Transparency in fashion – how are we really doing?

A study of the fashion industry found that while some large brands are now making reasonable efforts to make their supply chains more transparent, many fall short. Three years after the Rana Plaza garment factory collapse in Bangladesh, too many still seem to have little control, or even knowledge, of their own supply chains.

After Rana Plaza, it took weeks for some companies to determine whether they were buying from the manufacturers working there, despite their labels having been found in the rubble.  Carry Somers of global NGO Fashion Revolution said: “Lack of transparency costs lives. It is impossible for companies to make sure human rights are respected and that environmental practices are sound without knowing where their products are made, who is making them and under what conditions”.

With research body Ethical Consumer, Fashion Revolution used publicly available information to selected 40 fashion brands, with at least £36 million annual turnover, across various sectors: high street, luxury, sportswear, accessories, footwear and denim. Researchers assessed and ranked them against five criteria via a combination of questionnaire responses (where supplied – only 10 companies replied) and published information. Criteria were: Policy & Commitment – the standards they set themselves; Tracking & Traceability – how well they know their own supply chain; Audits & Remediation – how they monitor compliance and address problems; Engagement & Collaboration – involvement in multi-stakeholder initiatives; and Governance – checks and balances at board level. Ranking in each area also factored in how well any work was being communicated to the public.

The findings have now been published as the first Fashion Transparency Index. Results suggest that while most big companies publish policies on environmental and labour standards, (often as a Code of Conduct) there is still a notable absence of long-term thinking in their sustainability strategies, at least as shared with the public.

40% of those studied did not appear to have a board-level monitoring system. Although 60% seemed to be tracking their first-tier (Cut–Make–Trim) suppliers, just five publish supplier details and monitoring results. Only two (Adidas and H&M) also name their second-tier suppliers (fabric and yarn mills and/or subcontractors). More than half showed no evidence of monitoring raw material sourcing. 30% do not communicate about monitoring difficult issues in the supply chain such as improving conditions for homeworkers or eliminating forced or child labour, and only eleven share evidence of collaborating with local trade unions or NGOs. 20% don’t publish details of any work with non-compliant factories.

Some companies do appear to be beginning to make a real effort. The average overall transparency score for the first 40 brands surveyed was 42 out of a possible 100 points, with Levi Strauss & Co, H&M and Inditex (Zara, Pull & Bear, Bershka, etc.) scoring 76 or 77. While still far from fully transparent, they each have many robust systems in place for tracking, tracing, monitoring and improving labour and environmental practices across the supply chain, and do more than most to communicate this work. Those doing quite well, but with more scope to do better, include Nike, Gap, Adidas and Primark. H&M, Inditex, Levis, Primark and PVH appeared to be involved in the most multi-stakeholder initiatives.

The biggest group was that scoring between 25 and 50. These retailers, which included Ralph Lauren, New Look, Gucci, Burberry, Next and Top Shop, have taken some measures but still have much work to do. Typically they have policies and commitments in place and have taken some positive steps in other areas but could still improve in most.

Scoring 10 or less, Chanel, Forever 21, Claire’s Accessories, Hermes, Louis Vuitton and Prada showed little to no evidence of more than a Code of Conduct and appeared to be making little effort towards genuine transparency. It seems many luxury brands still need to fully engage with this issue.

Fashion Revolution invites those in this Index to provide further information to update their score, and is asking other brands to volunteer for future editions. They hope to publish similar findings on 100 international fashion brands in 2017.

Every retailer still needs to do more to show commitment to the people who make their products. The campaign calls for all brands to put in place strategies, for both social and environmental improvements, featuring clear long-term goals, including timelines and quantifiable targets, and an explicit commitment to greater transparency. Even otherwise impressive Inditex expressed commercial concerns about the simple step of naming first-tier suppliers.

Let’s hope this Index helps brands recognise transparency itself as a potential competitive advantage. Shoppers have the right to know that their money is not supporting exploitation, human rights abuses and environmental destruction, and more and more are demanding it. With more transparency, companies, governments, NGOs, unions and shoppers will be able to work together towards a fairer, cleaner and safer fashion industry.

Find out more about Fashion Revolution at http://fashionrevolution.org/ or check all the issues at ethicalconsumer.org