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How fashion retail is cleaning up its supply chains

Four years on from the Rana Plaza collapse, Drapers looks at what steps have been taken by fashion retailers to prevent a similar disaster and how once secretive supply chains are being opened up. 

H&m factory shot

H&m factory shot

Source: GMB Akash

A factory in Savar, Bangladesh, that is used by H&M

“The question I’m asked the most is how far we’ve come since Rana Plaza,” says Orsola de Castro, founder and creative director of Fashion Revolution, a not-for-profit organisation that campaigns for reform in the fashion industry. “And the answer is: it’s complicated.”

Last month marked the fourth anniversary of the disaster, in which 1,135 garment workers lost their lives after a factory building collapsed in Dhaka, Bangladesh. The tragedy was seen as a wake-up call for the industry and as a chance to improve the safety of global supply chains. More than 200 brands and retailers from Europe and the US signed legally binding agreements – the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety. They agreed to improve labour rights and safety standards, and collectively pledged $100m to enforce the standards of the Accord and the Alliance.

Rana plaza site (002)

Rana plaza site (002)

The site of the Rana Plaza collapse

But progress remains slow. An investigation published last year by the NYU Stern Center for Business and Human Rights found that only 27% of Bangladeshi factories are covered by the initiatives, effectively excluding almost 3 million garment workers from their protections. Campaigners are calling for further action from retailers and brands, including strengthening the Bangladesh Accord. 

Bangladesh accord 6 points

Bangladesh accord 6 points

“The health and safety situation in Bangladesh is far from resolved,” explains de Castro. “Workers in developing countries around the world continue to suffer huge abuse, and are not yet being paid a living wage or an adequate wage to support their families and live a dignified life.”

However, some steps to improve fashion’s ethical record are being taken. Greater public awareness of the issues is helping foster a more erudite vocabulary when consumers talk about the provenance of their clothing. Ethical considerations have shot up the retail agenda, and many brands are making efforts to address their historically opaque global supply chains.

“The first step has to be transparency,” says a spokesperson for H&M. “It means we can hold ourselves and our suppliers accountable on issues such as human rights, fair jobs [terms] and environmental protection. We want our customers to know that we do our best to ensure that the fashion we offer has been made, transported and sold responsibly.”

Retailers have been working towards this transparency by releasing lists of their suppliers, a practice H&M has followed since 2013. Asos published a list of all the approved factories it uses for its own brand on its website in March and Japanese retailer Uniqlo released a list of its 146 core supplier factories the same month.

The Fashion Transparency Index (FTI),  Fashion Revolution’s annual report into companies’ commitment to cleaning up their supply chains, also charts progress in this area. The index ranks how much information 100 of the largest global fashion businesses disclose about their social and environmental policies, practices and impacts.

 There are weak points throughout the fashion supply chain where negative things can happen and exploitation does occur

Peter Needle, Segura

The second annual report was published last month and found that 31 brands are now disclosing full lists of their direct suppliers – a healthy increase from just five in 2016.

However, publishing lists of their suppliers highlights just how much of a job many retailers have when it comes to ensuring fair practice throughout their supply chains. Large retailers can have hundreds of suppliers spanning several continents, so ensuring high ethical standards across them all is extremely difficult.

“There are weak points throughout the fashion supply chain where negative things can happen and exploitation does occur – in terms of both the environment and the lives of the people that work in the garment industry,” says Peter Needle, CEO of Segura, a cloud-based supply chain management firm.

He notes that the 2015 Modern Slavery Act, which requires all businesses with an annual turnover of £36m or more to publish a statement setting out the steps they are taking to ensure slave labour is not being used anywhere in their supply chains, has placed the onus on businesses in the UK to look into their suppliers and their subcontractors.

Green issues

Of course, there are also ethical concerns for retailers outside of supply chains: textile production uses enormous amounts of chemicals and factory run-off leads to water pollution. Given this bleak outlook, who is leading the charge when it comes to environmentally conscious fashion?

For the most part, it is the brands – from Patagonia to Stella McCartney and Nike – who have long been vocal in championing cleaner production practices, and today invest significant sums in tracking and improving their environmental impact. But smaller brands are getting in on the act: UK-based outdoor clothing company Finisterre builds relationships with trusted suppliers who share a similar outlook.

“When we started out, it was hard to have enough buying power to develop our own low-impact textiles and products. Today, we’re lucky to work with suppliers who believe in challenging the norm – we rely on these relationships to evolve our product,” explains Debbie Luffman, Finisterre’s product director.

“All of our cotton is certified organic, we use low-chemical and low-water-use finishing processes, and our Asian factories are fully audited to ensure social standards.

”But it’s the commitment and expertise of our manufacturers that helps us to develop the fabrics and product that impact least on the environment.”

Gap has also committed to reducing its environmental impact, by taking steps to obtain 100% of its cotton from sustainable sources by 2021.

“We have the opportunity to make a big impact on the global cotton community, and bring to light what’s so incredibly important to the future of garment manufacturing,” says Gap’s chief product officer, Wendi Goldman.

Demand is there, and retailers are adapting. But weak points threaten to undermine the progress made. Reports of police brutality against protesting garment workers in Bangladesh surfaced earlier this year and elsewhere in the world, a Pakistani garment factory in Karachi was razed to the ground by fire in March. Undercover reporting by the BBC’s Panorama last year found children and Syrian refugees working illegally in Turkish facilities, manufacturing clothes destined for the UK market.

The reality is that today’s fashion industry is paying the price for years of inadequate regulation, inconsistent compliance and opaque systems that hide traceability and accountability. The sheer scale of the market for apparel – which is worth $2.4 trillion and employs tens of millions of people – makes it very difficult to unravel.

It is clear that far more needs to be done. Progress will require a concerted effort from governments, regulators, NGOs, trade bodies and factory owners, as well as consumers, brands and retailers.

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