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20 June 2018

Counterfeit Goods Are Undermining Sustainable Brands

Increasing global awareness about how humans are damaging the planet is driving powerful new changes in consumer behavior. Millennials and Gen Z consumers, in particular, are demanding that companies adopt sustainable and ethical methods of production.

The call for greener, more sustainable manufacturing and packaging has important implications for brand loyalty — and it's growing daily thanks to headlines warning that businesses, and fashion and apparel companies in particular, are prime culprits in the waste of precious natural resources.

No denying it

Today the glaciers are melting at top speeds, sea levels are rising at the fastest rate in 2,000 years, and the concentration of carbon dioxide in the atmosphere reached the highest in recorded history in 2016.

Setting aside the notable holdouts among world leaders, a Gallup Poll surveying citizens in 128 countries found that an overwhelming majority of consumers see global warming as an immediate threat to themselves. In Japan, for example, 99% of the population reports being aware of climate change as a threat. Awareness is similarly high in the U.K. (97%) Germany (96%), France (93%), and Italy (84%).

For premium and luxury fashion labels, the growing awareness of global warming is driving broad new interest in sustainable and ethical business practices, and particularly among younger consumers.

And that trend has important implications for the fight to stop counterfeit.

Counterfeits hurt sustainability

While even legal industries can be damaging to the environment, counterfeits can be manufactured with far less oversight. And with no brand reputation to protect, fake goods are likely to be made using the cheapest materials and methods possible: with no oversight from a legitimate brand, and no one on the hook for dumping toxins into the air, water, and soil.

A factory making genuine Louis Vuitton bags, for example, is under contract to follow brand guidelines. It must follow local environmental laws, and it can expect government regulators to check in to make sure everything is on the up-and-up. That won't be the case for criminal groups making counterfeit Louis Vuitton bags, who report to no one and have no reputation to protect.

Profits before purpose

Because counterfeiters operate under the radar, the harm they cause is difficult to measure. But there have been enough cases to paint a broad picture of greed, opportunism, and unchecked environmental damage:

*  The United Nations Office on Drugs and Crime warns unregulated air pollution from counterfeit manufacturing is causing an unknown and possibly devastating effect on greenhouse gases -- gases that are already at an all-time high. 

* Insurers are sounding the alarm that substandard and dangerous chemicals used by counterfeiters are endangering consumers and in some cases entire ecosystems, creating massive new sources of legal liability for brands that don't actively combat their sale.

* If that's not bad enough, chemicals that are banned from legal production companies, such as certain insecticides, are known to be used by criminal manufacturers and persist in ecosystems and cause damage throughout the food chain, threatening the overall sustainability of agriculture worldwide.

Who will clean up? 

The danger of counterfeit goods to the environment is not just in the manufacturing process. The fact that we have yet to identify and target these illegal producers means that there is no one to blame, and subsequently force to clean up this environmental damage. The legal recourse for pollution in local ecosystems is non-existent, so no one can be forced to take responsibility and fix the mess. 

Then there is the problem of disposal for fake goods seized at borders and taken off the market.

To give you an idea of how much of this “garbage” is collected and destroyed by authorities: In 2011, customs authorities in the European Union alone seized some 115 million items ranging from sunglasses, bags, and shoes, to medicines, electronic devices, batteries, refrigerants and pesticides. Over 75 percent of these goods were destroyed, and the main method of destruction is burning.

High temperature incineration is common for disposing of toxic substances,  but it generates air pollution and hazardous waste. That means all of the unknown chemicals used to make seized fake goods go up in smoke that further pollutes the air.

Be part of the solution

In a world that scientists warn is quickly deteriorating because of human behavior, the counterfeit trade adds one more dangerous level of destruction to our eco-system, at the particular expense of brands and consumers committed to improving sustainability.

Turning a blind eye to the problem, instead of embracing new best practices for stopping the sale of counterfeits, allows the fraudsters to prosper, leaving a  dirtier, more toxic planet for ourselves and future generations.

Fighting Fakes for the Planet: Product Authentication

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