Investigating greenwashing and integrated reporting of SMEs in the fashion sector
Juliana Villegas Restrepo, Master of Sustainability in the Fashion and Creative Industries, Akademie Mode & Design Berlin, conducted research for her thesis using Wikirate.
We asked Juliana about her investigation and experience using the platform. Here is what she had to say:
1. What is your research about?
The fashion industry’s Small and Medium Enterprises in Europe employ 8 out of 10 people and are worth 70% of the industrial turnover. My research, “Breaking off greenwashing in the fashion industry: Providing impact disclosure for all stakeholders,” highlights SMEs’ role in shifting the business paradigm towards sustainability and provides guidance on creating sustainable reporting.
Recently, there has been an increase in demand for non-financial reporting from all participants in the fashion sector, including SMEs. However, the lack of regulations and guidance for this critical portion of the ecosystem means the reporting requirements remain unclear, which can lead to greenwashing and miscommunication issues with different stakeholders.
The research aimed to help SMEs mitigate greenwashing risks while measuring the value creation of sustainable strategies for companies. The outcome is a set of guidelines for SMEs in the fashion industry to help them create precise and accurate sustainability reports. Likewise, I developed a financial metric on Wikirate to measure the value of sustainability strategies for the company.
2. How did Wikirate help you to do your research approach?
Wikirate helped from different perspectives. First, the comprehensive database of fashion company reports helped me analyze and identify the industry’s front-runners regarding sustainability business models and reporting. Furthermore, I used the platform to compare and benchmark multiple brands in order to develop a definition of greenwashing.
Secondly, using the Fashion Transparency Index 2022 underlying data and scores, I identified significant industry pain points regarding -risks and sustainability, representing the challenges that SMEs face in staying competitive in the market. Wikirate’s provision of open sustainability data and industry comparisons made defining specific metrics to be included in the guideline easy.
Finally, a valuable conversation with Aileen Robinson from Wikirate was conducted. In this interview, Aileen shared her experience and knowledge about the topic, ratifying that Non-Financial reporting represents an opportunity for SMEs. Companies have the chance to build a market advantage and use sustainability reporting as a strategy to stand out over their peers.
3. Did your research findings match your expectations, or were they different? Please explain.
One thing stood out: even though innovation and good intentions are present at the core of many SME businesses, sustainability reporting remains voluntary and needs more standardization, consistency, comparable metrics, and integration with financial results.
SMEs represent a crucial part of the fashion industry value chain and are essential to reach the SDGs and sustainable development in the sector. Therefore, the development of a guideline specifically for them would help companies on the road to creating consistent, comparable, transparent, and integrated sustainability reporting.
4. In what ways could Wikirate help other students in their research?
The open access to a vast database of corporate sustainability data can be useful for research purposes!
In addition, students can compare the sustainability performance of different companies within the same industry or across industries. Students can analyze and interpret the data to draw insights and conclusions about the sustainability practices of the companies they are researching, with reliable and trustworthy data that a community of experts has verified.
5. What would you say to others considering using Wikirate to research greenwashing?
First, the collaborative community feature of Wikirate represents a valuable resource when researching greenwashing, as any researcher can tap into the expertise of others to help interpret the data and identify potential instances of greenwashing. In addition, the platform provides tools for visualizing data, which can help to identify trends and patterns in the data and can make it easier to communicate your findings to others.
Wikirate also allows the comparison of the sustainability performance of different companies, which is fundamental to identifying discrepancies and potential instances of greenwashing with accurate, transparent, and reliable sources of data.
Finally, the platform eases the learning process of sustainability reporting and the issues surrounding greenwashing. This can be useful for your own personal development, as well as for future career aspirations.