for Chanel, we can talk about it after, we have to enter in the detail and the situation can be as needed to be taken into consideration at the highest level of the company.

Juanita Rajpal35:04

Manny, how do you ensure that with we have 62 signatories right now within the Fashion Pact, how do you ensure that those that are part of this Pact are actually staying true to what they promised in the first place?

Emanuel Chirico35:22

I think the key is transparency. I think we need to continue to disclose the information that we've said we were going to drive towards, the goals that we've established, the science-based targets, and some of the other targets that we've established for ourselves individually as companies and as part of the collective Fashion Pact together. I think if you think about your stakeholders, our consumers, our employees, and Paul touched on it now, even our stockholders are demanding that we be held accountable and that we deliver on the results that we've talked about in these science-based targets.

Just like we are held accountable for our financial results, driving our earnings per share, driving our sales growth, we do that by first and foremost putting ourselves out there, putting goals and objectives out there for each of our companies, and then at the same time driving towards those goals. And do we achieve every goal we're trying to establish? No. But we're moving our companies forward and we need to do the same thing here with the targets we're setting for ourselves from a biodiversity point of view, from what we see in the environmental issues, and then we've touched on some of the social issues. So all those targets are there and collectively as an industry holding ourselves accountable for those results will deliver against that and deliver change.

Juanita Rajpal37:02

And while I still have you here, Manny, do you believe will fashion ever be sustainable? Are these things compatible with each other?

Emanuel Chirico37:11

Yeah, I think so. I believe so. I think it's critical that we set that as our goal and we do it in a way that has a level of authenticity and integrity to it. That you know, you just don't set goals that sound good from a public relations point of view, but that you know you can deliver against, that you know you can measure against, and then you can go and continually show that progress as you go forward to achieve everything that we want to achieve. We're going to need some technical breakthroughs from a raw material point of view and a processing point of view. I believe the industry is up to those challenges as we move forward. And no one company can do it by themselves. It needs to be something that's done as an industry, that we hold ourselves accountable to do it, and we need to be open to allow our other competitors that aren't part of the 62 companies to bring them into the fold, to make them part of the journey as we go forward as well.

Juanita Rajpal38:15

It's also an opportunity, isn't it, for smaller companies, those who have the technical know-how, who have that kind of, what Prince William was just talking about, those Earthshot moments that we can have. It's an opportunity to create something that we don't know exists yet or even know how it would exist. But it is possible. Sonia, I have a question here for you. It's from Anna. How can the Fashion Pact tackle the systemic issue of overproduction in the industry, which is surely in itself a significant contributor to environmental degradation, without even going into the issue of overconsumption at the consumer level?

Sonia Syngal39:02

That's a really interesting point there. You know, I think we're seeing the industry shift. You know, all sorts of new business models emerge, whether it is recycling models or circularity or what have you, that are pushing on some of these themes. And you know, certainly it starts with the product right at the beginning, creating the right product at the beginning all the way through the chain. And then it's really being in support of our customers' needs that are both, you know, I think emotional needs and physical needs for clothing. So we're paying a lot of attention to the whole value chain. And you know, the definition of quality has just shifted. You know, what used to be a quality product now has to be a quality and a sustainable product. And I think with that clarity, the usage and the end use that our customers require, it will be better served. And that's how we're thinking about it, as well as connecting to all of the evolving business models that'll continue to create this closed-loop system between fashion and the planet that has to continue to build and grow.

Juanita Rajpal40:11

I think what's an interesting part of any discussion now as we go forward is that we all, I think everyone recognizes the ways things were being done before, they don't work now. And what we need to focus on is, okay, now what can we do to move forward? Bruno, interestingly enough, Chanel has taken numerous initiatives to further reduce its emissions by 50%. There is Chanel Mission 1.5 degrees as well as investments in innovative companies that give Chanel the opportunities to explore materials that don't extract from nature nor harm nature in the processing cycle. What do you think being part of the Fashion Pact has meant for your company?

Bruno Pavlovsky41:01

I think that all the topics you mentioned, in fact, we have no choice. We are at a key moment. If we don't react, if we don't appropriate all these topics, if we are not trying to understand with others, and that's the good news of the Fashion Pact, we are not alone, we are talking together, we are learning from our experience, and again, we have no choice. The moment we have a few years, a few years is perhaps too long, but we have a few years in front of us. And being able to react now to make this changing now, it's the only way to be able to continue and to save this amazing business which is fashion. So for me, we have today, we have to try to imagine what could be in 20 years from now, this new option. That reason why we are investing, but to test, to learn, and let's see what happens. It has been, I believe, that the past two years have been a key in this decision of going ahead. Now we are learning and it's very important for us. It's very important for our people also.

Juanita Rajpal42:20

We have one final question. Paul, I'd like to ask this one for you, actually. This is from Vanessa. How do you bring this new mindset of non-competition to such a competitive and conservative industry? She says, I love your words, but I see a lot of difficulty in convincing the industry.

Paul Polman42:37

Oh, absolutely. And it will be difficult to convince 100%, Vanessa, we don't disagree with this. But here you've seen some great leaders in the fashion industry today on the panel. What we think is that with about 30 or 40% of the industry present, you can actually create tipping points. The civil society wants to work with you, governments are getting interested, technology will be attracted, and it will be so much to the benefit of the companies that are participating. So whilst we realize that ultimately you need the right frameworks or legislation in some of the places, and we're seeing that happening with Europe with the circular economy packages, for example, or some climate commitments that countries are taking, we believe that we can create a critical mass in every industry.

As I mentioned, we're doing it now in food, we're starting to look at it in finance. It's hard work, but I think we're at the point now that we have a good cadre of CEOs that see the importance. One of the examples of this Fashion Pact also, when COVID came, they went immediately together on PPE material. Or working like Manny with PVH and others initiated with the ILO the COVID-19 action in the global garment industry, dealing with the value chain and health and income and job protection. We've never seen these initiatives. So if you put the right people together, we believe you can create these tipping points that the world needs right now. Being incremental or playing not to lose is simply not an option anymore.

Juanita Rajpal44:11

Right on those words, some key words here from this panel discussion: courage, action, no choice, as Bruno had so rightfully said before. I'd like to thank all of you. I'd like to thank my guests, Sonia Syngal, Manny Chirico, Bruno Pavlovsky, and Paul Polman. Thank you so much for your words here today and the work that the Fashion Pact is doing. I'd like to thank you all for sending in your questions as well as you join in on this ongoing discussion. I'm Juanita Rajpal. Thank you all for watching.

Unknown44:42

Thank you. Thank you.