What’s the true price of your jeans?

“I have a lot of clothes that I hardly ever wear. But there was a sale on jeans – buy one, get one free.” Sound familiar? Consider this: the true price of clothing is much higher than what you pay for it. The production of your jeans probably involved pollution, child labour and even slavery. Read here how you can prevent this.

What’s going on with my clothes?

The clothes you buy – such as a new pair of jeans for 80 euros – are actually under-priced. They have hidden costs, which you don’t pay. But the people in producing countries do! How? Their surface water is being polluted with toxic substances used to dye jeans. Or workers in clothing factories are so underpaid that they can’t send their children to school. And some countries even use slavery and child labour. Plus, it takes a lot of energy to produce and transport clothes around the world, resulting in carbon emissions and global warming. Your jeans are so cheap because you don’t pay for all these hidden costs.

If you factored in all hidden costs, a pair of jeans would cost you an average of 33 euros more. 

The Impact Institute calculated this for ABN AMRO (in Dutch only) in 2019. It’s called ‘true pricing’. And it goes not only for jeans, but for almost every article of clothing in your wardrobe.

That’s shocking. How can we prevent this?

The good news is, all of us can do something about this, if we want to. A lot of cotton, for instance, is cultivated by small farmers in India who hardly have any modern machinery and often have little knowledge of agricultural technology. If the World Bank and development organisations were to offer these farmers small loans (called microcredits) and education, they could increase their income and send their children to school.

We can do something about the poor conditions in clothing factories, often located in Bangladesh. This situation is caused by fierce international competition and our demand for cheap clothes, which keep prices far too low. But if Western clothing brands were to stop price competition and build long-term relationships with their manufacturers in Asia, they could exert more influence on working conditions. Our clothes would then probably be more expensive.

Can I help make clothes more sustainable?

Yes, you can fill your wardrobe with sustainable clothing by doing the following: 

  • Wear your clothes longer – To start with, by buying fewer clothes and wearing the clothes you already own for longer. 
  • Buy second-hand clothes – If you need to buy new clothes, check out a second-hand shop first. They’re becoming very popular.
  • Rent clothes – And if you need to wear specific clothes only once, for example for a party, rent them. If you do buy new clothes, be very discriminating when choosing them. 
  • Opt for high-quality clothing – Buy timeless fashion, and only buy clothes you know you’ll wear often – not because they’re so cheap.
  • Pick clothes with sustainability labels – Take note of sustainability labels. Unfortunately, there are too many, and most focus on only one aspect of sustainability. There are initiatives for a future European sustainability label for clothes which address all aspects, including a ‘living wage’ for workers.
  • Recycle clothes – This is important. Right now, clothes are hardly ever recycled. That’s because it’s often hard to break down old clothing into thread for making new. It’s much easier to recycle if clothes are made entirely from the same fabric, such as cotton. So be aware of this when you buy clothes. It would be great if the clothing industry went circular, meaning all old clothes are used to make new clothes. The introduction of the Dutch Circular Textile Valley (DCTV) in ABN AMRO’s Circl pavilion this past May is a great start.

Is ABN AMRO actively involved in this?

Absolutely. Together with a number of clothing brands and other parties, ABN AMRO – the only bank – is one of the founders of DCTV. We’re working together to make the clothing industry in the Netherlands circular, and we’re exploring how we can finance that. And to help prevent abuses in high-risk countries, we always conduct our human rights due diligence and sustainability risk assessment on business clients operating in these countries. This reveals the impact of the loans we grant and the risks of human rights violations. We encourage our business clients to improve, and if they’re unwilling to do so, we terminate the relationship.

We frequently organise events in Circl to accelerate the transition to circular fashion. And sustainable fashion companies regularly take our Business Innovation Workshop.

And what is ABN AMRO doing as a buyer and user of clothes?

Just take a look at our branch offices – from the tables and chairs,  to the cushions and acoustic wall panels, and much more. An estimated ten thousand kilos of old uniforms are used to make new materials, which in turn are used in our new interior design. If you’ve recently visited one of our branch offices, chances are you’ve sat on a chair or at a table made from old uniforms. We’re doing this at many of our branches and head offices. We feel responsible for the things we’ve put in the world, and we’re doing our best to retain their value through re-use. This goes for our uniforms and for our old furniture, too. 

Our purchasing department is pioneering circular procurement. And we’re sharing what we learn – that products (or resources) can be re-used – with the outside world in reports and in tours. To promote circular thinking among our suppliers, we ask them about the impact of the products they make for us and we explore how this can be done more sustainably. We connect large parties with sustainable start-ups that are agile in order to accelerate the transition to sustainability. Our goal? To kick-start a market revolution.

Would you like to know what else we do to build a sustainable, better world?

Check out our sustainability page.

Jan Raes

Jan Raes

Sustainability Advisor

Jan.Raes@nl.abnamro.com +31 (0)20 383 1753