Not a day goes by without someone we know asking what we think of this or that brand.

They ask us about clothes, but also about food, banks, cosmetics and even bicycles. And it makes sense: right now, it looks as if every brand on earth, from the tiniest to the most gigantic, is committed to protecting the environment.

If every company is committing to the environment, you might think we’re heading in the right direction, that we’ll manage to limit global warming and the ecological crisis, and that yes, at last, the world is going to get better and better.

But hang on: why is the climate still warming? Why are the oceans still being polluted? Why is biodiversity still collapsing? If every company is doing the right thing, why do all the experts say we’re still heading straight for disaster? Are these companies lying?

In the vast majority of cases, they’re telling the truth. Most of the time, brands aren’t greenwashing in the strict sense. Yes, H&M really is the world’s biggest buyer of organic cotton. Yes, Air France really does plant trees to offset all its domestic flights.

The problem is the kind of commitments these brands make.

Environmental commitments that fall far short

In practice, most of the environmental efforts brands make come down to 2 things:

• eco-design: using fewer resources to make a product  (for example, switching to kraft packaging or using recycled materials…)
• offsetting: paying to support actions that compensate for the pollution emitted, such as planting a tree or funding a charity (e.g. 1% for the Planet)

And honestly, eco-design and offsetting are essential. But they’re nowhere near enough.

First, because eco-design doesn’t always end up reducing resource consumption. Partly because of the rebound effect. The best example is the car. Sure, car engines use less and less energy, but because people drive more and buy heavier and heavier cars, the total emissions from cars keep rising year after year. Another example: if a t-shirt is organic, it’s tempting to think you can buy as many as you like without polluting (spoiler: you can’t).

As for offsetting, it’s far from a magic solution, for plenty of reasons. If you only remember one, it’s that it doesn’t work at scale. For instance, if we wanted to offset all of our CO2 emissions by planting trees, we’d have to plant forests on almost all the farmland in the world today (which means we’d all get pretty hungry after a while).

You might think that, added together, all these actions could eventually pay off. That’s what people call “green growth”: keep the same model and hope technology will save us. It’s true that thanks to renewable energy, energy-related CO2 emissions finally flattened out in 2019. But the road ahead is still very long and very uncertain. In France alone, to stay below 2 degrees of warming, we would have to cut our CO2 emissions by a factor of 5 by 2050.

It’s true that there’s a small chance we could solve the climate crisis without changing the way we live. The whole question is: do we want to take that risk? Imagine turning up with your whole family in front of a rickety old plane, and the pilot tells you there’s a 30% chance of landing in one piece. Would you get on board? Even with a 50% or 80% chance of arriving safe and sound, nobody gets on that plane with their family.

The only way to tackle climate change is to produce less and consume less. Whatever we’re told, whatever technological solutions get waved in front of our eyes, there’s one equation we will never be able to change: to produce is to pollute. As an open letter from 1,000 scientists in Le Monde just reminded us, “Our current way of life and economic growth are not compatible with limiting climate change to acceptable levels. Continuing to promote superfluous, energy-hungry technologies [...] is irresponsible at a time when our lifestyles need to move towards greater frugality.” In short, talking about eco-design or offsetting without tackling overproduction is like putting a plaster (with little cartoons on it) on an amputated leg. It’s better than nothing, but it won’t solve the problem.

To fight this overproduction and overconsumption, here’s what brands can do:

• Offer products or services that save resources, such as lighter cars that use less energy (and not yet another SUV model).
• Make products last longer: a real innovation would be phones that are easier to repair, for instance, not phones with a third camera lens
• Stop pushing people to consume: that means an end to promotions at every turn, to dark patterns designed to make people buy, to endlessly refreshed collections that keep desire alive, and so on.

All these brands that care about the environment, that have created so many “CSR manager” jobs, that invest so much in the subject, must surely be reaching the same conclusions.

So why don’t they tackle the problem of overproduction and overconsumption?

Why brands don’t tackle the problem

It’s true that in some specific cases, a brand’s genuine environmental commitment can be a competitive advantage. If it weren’t, brands like ours, 1083 or Les Récupérables would probably never have seen the light of day.

But in most cases, it isn’t: tackling overconsumption and overproduction is bad for business.

Making more sustainable products (in other words, products that last longer or use fewer resources) means selling fewer of them. No longer pushing people to buy, by cutting back on promotions or flashy adverts, inevitably means lower sales.

And above all, offsetting and eco-design are the actions that consumers see most. Brands can easily turn them into marketing arguments to sell more: nothing like a nice bit of eco-friendly packaging to soothe customers’ eco-anxiety. They’re also a way to attract young talent: the growing awareness among young employees is a real headache for polluting companies, which are finding it harder and harder to recruit.

As a result, companies tend to drop the actions nobody sees, even though those are precisely the ones that matter for reducing a company’s environmental footprint. In fact, the company that makes the least environmental effort is the one that makes the most money. This is what the economist Gaël Giraud calls the “reward for vice”.

So yes, making real environmental efforts is worse for business. But Coca-Cola, Danone and the other giants are hardly on the verge of bankruptcy. If anyone can afford to accept slightly lower profits without having to shut up shop, it’s them. And after all, they’re made up of human beings, who are just as worried about the climate as we are. So why do they never agree to a bit less growth or a bit less profit, in the name of everyone’s survival?

The financialisation of companies

If you’ve been following our previous adventures, our first hypothesis won’t surprise you: the problem is finance.

It’s true that today, nearly three quarters of the shares in French companies are held by financial institutions (asset managers, index funds, private equity funds…). And even when these financial entities don’t own 100% of a company, they can impose their vision on its executives through their voting rights on the board, and they also push those executives to chase ever more growth through “stock option” schemes.

And it’s true that what these financial entities are after, above all, is a financial return. They may claim otherwise, but at best, they will only push companies towards the environmental efforts that can help them grow: eco-design or offsetting. What investment fund would ever accept a company fighting overproduction if that hurt its financial performance?

The only companies that can afford to accept lower profits in the name of protecting the environment or social justice are the ones run by human beings, not the ones under pressure from a cold financial entity. Tellingly, the companies recognised as the most environmentally committed are very often independent, family-owned or cooperative businesses: Enercoop in energy, Fairphone in phones, La Nef or Crédit Coopératif in banking, Camif in furniture, Biocoop in supermarkets, MAIF in insurance, and so on.

Even with the best intentions in the world, a financialised company will struggle to take the environmental actions that really matter.

Except there’s a catch.

If we look at our own sector (ready-to-wear clothing brands), very few companies are actually financialised.

Of course, there are a few examples of French brands that have been transformed under financial pressure: Vivarte (Caroll, Kookaï, La Halle aux vêtements…), bought out by three successive funds since the 2000s, which has since had to close lots of shops and cut 7,000 jobs. Or Dim, bought out by two successive funds, which moved part of its production abroad. And then there are the many fashion brands bought by the fund Experienced Capital, which makes no secret of pushing its brands to grow, in particular by opening dozens of shops in record time...

But the vast majority of fashion companies are still family-owned groups, including the giants of fast fashion.

Now of course, some of these brands are partly listed on the stock market or have let investment funds into their capital. And they clearly feel the pressure too  – or put it on themselves, since their personal fortune is directly tied to the share price.

But still, these families remain in control of their companies. The fashion industry should therefore have been a model sector. These families may one day hand their business down to their children, so you’d expect them to take a very long-term view, with no pressure to grow ever bigger, ever faster. And their name and reputation are on the line, so you’d expect them to be careful about the quality of their products, the working conditions of the people who make them, and their environmental impact.

Yet almost all of them, to varying degrees, have copied the destructive fast-fashion model: moving production abroad, ultra-fast collection turnover, declining quality, and new shops opened at a relentless pace.

How did these families get swept up in this race for growth?

The cult of growth at any cost

Let’s go back to the families listed above and take a look at their bank accounts:

In short, it’s fair to say that one more euro in their bank account isn’t going to change their lifestyle much.

And these people know it perfectly well. Amancio Ortega, the richest man in Spain and founder of Zara, says so himself: “I just want a normal life, to be able to sit quietly in a square and have a coffee with my wife without anyone paying attention to us.” He admits that earning more money won’t make him any happier.

And yet it’s the same man who set out to conquer the entire world and cover the planet with Zara shops, imposing his fast-fashion model on the rest of the industry.

So what’s going on in his head?

Actually, he gives us the answer himself:

“Even when I had nothing, I dreamed of growth. Without growth, a company dies. At 72, I still think the same thing: you must never stop growing."

For him, the optimal size of a company is necessarily its maximum size. Never mind if employees are buried under work. Never mind if that growth comes at the expense of the clothes’ quality. Never mind if it turns every city centre into the same row of clone shops. Never mind if it contributes to climate change.

This belief is not only dangerous, it’s largely wrong. First, people often forget the diseconomies of scale that big companies suffer from (communication problems, ever heavier processes, internal politics, inertia…) and that put them at a disadvantage against smaller ones. But above all, the world is full of counter-examples: perfectly viable companies without growth, which aim not to do “more” but to do “better”. They focus on innovation, on improving their products and services, on the well-being of their employees or their communities, without trying to increase their turnover at any cost. To start with, there are millions of craftspeople and local shops, like your neighbourhood baker, who has probably sold the same number of baguettes and croissants for years while being perfectly viable economically. There are also those small and medium-sized businesses that are a hundred or two hundred years old and still around without ever having grown out of all proportion. There are also the tech companies that chose not to make growth their goal, such as Basecamp, Buffer and Wistia. And there are even all those successful companies that have deliberately chosen not to grow, in order to protect the environment or their employees’ well-being.

So the forced-march growth of clothing brands isn’t only imposed by the financial system. Above all, it comes from a belief that is widely shared today: that you have to grow at any cost. “Grow or die”. “The bigger the better”.

How to get companies to stop dreaming only of growth

So why does a man whose real passion is lounging on a café terrace sipping the cheapest drink on the menu believe that the bigger a company is, the more successful it is?

Let’s be honest: that’s what most people think.

Because we live in a world where growth and success always go together, and where the big company is glorified. As a result, the people who built them and the people who run them are held up as role models for the rest of society.

The media celebrate record fundraising rounds and spectacular stock market listings. Here and there you can read that the holy grail for a company is to become a unicorn, in other words to be worth a billion euros.

The best-selling business biographies are the ones glorifying the people who built empires like Nike or Apple, and those books don’t dwell on the catastrophic consequences of their “success”. And in business schools, students pore over case studies of these big companies and the recipes for their “success”.

In short, like you and us, Amancio Ortega is exposed every day to images that equate success with growth. No wonder he thinks his company always has to keep growing.

So if we want companies to rethink their ambitions, and Amancio to finally enjoy his coffee in peace without secretly planning to conquer (even more of) the world, we need to change our idea of what success looks like.

Good news, Amancio: these ideas are (slowly) starting to change.

But for our definition of success to change completely, it’s going to take time…

So what do we do in the meantime?

At Loom, as we’ve explained before, we decided not to take money from any investment fund that might push us too hard towards growth. But as we’ve just seen, that’s not enough. Even with the best intentions, anyone can get drunk on growth.

So here’s what we’re trying to put in place:

1/ a company culture of “non-growth”. We don’t refuse growth, but we don’t make it a goal. It has to be the consequence of solid fundamentals: satisfied customers, healthy relationships with our suppliers, quality products, motivated people working with us. For example, launching Loom abroad doesn’t interest us. Neither does building a network of shops across the country.

2/ safeguards. We’ve thought about it carefully, and we believe we’ll always be less tempted to chase growth at any cost if we have nothing to gain from it. So the most effective thing, in our view, is to cap our salaries so that nobody ever earns more than 5 times the minimum wage. What’s the point of hitting a billion in turnover if it changes nothing on the bottom line of our payslip?

We’re not saying every company should do exactly what we do. But many of them do need to change their philosophy. Of course they need to be profitable and pay their employees, their suppliers and their taxes properly. But once that profitability is reached, the people running companies need to stop talking about growth targets and start trying to do things better.

We need to stop celebrating growth figures and start celebrating a customer who says thank you, an employee who’s glad to get home a little earlier, or a supplier relieved to be given a longer production lead time. We need to give up doing more and simply want to do better. We need to choose between conquering the world and improving what is within our reach. It’s time success was measured not in money but in positive impact. And time for companies to work for the common good, not to make a handful of people richer.

And the great thing is, we’re far from alone in thinking this way. As we said earlier, all over France and around the world, there are thousands of companies that are useful to society, profitable, and not chasing growth at any cost. Theirs is the model that deserves the spotlight.

Today, they are still the exception.

Tomorrow, they need to become the rule.

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Who are we to say this?

You're reading La Mode à l'Envers, a blog run by the clothing brand Loom. The textile industry is in a sorry state, and the planet is footing the bill. So whatever we manage to understand about this industry, we try to explain here. Because making clothes that last is good, but revealing, sharing and inspiring is even more powerful.

If you like what we write and want more, subscribe to our newsletter by clicking here. We promise: we write rarely and we never spam.

P.S.: By the way, if you know of companies with this kind of philosophy or commitments, tell us about them here. We’d like to make a list of them and find a way to put them in the spotlight.

P.S. 2: We had the chance to share this vision at TEDx Université de Tours a few weeks ago. Have a look at the video and tell us what you think in the comments.