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Is the fashion industry fashionably late on tackling diversity?

According to a new report, the fashion industry still remains biased towards white men, and employees of colour in the industry feel like they don't belong. Inequality in fashion is a systemic issue that will require collective action.

Unfortunately, the fashion industry is not synonymous with innovation. In fact, it often relies on old, but exclusive legacies, that are rarely open to change. At the same time, fashion has been one of the hardest hit industries by the Covid pandemic. But as with every crisis, new opportunities arise. As the fashion world recovers, it will have a chance to build a system that allows everyone, not just a few, to be part of it.

In its most recent report, the Council of Fashion Designers of America (CFDA) highlights how the fashion industry still remains biased towards white men. The CDA interviewed over 1,000 industry employees and found that almost 60 per cent of respondents believe that their companies have taken action in response to racial injustice. However, of those who report that their companies have taken action, less than half (44 per cent) believe that this will result in permanent change.

More troubling is that employees of colour in the fashion industry feel like they don’t belong. Black employees in particular point to an environment of non-inclusive conduct. Almost a quarter (23 per cent) observed biased behaviour on a frequent basis, with race/ethnicity and physical appearance being the most common biases.

Almost a quarter of Black employees (22 per cent) disagree on the fairness and objectiveness of hiring criteria. This perception is primarily due to unconscious bias and the reliance on referrals. Only 11 per cent of Black employees have found a job in fashion through friends or family members versus 26 per cent of total respondents.

Finally, Black students shared the view that Black culture was put forward because it is trendy right now and brands are only trying to capitalise on this trend. Another issue that came from the report was an economic one.

37 per cent of black employees reported that they have to supplement their income, compared to just 23 per cent of their white counterparts. The study also found that the low-paying nature of internships could also affect black employees’ subsequent chances of employment.

This all poses the following question. Is the fashion industry fashionably late on tackling diversity?

What Do We Say?

Diversity is an increasingly important issue for corporations as we transition towards a more equitable society. In our most recent analysis, we examine and link the effects that diversity has on companies’ financial performance.

In our analysis, we focus on gender diversity and specifically look at the percentage of women at different levels of an organisation, including the board, management, and the overall workforce. These metrics capture the current diversity of the company rather than stated policies, providing good insights on the impact of a diverse workforce. Over the period of study, more gender diverse firms outperformed the universe, while less gender diverse firms underperformed.

Moreover, our results highlight that gender diverse companies are substantially more likely to disclose greenhouse gas emissions data.

As Kofi Annan used to say: who cares wins!

What Does It Mean?

Inequality in fashion is a systemic issue and structural changes need to happen within the broader ecosystem. Collectively, individuals, companies, and the industry-at-large should take actions to address the root causes of such inequality.  

In particular, individuals have to change their day-to-day actions and thinking and companies need to drive organisational changes within their talent pipeline and with employee retention efforts. Furthermore, the industry-at-large must coordinate an intervention that involves all the players from influencers, associations like the CFDA, fashion schools, coalitions of companies, agencies, and funding sources.

Concluding with the words of a Black fashion executive: “At the end of the day, we want access to people, we want to be part of a community, we want to tell stories, and we want to be part of the history”.

Arabesque is a global group of financial technology companies offering sustainable investment, advisory, and data services through advanced ESG and AI capabilities.

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