“Sustainable Fashion” (Still) Doesn’t Exist Because the Industry is Inherently Unsustainable.
An open letter from a “sustainable brand” co-founder
It’s been 15 years since I started the first iteration of tonlé (KeoK’jay — meaning “bright green or fresh” in Khmer) with a team of 5 incredible people out of our homes in Phnom Penh, Cambodia. It wasn’t my intention to start a business, or to continue running it after the year long research project that took me there in the first place. But I stayed for seven years to build this vision with that same small but mighty and steadily growing team with an evolving vision and an incredible network of supportive customers behind us every step of the way. We’ve faced our fair share of challenges through the last 15 years as well as times of indescribable joy. I know that tonlé today has made a significant impact on both our community in Cambodia and the broader industry with our bold moves in zero waste production and what should be the most basic of ethics — to treat the people who make the clothes we wear with equity as co-creators in a better future. While I’ve always believed this to be a low bar to clear, it is astounding to me how many companies are not even meeting that, and, especially in the last few years, how every part of the fashion system is increasingly stacked against those who seek equity and justice. In short, the chorus of people talking about and proclaiming sustainability grows ever louder, but the evidence from my personal experience of both running a brand and working in a country deeply impacted by colonialism and the fashion industry suggests that things are getting worse, not better.
Change is Constant
With this in mind, we are making changes at tonlé that I hope will allow this vision created by our team to sustain in the future, even if it is a different way. Many of you have been with us every step of the way, and I cannot understate my gratitude to you as your support has kept us afloat in the most difficult times. Yet, it has felt that the systemic challenges that plague this industry have been stacked against our success, even more so in the last few years since the pandemic exacerbated existing disparities.
Late last year, we tried to restructure the business and ran a sale to do so. We were able to make some changes but the partnership we anticipated did not pan out as expected. Now, we’re excited to let you know that we have a new partnership on the horizon that we believe will transpire within the month. With that in mind, we’re doing another sale to help support this new transition and are excited to share more about it with you soon. In the meantime, we hope that you’ll take advantage of the weekly sales on select product categories and our sample box sale which we’ll be running throughout the month of April.
I wanted to let you in on what this journey has been like, and why I believe so much needs to change within the fashion system to actually create a space where real sustainable change can happen. The following is a reflection on our experiences in hopes that others can learn from them and that together we can build a truly sustainable fashion system.
Background: Cambodia in 2008, a Recession, and the Rise of Fast Fashion
When I came to Cambodia at age 21, the concept of fast fashion was not yet widely spoken about, but I saw it rapidly rise through the financial impacts of the 2008 recession, through the eyes of garment workers pressured to produce more and more, and through the piles of waste textiles that started appearing in second-hand markets around Phnom Penh. KeoK’jay was the first and only “sustainable” fashion/apparel business in Cambodia when we started in 2008. We used waste materials because that was what was there and we believed that to be the most sustainable option. The Rana Plaza collapse had not yet happened, and The True Cost had not yet come out, and there were very few sustainability influencers or bloggers to speak of. We built something as a community with little input or ideas of how to do it from others, figuring it out day by day, trying to make decisions based on ethics rather than what was the most profitable. A series of decisions based on ethics worked favorably for us financially until 2020; we were able to at least pay all our bills and sustain from month to month. Our team was paid well, we were growing slowly but surely, and we had what we needed. 2020 was when everything changed.
Fast Fashion + D2C + No Regulation = Monopolies and Increasing Disparities
The last few years have been an incredibly difficult time to run a business, especially one that tries to operate ethically in a world that is increasingly polarized and where wealth is being extracted at an ever-increasing rate, leaving most people poorer and a select few significantly richer. The pandemic has been a challenge, but it only exacerbated existing inequity and led to a greater divide between the rich and poor, and left smaller businesses with a much smaller pool of resources to draw on, while large companies put their money into savings and investments rather than distributing it to workers when they’ve needed it most.
This is not a new trend. Studies show that wages for workers in the United States have been steadily declining since the 70s compared to inflation and the cost of living. In addition, sending clothes to be manufactured overseas allowed US corporations to extract more profit while lowering prices even further, and while customers saw their wages decrease, brands continued to lower their prices to compete and got customers hooked on low price, cheaply made clothing. The fast fashion manufacturing process enabled companies to further offset financial, social, and environmental risks on factories and their workers, allowing them to order even more without facing any consequences of the increasingly wasteful and harmful process.
As fast fashion was on the rise, new direct-to-consumer e-commerce models rose up in tandem. Using the “lean startup” mentality of tech, such D2C enterprises found ways to further offset risk onto manufacturers while increasing their profits. By using phrases like “We cut out the middleman” direct-to-consumer e-commerce startups (Like Everlane, Reformation, Amour Vert, and All Birds), led investors to further rejoice: They could now eliminate the need for all those “middlemen” (usually small businesses that provided well-paid local jobs) and keep those profits for themselves. Additionally, they now could not only avoid any risk in the form of investing in manufacturing, something that had already been done away with decades before but also avoids any need for brick-and-mortar retail, another key job-providing industry. Instead of shopping malls, investors and startup founders envisioned and created a world where people could be employed in massive warehouses, often as contract workers without protections or union, and generate far more profit. Many of these companies were nominally “sustainable” but the systems they created were anything but that. “Cutting out the middleman” became a code word for monopolization, with Amazon most saliently leading the charge. But, because these companies claimed to be saving consumers money, American anti-trust laws have been far behind in regulating this new type of monopoly and have failed to do anything about this worsening problem.
With this backdrop, the Covid hit. Businesses like ours that relied on independent brick-and-mortar retailers, something we did out of principle because we believe they are an important part of the economy and community, were hit hard alongside restaurants and others in the service industry. At tonlé, we had cancellations of over $200,000 of orders that we had been producing for two months. On March 15th, our biggest delivery date of the year for our spring 2020 collection, most of our retailers across the country had to shut their doors and cancel their orders. A few, because of their strong principles and commitment to fair payment, and because they had cash reserves, paid for their orders anyway. To those retailers, I am eternally grateful as we most certainly would have gone bankrupt right then if it were not for them. We made it through that month through the generosity of some of our retailers, and an outpouring of customer support on our site. But we had no idea that things were only just going to get harder.
The Phrase “Supply Chain Disruptions” Doesn’t Do Justice to Our Experience as a Supplier.
The rest of 2020 through 2022 was a blur of rapidly fluctuating sales cycles, intermittent closures of both retail store partner locations, our office, and our workshop in Cambodia, and production disruptions. Through those 2.5 years, we managed to pay everyone, but it was incredibly stressful and required the business to take on significant debt.
In 2021, many companies experienced “supply chain disruptions” but in the case of most brands, they can just get their products produced elsewhere if they find their facility is closed down due to covid. In our case, in mid-2021, 100% of our products were produced by our own team. So when we had an incredibly strict lockdown that affected our facility and team in Phnom Penh, we could not produce anything for almost 2 months and had to postpone hundreds of orders that had taken months to put together after a year of retailers themselves having struggled with Covid closures and rising expenses. Most of our retailers were, again, very supportive and understanding — but it didn’t negate the fact that we had to pay everyone for two months without having any product to sell. This would be like having a shipment with two months of product lost and not being compensated for it. Essentially, we lost two months of revenue. Other companies who did not run their own production didn’t have to face this loss. If their factory couldn’t produce the products, they would just not pay for it, leaving the factory to have to deal with the repercussions for the workers. These setbacks affected our cash flow and ability to pay for the rising cost of doing business well into 2022, and we had to take on yet more debt to survive.
Investors Don’t Want to Invest in the People Who Make their Clothes.
Throughout these years, I approached multiple investors and funders about raising money for our initiatives from nonprofits, traditional investors, and impact investors. Before the pandemic, I had medium success in this endeavor, and had managed to raise what would be considered a small amount of money for a startup. All of the people who invested in tonlé were values-aligned and cared deeply about what we were doing and have always been supportive. But, it doesn’t reduce the sting of the fact that it was incredibly difficult to find people who both had money to invest and also were willing to put it into something that they thought would make them less money, than say, a vc backed startup or a technology platform that claims to be sustainable but truly is upholding unsustainable systems. I even had many investors say directly to me, that they believed in what I was doing but that it could not make money and that even though they “cared about the impact” they clearly didn’t care about it enough to lose the opportunity to make a lot of money. And notice that I don’t say, lose money, because we’re not even talking about losing money, we’re talking about the choice between investing in something that will make a reasonable profit vs. something that will make buckets and buckets of profit. Investors, even impact investors, it seems, tend to want the latter. While I was able to raise some money before the pandemic, it was impossible to do so during the pandemic, when we needed it most. Investors might tell me that we weren’t profitable, or that they needed to hold their money because they weren’t sure what was going to happen in the markets, or that they preferred to invest in tech which was less “risky.”
I began to see clearly that investors are often driving companies to be sustainable or not, and deciding which companies get to live and die. They have much more power than the founders themselves and certainly more than customers or workers. While the narrative around “sustainable fashion” has been to blame customers for not shopping more sustainably, or not living their values, I’ve seen a landscape in which customers, and even small business owners, have increasingly less money and power, while investors and larger corporations have significantly more. All that to say, as customers demand sustainability, investors are still not willing to invest in the real changes that need to happen, which is to radically disrupt the financial system that allows them to hold so much wealth and power in the first place. Of course, they are not going to do that.
This Technology & Wealth Fallacy Blocks Any Real Progress.
The people who could make the change overnight are not incentivized to do so because it is against their own interests. I have met a few very wealthy people who understand this and are doing things to change it. But they are few and far between. Many wealthy individuals believe that they can make a change by investing in companies that will make them money, allow them to hold their power, and change the world. Usually, it’s imagined that technology will fix these problems and that they will all be able to continue enjoying the quality of life that they have. But this is a dangerous fallacy that needs to be addressed head-on. One only has to look at the impacts of climate change on wealthy homeowners — at some point none of us is going to be spared from these impacts if we don’t do something imminently.
In the last 15 years, together with my team at tonlé, we have recycled over ½ million pounds of textiles. We did this with the (fairly compensated) labor of 50 people, through a lot of creativity and determination, but using relatively simple technology that has been around for hundreds of years. At the same time, many investors passed us up, claiming we were not innovative enough, and that we should be doing more to develop technology that would save the world. Some have even said we were not impactful enough. Meanwhile, many of these same investors put money into technology startups that to this date have not yet recycled any material; they have been developing technology instead. All this while, we were slowly but surely getting waste out of landfills in Cambodia; pre-consumer waste that barely was even noticed by the companies who generated it. For all of this, my team was called not innovative enough and not impactful enough. It’s not that we wanted to be noticed or recognized for this, but we do deserve to be compensated for cleaning up the waste of others. The incentive structure is quite backward. Truly, those who are doing the most impactful work in the places where it is most needed are usually the factory owners and workers themselves, the innovators on the ground who know their own environments and local communities but are rarely compensated or recognized for their work. This furthers the wealth disparity and continues funneling money to global north companies and investors and innovators who caused the problem in the first place.
What Would it Take for the Fashion Industry to Actually Become Sustainable?
I don’t say any of the above to complain or say that we deserve more credit or money. The thing that makes me saddest about tonlé’s inability to thrive within this environment is that I strongly believe we did the absolute best we could, and had the most amazing team, and the most amazing customers. So if we couldn’t make this business work financially, it is not because we failed, but because the system failed us. That is not to say that we haven’t made any mistakes, or that I haven’t made any mistakes. But the system allows certain people to make mistakes, and to fail, over and over again, and cause harm to others, over and over again, and to actually be rewarded for doing so. That is what makes me sad, and honestly, angry.
I am seeing a world that is increasingly monopolized, where it is harder for young designers and makers to start-up a sustainable brand, where it is harder to get a job where you can be paid fairly in the fashion industry even though 6 of the 10 richest men in the world have made their wealth in fashion, where it is harder for small businesses to set aside enough cash reserves to weather a storm like the Covid-19 pandemic, where it is harder for people from marginalized communities to have access to funds and investment, and where it is harder to funnel money to the initiatives that are actually creating change on the ground.
I hope that an investor sees this story and reaches out to me to prove me wrong.
If that is you and you’re reading this and some of what I’ve said has made you a bit uncomfortable, I hope you sit with that discomfort and think about what you can do to change this industry. Because while change depends on all of us, you actually have the resources and therefore much more responsibility to change it, especially if you’ve made your wealth in a way that has contributed to the harm in the first place. Please do reach out to me — I can connect you with entrepreneurs and innovators who are deserving and ready to put your money to use to create actual change.
If You’re a Customer, Shopping Your Values is Still Important.
While I’ve spent the majority of this article talking about the systemic change that needs to happen, a business like tonlé could not exist without an incredibly supportive network of customers, in fact it’s been especially important in the face of the challenges we’ve been through. When we’ve faced hardship, it was always our customers who stepped up to support us and get through financially hard times, and that is why I have always considered our customers to be our partners in change. And while conscious consumerism isn’t the only solution, it honestly makes such a huge difference to small businesses and the people who work there. And seeing several businesses I’ve admired go out of business in the last years, it’s been devastating, to say the least, and your purchases can make a significant difference to those of us who are trying to challenge the status quo from within this industry. I hope to be able to continue doing that with our amazing network of customers, but many small businesses like ours deserve love and support. That is part of the reason why we have pivoted to using our platform to also champion the work of others in this time of challenge and hope to continue being able to do so.
In summary, I still feel that there’s no such thing as a sustainable brand within an unsustainable system. Yet, I’m hopeful that what we’ve built at tonlé can continue to shed light on how the industry can do things differently, and I am looking forward to sharing with you how we’ll continue to do that. We need your help to keep going, and other brands do too. To my investor friends and colleagues out there, I hope that you’ll take some time to consider how you can not just invest in good companies, but consider the impact of your investments on moving towards more just systems for all.
