Fashion Retail, Stock Market And Sustainability: a Covid-19 perspective

Resumo

The fashion industry has long been criticized for its social and
environmental impact. To address this problem a new sustainability
index has been proposed by the Business of Fashion. This
article discusses the relationship of this index with investments
performance of fashion listed companies within a Covid-19 background.
The main reason why this study was carried out is
because sustainability has long been presented as a basic requirement
for the survival of companies in the future. However, the
level of commitment with sustainability of the biggest players in
this industry varies considerably and, in the first BoF first report,
scores were low. The question that this context rises is: should
investment decision be based on this index? To pursue the goal
of analyzing the relationship between the sustainability score
and the financial performance, the recently created Business of
Fashion (BoF) sustainability index is compared to the earnings
per share (EPS) disclosed annually. The companies researched
are: Kering, PVH Corp, Hermès International, LVMH, Richemont,
H&M group, Levi Strauss & Co, Inditex, Gap Inc, Fast retailing,
Nike, Puma, VF Corp, Adidas and Under Armour. The analysis
indicates a lack of correlation between the index and the earning
per share (EPS) of the studied companies. However, the existence
of an outlier, which has the lowest score and the worst earning
per share (EPS) could be considered as an indicator that if there
is no guarantee that lower levels of sustainability mean low
returns, investing in companies that disregard sustainability
might mean bad investment decisions. This paper contributes to
two research areas: sustainability and investment decisions by
300 Organizações em contexto, São Bernardo do Campo,
providing a comparison between a sustainability index and the
earnings per share (EPS) of fifteen listed companies.