Sustainability is ‘increasingly impacting’ the economics of the fashion industry, despite leadership attention waning, a new report by Boston Consulting Group (BCG) and Global Fashion Agenda (GFA) has said.
The report, Fashion CFO Agenda 2026: Building Financial Resilience Through Sustainability, explores the opportunity for chief financial officers in the fashion industry to integrate sustainability into financial planning, procurement, reporting and investment decisions, amid growing climate-related risks and regulatory pressures.
As it notes, climate-related disruptions have already led to price spikes for cotton and wool, while textile-related extended producer responsibility fees could reduce net profits by around 4% by the end of the decade.
At the same time, the report highlights the economic upsides to sustainability, noting that around 70% of sector-related emissions could be reduced at a low cost – or even leading to cost savings – while sector-based circular economy models have in some instances generated double-digit revenue growth for brands.
‘Fundamental disconnect’
This is increasingly a missed opportunity for executives, however, with C-suite focus switching away from sustainability to more immediate pressures, such as addressing slowing growth, AI adoption, and geopolitical volatility.
‘This creates a fundamental disconnect in the boardroom: while sustainability may feel less urgent, its financial importance is growing. And that puts it at the core of the CFO agenda,’ the report notes.
‘CFOs who integrate sustainability into finance can master risk and costs and unlock value creation. In our research, most fashion CFOs reported that sustainability is not fully embedded across the organisation, nor is it properly captured in financial indicators and other performance metrics.’
As the report notes, sustainability is increasingly influencing costs, operations and long-term competitiveness, however this influence is not yet fully embedded into financial indicators or performance measurement calculations.
Sustainability approaches
The study identifies four broad approaches being adopted by fashion CFOs, depending on a brand’s sustainability maturity and strategic ambition: ‘risk mitigator’, ‘cost optimiser’, ‘commercial driver’, and ‘transformation enabler’.
‘As the economic impacts of sustainability topics intensify, brands may need to change their financial approach to sustainability to stay economically viable,’ the report notes, adding that the CFO can only succeed on integrating sustainability if he or she has sufficient support from within and outside the organisation.
‘The shift is clear: sustainability is now operational, material, and measurable. While the CSO sets the direction, the CFO enables execution.’ Read more here and here.
