Why Shouldn’t Your Sustainability Efforts Demonstrate Profitability + A Commitment to the Environment?

1. Turning Challenges Into Gains

Excess inventory problems and related supply chain inefficiencies have escalated amidst the pandemic. This has caused chaos and business losses across industries and around the world. At the same time, pressure to increase environmental regulations and improve sustainability efforts continue to grow in the face of the climate crisis. The two are not only related, but complement one another. You can solve both problems and improve your business' bottom line just by being more sustainable. One of the biggest concerns in implementing sustainable practices is the belief that the associated costs are prohibitive. In reality, when done correctly, the returns from being sustainable increase your profitability and improve your business financially.

2. Recognizing Hidden Costs

Let's take, for example, textiles. The textile industry is one of the largest contributors of global emissions. Textiles are everywhere--from hospitality, to airplanes, to home interiors, cars, and our clothing. The annual cost that can be recovered from warehousing alone, just for the textile industry’s $120 billion of unused textiles, is $168 billion - not to mention the processing and environmental cost of burning or sending to landfill. Why? Because warehousing is expensive. So is the associated insurance, utilities, and labor fees.

Further financial returns can be realized by recouping the resource costs of using the readily available inventory in the warehouse instead of expending resources to re-manufacture and reship new materials. On top of all that financial burden, you end up adding global emissions to the environment via remanufacturing what is already readily available in a warehouse. These are just some of the hidden business and environmental costs associated with not using existing materials and, instead, manufacturing new duplicate inventories in the world.

3. Waste Is A Priority For CFOs

Looking at the numbers associated with the fashion industry: It’s responsible for 8-10% of global emissions as excess textiles take a sizable toll on the environment and consume tremendous natural resources. A single pair of jeans consumes up to 10,000 liters of water. The average American throws away 37 kgs of clothes annually. And up to 85% of clothes end up in landfills or burned.

At that volume, waste is not just environmentally irresponsible, it’s a financial risk that becomes a priority for CFOs and other bottom line-oriented business leaders.

4. Value of Digitization

While most fashion brands recognize the urgent need to move toward sustainability, with declining margins amidst the pandemic, introducing new, expensive, and unprofitable initiatives can be unrealistic. The good news is, according to the World Economic Forum, digitization is a critical opportunity for driving both sustainability and profitability across the fashion industry. By using digital technologies to enable new revenue and value-producing opportunities, circular fashion efforts can pay for themselves while providing impactful brand value.

5. Driving Profit Performance Through Sustainability

Queen of Raw is accelerating the notion of profitability through sustainability. The company’s no-code platform enables intelligent excess inventory management in the cloud. Enterprises upcycle, resell, recycle, and donate excess inventory from their existing systems on Queen of Raw’s cloud-based enterprise software portal, Materia MX.

Our integrated impact management function demonstrates impact in real time, measured by our proprietary algorithm and scoring methodology. It was developed with the support of Solve Innovation Future (MIT Solve’s groundbreaking philanthropic venture fund) and is backed with authenticity by our Raw Chain blockchain.

6. Estimating Impacts of Sustainability Efforts on Bottom Line

Businesses can realize profitability gains quickly by reducing unused inventory. We worked with leading impact and sustainability consultancy, Impact Edge Consulting, to build an ROI model to estimate the profitability gains of working with Queen of Raw. The payback period on a three-year engagement with Queen of Raw tends to happen in the first six months. A recent client with $5M in unused inventory experienced profitability on the effort within 3 months and will see more than $6M in savings over a three-year partnership.

These data points demonstrate that sustainability initiatives can and must be profitable. Queen of Raw built an ROI calculator to allow organizations to anticipate the value they can expect to gain in investing in sustainability on its platform. To estimate the potential financial impacts of utilizing the Queen of Raw platform, contact us at impacts@queenofraw.com.