Hong Kong has the potential to become a sustainability education hub for apparel makers and firms in the fashion industry supply chain, according to tycoon Victor Fung Kwok-king.

The city has the opportunity to create yet another industry, to train people on implementing sustainability and environmental, social and governance (ESG) practices, one that will put Hong Kong on the global map, Fung, the honorary chairman of supply chain management conglomerate Li & Fung, said in an interview.

“We can set up a whole series of courses and make an industry out of training in Hong Kong,” Fung said.

Li & Fung, together with professors and researchers from universities in Hong Kong and abroad, last week organised a workshop on integrating sustainability in the entire supply chain from innovation to day-to-day operations, for 30 representatives from garment factories and retail brands around the region.

The workshop was part of Li & Fung’s fashion tech summit, which was organised under the theme of sustainability as a competitive advantage.

The global fashion industry produces nearly 20 per cent of waste water and about 10 per cent of carbon emissions globally, according to the United Nations Economic Commission for Europe. A truckload of discarded clothes is burnt or sent to landfill every second around the world, according to the Ellen MacArthur Foundation. A sustainable fashion industry would go a long way in alleviating the adverse impact of climate change.

Once Hong Kong becomes a training base for sustainability in the fashion industry, the long-term goal should be to set up globally acceptable standards for sustainable manufacturing practices that can be applied to thousands of factories around the world, Fung said.

“We [can create] yet another industry; it is one that the world needs, and one that will put Hong Kong in a highly visible position globally.”

Participants at the workshop identified pain points holding back sustainable practices in the fashion industry. They said the sector needs a structured innovation framework, closer collaboration to align on sustainability goals and best practices. They also highlighted difficulties in finding compliant suppliers, particularly for high environmental standards, and the need for unified efforts across the supply chain.

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Education is about inspiring people, to help them come up with ideas and to apply these ideas in the real world, Charles Fine, professor of management at Massachusetts Institute of Technology, said in an interview on the sidelines of the fashion summit.

Hong Kong is a hub where it can all come together, Fine said. “You have manufacturing [taking place] all around Hong Kong; you have the knowledge and you have the motivation. When you put those pieces together, it’s a powerful recipe.”

In June, the International Finance Corporation (IFC), the investment arm of the World Bank, provided a US$75 million loan to Li & Fung and its supply-chain fintech affiliate Air8, with an environmental and social focus to facilitate funding to vendors to create a more sustainable supply chain.

The loan is to support the working capital needs of Li & Fung and Air8 in expanding their supply-chain solutions and financing services for apparel and general merchandise suppliers, particularly small and medium-sized enterprises.

IFC’s support is expected to add many new suppliers to Li & Fung’s network, according to the company.

“The developing economies are now really moving into a new phase of globalisation,” said Fung. “If we can help manufacturers set up their production that is sustainable and ESG compliant, I think we will have made a small contribution, one that helps the global movement on sustainability.”

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