Retailers wear the cost of sustainable process in UAE

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• Policy reforms are needed
• Clothing recycling weighs on retail
• UAE discards 210,000 tonnes

Retailers in the UAE are shouldering the financial burden of adopting sustainable practices to stay competitive, but policy reforms are needed to back their long-term environmental goals, an executive of the Gulf’s largest clothing company has said.

Gaps in existing regulations include a lack of sufficient incentives, tax breaks and a comprehensive framework to enable apparel companies to recycle textiles at scale, said Rajesh Garg, group chief financial officer of Landmark Group.

“It’s an expensive proposition to take back, recycle and put it back into our product,” he told AGBI.

“There is a huge cost I have to pay to put a box in my store to collect my own products. I need permission to collect our products without having to pay additional licensing fees.”

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Landmark has about 2,800 collection boxes across its stores to collect used clothing, which it then sends to its own recycling facilities in Dubai or Asia. 

Some products are re-used and others are converted into fibre to make new clothes.

Polluting industry

The fashion industry is one of the most polluting in the world and contributes to about 10 percent of emissions globally, more than all international flights and maritime shipping combined, according to the World Bank.

Clothing materials can take more than 200 years to biodegrade. If demographic and lifestyle patterns continue as they are now, the fashion industry’s greenhouse gas emissions will likely surge by more than 50 percent by 2030.

Figures from Abu Dhabi Waste Management Company Tadweer show that the UAE’s textile consumption is about 500 million pieces annually, of which around 210,000 tonnes end up as discarded material

Of these, up to 90 percent end up in landfills which release methane, a greenhouse gas that contributes to warming and climate change. 

Ali Al Dhaheri, managing director and CEO of Tadweer, said textile circularity plays a significant role in the UAE’s environmental and sustainability goals.

Statista figures show revenue in the UAE apparel market is projected to be $10.25 billion in 2023.

Garg said despite studies indicating customer willingness to pay a premium for sustainable products, this trend has not yet been reflected in sales. 

A 2022 survey of 2,000 people across the UAE, Saudi Arabia and Kuwait by 4SiGHT, a Dubai-based market research company, claimed 68 percent said that they would pay more for an item if the company selling it demonstrated sustainable practices.

“For now, we don’t see that,” Garg said.

“It’s a big cost on us and we are selling at the same low prices because we want to do the right thing. But we need to see this shift.”

A Bain & Company survey last month said 50 percent of Gulf consumers listed sustainability as one of their top four key purchase criteria when shopping.

However, when asked to determine which of two given products generated higher carbon emissions, consumers were wrong or did not know about 75 percent of the time.

Dr Mohamed Althaf, director at Abu Dhabi-headquartered retail conglomerate Lulu Group International, said that although sustainability comes with increased cost, it also drives companies to look for savings in other areas of operations.

“We cannot pass that cost on to our customers,” he said. 

“At the same time, there is a lot of commercial sense in becoming sustainable. For example, we saved 20 percent on our energy costs in our buildings, which was hugely profitable for the company.”

Althaf added that the cost of retailers making the transition to green practices is inevitable.

“We are committing voluntarily because it’s only a matter of time before regulation comes in,” he said.