Emese Dobos and Andrea Éltető, researchers at the ELKH Centre for Economic and Regional Studies (KRTK) examined the different levels of regulation in the fashion industry towards sustainability and the heterogeneity of the legislation or legislative proposals. Furthermore, the researchers analyzed the relationship between growth and sustainability along the case study of the Hungarian fashion brand, Nanushka. An early-citation online version of their research paper was published in the renowned Q1-ranked Sustainability Accounting, Management and Policy Journal.
The sustainability of the global supply chains has been at the center of discussion in the past few years. One of the most polluting sectors is the fashion industry. Fashion brands often decline responsibility and continue misleading or exaggerated communication. Based on documentary analysis and literature review, the article describes current civil, supranational and governmental policies aiming to enhance the three dimensions of sustainability. The regulation of the countries and integrations are not unified, therefore the fashion chains can circumvent the strict rules.
Regarding the economic pillar of sustainability, the authors apply the theory of high-growth firms. The relation between strong growth and sustainability can be positive or negative depending basically on the methods and mentality of the company management. The article demonstrates the problems of sustainability-growth balance and the greenwashing practices with the example of the Hungarian Nanushka fashion company. The case study reveals that there is not necessarily a harmony between the strong sustainability communication and the definite steps of the firm concerning the environmental and social sustainability.
The article highlights some problematic areas of sustainability and greenwashing and describes the different levels and targeted areas of regulation. The authors provide regulatory suggestions and managerial implications. Policies should refer to transparency and supply chain accountability. Certain definitions of materials should be regulated precisely, and the exact percentage of their different types should be reported. The lack of exact definitions can yield misleading statements on labels. Positive (financial grants) and negative (eco-tax) motivating factors are to consider, such as the creation of an independent supranational agency. The companies should strive for an open and reliable communication and providing credible, relevant information.