Bangladesh building disaster
Source: Rex Features
On 20-26 April, Fashion Revolution Week marks 2013’s Rana Plaza disaster, when the collapse of a garment factory in Bangladesh killed more 1,100 workers. Non-profit organisation Fashion Revolution has just released this year’s edition of its Transparency Index, which rates fashion brands on how open they are about their supply chain. Its policy director, Sarah Ditty, tells Drapers why this is now more important than ever.
The coronavirus pandemic shows exactly why transparency in the fashion industry is vital – at the moment we’re seeing the devastating impact of brands cancelling orders and delaying payments to their suppliers. We’ve already seen in the past few weeks that millions of workers have lost their jobs and not received any severance pay.
They’re in countries such as Bangladesh, Myanmar and Cambodia, where there aren’t any social protections in place, and the state isn’t set up to have social safety nets in place for supply chain workers. This issue is also affecting workers in countries such as Italy, where workers may not have formal contracts in factories, so would not receive any financial aid from the government.
Workers who are based in countries that lack social security have wages that are already low, and rely heavily on fashion manufacturing. When we were conducting this research before the Covid-19 pandemic, brands would disclose very little about their buying practices.
If they revealed more about their purchasing methods and buying models, we would be able to hold them more accountable for the behaviour they’re displaying now, such as cancelling orders from suppliers that have already started manufacturing. Suppliers already operate on such razor-thin margins, and this has a knock-on effect on their ability to pay workers’ wages on time.
Source: Rex Features
What this crisis is really showing is the lack of resilience and sustainability in the fashion system. I think the businesses that will fare best in this situation are the ones that are working hard to move their business model to be more ethical for people working in their value chain, as well as resources and the environment.
The short-term view taken by the fashion industry is unsustainable and not good for business.
This is really the opportune moment to take stock of how things have been going and where things can go from here. We can’t afford to go back to business as usual. It wasn’t resilient, and that’s why the industry has been so paralysed, and why even so many big brands who are making a lot of annual revenue are struggling to survive, after just a few weeks of lockdown.
The short-term view taken by the fashion industry is unsustainable and not good for business. This is a good moment to look at what in their brands is sustainable. The climate crisis is accelerating every day and there will be more unexpected shocks. If they’re smart, businesses would use this and look at how their value is created and distributed.
The H&M Group is at the top of this year’s Index because it published the most amount of information about its human rights, social and environmental procedures and goals. It’s publishing a supplier list that’s quite detailed – it covers its manufacturers and mills, as well as disclosing a handful of raw material suppliers. Having said that, it only scored 73%, so there is still quite a lot more that it can do to improve transparency.
I think [for brands to achieve] 100% is feasible. The index methodology has been designed to be ambitious, but we’re not trying to score brands on where they’re at now – we want to push brands to do more. When we get to the nitty gritty of issues such as living wages and purchasing practices, that’s where we’re seeing brands not disclosing information.
We would really like the fashion industry to move away from prioritising shareholder profit above and beyond all else, which is why suppliers and workers are suffering as a result. We want to see the industry move to place its people and the planet above shareholder profit.
This year’s Index was rated on five key factors: policy and commitments; governance; traceability; supplier assessment and remediation; and spotlight issues. The Transparency Index is composed of 220 social and environmental issues, including gender equality, living wages, purchasing practices, supplier disclosure. The ten highest ranking brands this year are:
|Marks & Spencer||60%|
|VF Corp (The North Face/Timberland/Vans/Wrangler)||59%|