Fashion has become a dirty word – and believe me, it hurts. Not long ago, fashion was the VIP room of popular culture and movie stars and politicians flocked to the front row. Now it has come to symbolise everything that is wrong with the modern world – from carbon emissions to global inequality and from crass materialism to unrealistic beauty standards. Fashion is not the only polluting industry, or the only morally dubious one. But even if you love fashion, as I do, it’s hard to deny that it tracks in the 99th percentile for pretty much all of the most problematic contemporary issues.

Everyone in fashion knows that they need to get back on the right side of history, and fast. Sustainability is a baseline responsibility that every self-respecting brand must be seen to engage with. The New York brand Collina Strada last week staged one of the first live shows of the first back-to-real-life catwalk season on the rooftop of Brooklyn Grange, an organic city farm that donates 30% of its produce to community members with limited means. Much of the collection was made out of “deadstock” – fabric and product that already exists, rather than being newly produced. Clothes made in 2020, which had been stuck in lockdown and never shipped or sold, were cut up and repurposed into something new. “Old birthday presents” were taken apart and reassembled into beaded bags and rhinestone jewellery, said the designer Hillary Taymour. Taymour was rewarded with a benediction in the form of Ella Emhoff, stepdaughter of the vice-president, Kamala Harris, applauding from the front row.

There is a powerful business case for fashion to find its conscience: consumers increasingly demand it. Responsible production has become the hallmark of a respectable brand. To the people of Idaho, Washington and Oregon, who recently endured intense heatwaves, the fact that it takes 2,700 litres of water to produce a single cotton T-shirt in a world where droughts are becoming more common probably feels like more of an urgent issue. LVMH, the world’s biggest luxury group, faces the prospect of carbon emissions from the fashion industry affecting its lucrative alcohol business. “If climate increases a couple of degrees in the next 25 years, then we simply will not be able to make champagne in Champagne anymore … our economic future depends on the climate change being reduced,” wrote Antoine Arnault of LVMH in Womenswear Daily last year.

Sustainability is not a new issue. What does feel very different this time around, as the industry gathers for the first shows and cocktail parties since the olden times, is fashion’s psychological state. Establishment figures are aware that for the first time in their careers, what they do is seen as a bit, well, uncool. This year has seen a steady exodus of editors from fashion magazines to tech. Netflix recently hired editors of Allure and Them, while TikTok hired Vanessa Craft from the Canadian edition of Elle. Silicon Valley doesn’t just have deep pockets: it’s also seen as the place to be.

For years, fashion waved away criticism with the cry that we all need escapism, a defence that rings increasingly hollow against the seriousness of the charges. “Covid and the climate emergency both show that money and luxury can’t protect you from the real world,” the British designer Roland Mouret told me this week. “That fashion fantasy of a beautiful woman in a gown on an exotic beach – I don’t think that resonates now, because that kind of perfection just doesn’t exist any more.” Wilful escapism feels twee and old-fashioned in an age when it is cool to engage. Billie Eilish played out a Marilyn Monroe fantasy on the Met Gala red carpet this week, wearing a fairytale blush silk ballgown by Oscar de la Renta – but in return, the brand agreed to a request by Eilish, a vegan animal rights activist, that it would stop using fur in all collections with immediate effect. That is the stuff young girls’ dreams are made of – these days.

The Met Gala was a glitzy showcase of fashion’s new progressive bent. Alexandria Ocasio-Cortez’s “Tax the rich” dress grabbed the headlines. Versha Sharma, editor of Teen Vogue, carried a clutch bag engraved with the words “Protect Roe / Kill the Filibuster” in response to the Texas abortion ban. Jonathan Anderson, the British designer of the Spanish luxury house Loewe, collaborated with actor and writer Dan Levy to dress him as “a gay superhero” in a polo shirt embroidered with an artwork of two men kissing, which Levy described as a celebration “of queer love and visibility”. In support of the message, Loewe made a donation to an organisation promoting Aids awareness and education.

But although the emotional engagement with social justice and the climate emergency is real, action is not happening at the speed required. (As so often, fashion reflects the rest of the world in this – just in a more exaggerated and exasperating form.) There is still far too much talk of “raising awareness” around sustainability, which with less than three months to go until Cop26 is the equivalent of liking photos of stable doors on Instagram after the horse has bolted. A new report on greenwashing, published this week by Eco-Age and the Geneva Centre for Business and Human Rights, reports that while “all major fashion brands claim to be engaged in sustainability efforts … many are struggling and indeed failing, because they are using a flawed definition of sustainability, unscientific methods and selective implementation”. The report also identifies “greenwishing” – fancying oneself less environmentally harmful than one is in reality – to be a problem in fashion.

By producing too many clothes, the fashion industry has not just harmed the climate, it has also undermined its own status. A dress in the new season silhouette or a pair of boots in autumn’s hot new shade were once aspirational objects. But a two-decade deluge of cheap-as-chips items has left the world disdainful of clothes – and, as a result, tired of fashion. Fashion faces a stark choice: keep flogging cheap clothes, or get back in vogue.

• Jess Cartner-Morley is associate editor (fashion) at the Guardian