Zalando publishes second Sustainability Progress Report and shifts towards scaling initiatives

In 2019, Zalando outlined its vision to become a sustainable fashion platform with a net-positive impact for people and the planet in our do.MORE strategy. At the core of the strategy are six concrete goals across the categories of planet, product and people, which we have set out to complete between 2023 and 2025.

As we share our journey in the 2021 Sustainability Progress Report and conclude a second year of working towards these targets, Zalando’s Sustainability Director, Kate Heiny, talks about where we are making headway and which hurdles lie ahead.

What have we learned from the first Sustainability Progress Report in 2020 and how are we advancing in the 2021 edition?

There has been a great response to the transparency with which we have been sharing our story and the challenges that we are facing. This is something we are working hard to continue and dive deeper with. The 2021 edition shows an even clearer picture as we start to see results from the plans we have put into action. I think it is useful to all in the industry to provide this level of transparency as we all work together on driving positive change. We will continue to share progress, as well as what the journey ahead looks like, and, in a humble manner, ask our brand partners, industry collaborators, and our customers to join us on our journey.

We have set ourselves ambitious goals to reach by 2023. Where do we stand in reaching these targets?

Timewise, we are roughly at a half-way point and we are confident in our efforts. The first couple of years have been focused on setting the foundation and making sure that we have credible initiatives, laying the framework for what will come. We stand in different places with different targets. In some areas, like circularity, we are working with a system that doesn’t exist yet.

One target where we have made a lot of progress on is our Gross Merchandise Volume (GMV) target. By 2023 we aim to have approximately 25% of our GMV come from more sustainable products. We have spent time onboarding more sustainability-focused brands who can offer a larger range of more sustainable products, as well as working with key partners to expand their sustainability offerings.

Is Zalando’s sustainability strategy focused on our own efforts or does it also extend to the way we work with partners?

If our aspiration is to be a sustainable fashion platform, it is about the actions that we do, but also the ecosystem and partners that we work with.

We have targets that are specific to Zalando and specific to our partners. One example is in the Planet pillar: we have targets for ourselves to reduce our carbon footprint, but we also have targets for our brand, logistics, and packaging partners, to set science-based targets. We want to lead by example, but we need our partners to also participate in order to see a change.

Which of our targets poses the biggest challenge?

If you look at our target of applying the principles of circularity to extend the life garments, we managed to extend the life of 2.3 million products in the first two years. We have a long way to go and face significant challenges for a variety of reasons — the recycling technologies are latent and just emerging now, so the timeline will be longer for any of those products to count towards that goal. Our circular design criteria will take about a year and a half to be implemented before a product comes to market, so there are long lead-times between the actions we take and when we actually get to take credit for extending the life of those products. Our private labels and partners are already designing collections for Spring/Summer 2023, which means that products with our new criteria will not be available at scale on Zalando within this year.

Still, there are ways in which we are using our own infrastructure to help reach this goal. In our Attitude-Behavior Gap Report, released in 2021, one of the biggest gaps that comes to mind is that 61% of customers said that secondhand is a good way to shop more sustainably, but only 25% do so routinely. What we see there is an opportunity to use the Zalando model of bringing the fitting room to your home and having quality control on the back end to improve the experience of buying secondhand. In our Pre-Owned assortment we provide products that are easily accessible at the level of convenience our customers are used to from our Fashion Store.

The bottom line is that we’ve learned a lot during this time, but we still have a long way to go. We have to address challenges on all circularity stages. But we cannot do this on our own – this needs to be a collective effort.

Packaging is one of the most visible ways that customers experience waste. What changes have been made there over the last year?

It is first and foremost about reducing waste. Currently the polybag, the wrap around the product, is the biggest source of single-use plastic packaging that we are looking to reduce in different ways. For instance, if you fold an item a different way then we can cut the amount of polybags needed by roughly 50%. By implementing this for certain product groups in our private labels, in 2021 we avoided 69 tonnes of single-use plastics. Still, eliminating these bags completely or finding a suitable replacement is a difficult hurdle to overcome. This is an industry challenge that we will never conquer alone. But we will use our position to push the industry forward.

On the other hand, we are near completion for switching over plastic shipping bags to paper, which represents a significant decrease in single-use plastic. As the global trend is moving towards paper, away from materials like plastic that resist natural decomposition, it is important that we are sourcing recycled paper or paper from responsible sources. We have joined an industry initiative called Canopy Packg4Good, committing that we will not source any paper from endangered or ancient forests.

Of the 68,000 tonnes of packaging materials we used in 2021, 89% came from recycled input and 99% was recyclable.

Do customers really care about sustainability when buying fashion?

Definitely. This was supported by the findings of our Attitude-Behavior Gap Report, but is also something we see in our Fashion Store data. In 2019 we saw 18% of customers making purchases from our sustainability assortment. By 2020, we saw this number increase to 50% and by the end of 2021, it was at 60%. We have expanded our assortment, but we also see customers making these choices.

What will play a big role for Zalando’s sustainability efforts in 2022?

One priority for Zalando in 2022 will be reducing empty space in packaging, minimizing packaging waste, and completing the transition of plastic to paper shipping bags.

We’ve set the foundations across our six goals; what we need to do now is continue to scale, so that we can meet them. There are a few big steps that we need to take in order to overcome our remaining challenges. We won’t meet our goals by incremental change. But we will not make trade-offs for speed. Our goal is impact, not speed. We need to reach out to our partners to see what collaborative efforts will help us advance more quickly and find solutions together. For sure in 2022 we will work even harder to achieve our sustainability objectives and to help customers make choices that reflect their values.