Pressure to change is coming from more than just the consumers themselves. Governments around the world are introducing new regulations regarding how products are produced and what materials can be used. At the same time, Environmental, Social and Corporate Governance (ESG)<\/a> factors have become a key focus for the investment community.\u00a0<\/span><\/p>\n <\/p>\n Given the well-documented need of young people to have as much information as possible about their purchases, companies will not only have to take full responsibility for how their products are made and the conditions under which they are made, but also to tell the story of how all this happens in a transparent way<\/p><\/blockquote>\n \u201cWalking the talk on sustainability issues is something that [brands] can no longer afford to ignore. Consumers nowadays have so much more information on the sustainability credentials of products, as well as the companies behind them and their impact on the wider community,\u201d says Anson Bailey, Head of Consumer & Retail, ASPAC, KPMG China, commenting on a recent research report by KPMG and Serai on sustainability in the apparel industry. The report, entitled \u2018Moving the needle: Threading a sustainable future for apparel,\u2019 offers insights that can be applied to a wide range of industries.\u00a0<\/span><\/p>\n Changing consumer attitudes are a major reason why sustainability has risen up the agenda in China for many businesses in the apparel industry and beyond.\u00a0<\/span><\/p>\n When thinking about what defines sustainable products, Chinese consumers point to factors such as high-quality, durable materials that require little after-care, chemical and pollutant-free products and processes, the use of resource-saving technologies, and the use of recycled materials.<\/p>\n Consumers are increasingly willing to pay more for sustainable products, so it can be potentially lucrative for brands to differentiate themselves in this way. This trend appears to have accelerated during the Covid-19 pandemic<\/a>, with consumers having taken the opportunity of closed stores and more time at home to reassess their consumption habits. For example, a KPMG study in 2021 found that since the beginning of the pandemic, 68% of Hong Kong consumers and 65% of those from Greater Bay Area cities in mainland China have become more conscious of a product\u2019s origins. According to a 2019 survey by Fashion Summit and KPMG, consumers in Shanghai ranked a brand\u2019s environmental friendliness message higher than any of the other cities surveyed.\u00a0<\/span><\/p>\n Walking the talk on sustainability issues is something that brands can no longer afford to ignore. However, there are still differences between the environmental considerations and the actual behaviour of consumers. Cost can be a key obstacle to consumer adoption of sustainable products. The Fashion Summit and KPMG survey found that worldwide, only 13% of people are willing to pay more for sustainable fashion (the figure was slightly higher for consumers in Shanghai at 22%). Nevertheless, research indicates that businesses with higher sustainability scores have a lower cost of capital \u2014 savings that can then be passed on to consumers \u2014 and according to analysis by KPMG, a sustainable apparel business can expect to have an average increase in their net profit of 1-1.5% for brands, and 1.5-2.5% for suppliers. \u00a0<\/span><\/p>\n![\"launchpad](\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2021\/03\/lp-general.png\")
<\/a><\/p>\nHow much do Chinese consumers care about sustainability?<\/b><\/h4>\n
\n\u2013 Anson Bailey, Head of Consumer & Retail, ASPAC, KPMG China<\/p><\/blockquote>\n