Last December, I put some emphasis on the rising importance of collaboration. It has been good to see our senior industry bodies working together so closely on a wide number of topics. The big highlight was the powerful Leather Manifesto, which more than 30 leather bodies from across the globe signed before both the COP26 and COP27 events.
So, it was interesting to see that the recent Davos World Economic Forum meeting chose “collaboration in a fragmented world” as its theme. It was a surprise this meeting went ahead with its private jet environmental cost and largely unelected elites trying to set the global agenda. But, if there was some value in political leaders and senior businesspeople interfacing this year, it was showing the theme to be well chosen. The arrival of China with a large delegation indicating that “China is open for business” was almost enough in itself.
There is no doubt that the world economy is suffering from reduced trade, and the poorest nations will suffer the most. Running multiple supply lines for insurance costs trillions of dollars. National priorities and allegiances are changing, and not helped by the U.S. appearing to step away from any comprehensible international trade policy.
The new administration has continued the Trump protectionist policies only more politely. It is as though America is trying to emulate China’s approach and is asking countries to choose sides. In areas such as Africa, it has given up its global leadership role while the weirdly named Inflation Reduction Act is creating major issues among its Western friends.
Trade maps are being redrawn
Trade routes and manufacturing locations are already changing. The increasing Indian leather business with Russia is surely mirrored in other leather nations such as Turkey, China and Pakistan, while many countries are vying to be the “one” in the revamped “China plus one” approach to sourcing.
China is working hard to create domestic confidence so that their own consumers unlock their savings and start to spend again. Hopefully, both domestic and overseas tanners in China can benefit from this domestic growth. Despite geopolitics, the leather industry has very many good friends in China and, while we cannot change what has happened in Xinjiang or Hong Kong, maintaining and even increased trade will slow thoughts of invading Taiwan.
Asia will remain a major sourcing area for brands
Large amounts of leather goods will still be sourced in Asia alongside an increase from Africa – if the new tanneries and leather-using plants there adhere to good standards of waste treatment and people management. It is important that we help the African leather industry grow responsibly – leather cannot afford new environmental hotspots.
Hides and skins, as well as leather – Moroccan, Russian and the like – have been traded since ancient times and, for countries such as the U.S., Brazil, Italy and China and many others, this needs to continue, continuously adapting to the on the ground political reality.
Collaboration was also demonstrated in Davos in areas like ESG, climate change, work and innovation. Cooperation with others is required to integrate the Sustainable Development Goals into planning, to look towards a realistic net-zero transition with milestones and to make better use of life cycle analyses as we aim for enhanced circularity. LCAs are costly so, for some tanners, their trade associations taking the lead might make more sense.
Better collaboration would help us dig into Scope 3 emissions which have pulled Brazil’s JBS into a court case over their sustainability-linked bonds, with four issuances worth US$3.2 billion announced in 2021. There will be no full escape from Scope 3 for leather, even with the EU Product Environmental Footprint Category Rules for Leather.
Collaboration will be a part of how working life will evolve too with the book title “partnership is the new leadership” identified as a current theme in management circles. Even in leather, the adaptability and ingenuity some tanners used to get through the pandemic will likely have to be extended. Adjusting business models and fitting with various forms of hybrid working will speed up as digital tools and AI become more integrated into everyday life and work.
Keep an open dialogue
The leather industry must keep talking across the world, sharing best practices, pushing for innovation, talking with designers and conversing with the press and consumers. We have spent too much of our recent history in silos, limiting ourselves by sector and geography. Perhaps understandable but lately undesirable. So let us keep the pressure up and not get deflected.
Leather is not 100% perfect and competitive materials are not 100% wicked, and many have big budgets for further improvements. Some we should be thinking of working with rather than defining as enemies; there is not enough leather available to meet all material demands. But we should be re-examining our own research approach and our willingness to look at changes in our technology without seeking out barriers against change.
We have asked if tanners will still be using chromium in 2030, perhaps a question for today is why so few have yet moved away from chrome? What is really holding change back, and how have you tried to overcome it? Time for collaboration.
Follow Dr Mike Redwood on Twitter: @michaelredwood
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