Levi’s, H&M, Inditex top Fashion Transparency Index

Fashion Revolution, a charity formed in the aftermath of the Rana Plaza factory collapse in Bangladesh to raise awareness about the impact of the garment industry and to ask companies about their manufacturing policies has said that there is still noticeable absence of long-term thinking in their sustainability strategies.

The majority of the companies score well on having policies on environmental and labour standards in place and communicating them publicly, when it comes to policy and commitment, according to Fashion Revolution’s Fashion Transparency Index.

But only three of the companies (Gap, Primark, Levi Strauss & Co.) appear to be looking to the future with clear long-range (2020 or beyond) aims, which include defined end-goals and quantified targets along the way – as well as an explicit commitment to transparency.

H&M, Inditex and Nike (which includes Converse) are the only other companies to publish quantifiable targets towards improving standards and performance across the supply chain over time. However, they do not appear to communicate any specific targets on transparency.

Additionally, only a few companies show evidence of policies that target the engagement of suppliers further down the supply chain, eg. engaging directly with fabric mills.

For auditing and remediation, most companies provide information on audit procedures and schedules publicly, along with some limited disclosure of audit results. Levi Strauss & Co appears to publish the most information about their monitoring practices and corrective action plans.

Roughly 28 per cent of companies do not communicate about taking any special measures to monitor the more difficult issues in the supply chain (eg. improving conditions for homeworkers, eliminating forced labour, or eradicating Sumangali practices, a form of child labour), nor disclose in detail how they work with factories that show non-compliances in order to ensure they improve working conditions.

Many companies surveyed have legal obligations to monitor and disclose supply chain issues via the California Transparency in Supply Chains Act of 2010, which means a company must disclose on its website its initiatives to eradicate slavery and human trafficking from its direct supply chain for the goods offered for sale.

Sixty per cent of companies surveyed appear to have a system in place to monitor compliance with labour standards, and to continually improve standards, with responsibility at the executive board level.

According to the Index, tracking and traceability remain the weakest area.

Just over half the companies (60 per cent) surveyed seem to be making some efforts in this area, such as holding internal databases of their cut-make-trim (CMT) suppliers – the 'first tier' of the supply chain.

Only five brands (Adidas, H&M, Levi Strauss & Co, Nike – which includes Converse) reflect best practice in holding a publicly available list of all or the vast majority of their CMT suppliers. Twenty four companies state that they track their suppliers and/or their locations, but do not publish this information publicly.

Only two companies (Adidas and H&M) publish details of their second-tier suppliers (fabric and yarn mills or subcontractors). However, the majority of the 40 companies surveyed appear to have little or nothing in place to demonstrate that they monitor where raw materials and other resources (such as zips and other component parts) come from.

Only 11 of the companies in the Index show evidence of working with trade unions, civil society or NGOs on the ground in supplier countries to improve working conditions.

Nineteen of the companies surveyed (40 per cent) do not appear to have a system in place to monitor compliance with labour standards and to continually improve standards, both at Board level (eg. an executive corporate responsibility committee) and at departmental level (eg. a Social Responsibility team).

Human rights and environmental protection should be the responsibility of company executives as well as at department level. In addition 15 companies (38 per cent) show no evidence of incorporating labour standards into buying practices.

Thirty per cent of the companies do not appear to have whistleblowing or confidential complaint mechanisms in place for workers in their supply chain, or at least none that they mention publicly. This means that workers may have little chance to speak up about poor conditions or abuse, or may not be able to do so without fear of repercussion.

The Fashion Transparency Index lists some positive examples such as supplier clusters.

Inditex has 10 supplier clusters in the geographic areas in which it has a larger and stronger presence: Spain, Portugal, Morocco and Turkey (these four countries comprise about 60 per cent of the company's supply chain); India, South East Asia, Bangladesh, China, Brazil and Argentina. These clusters covered 91 per cent of Inditex’s production in 2014 and "are regularly consistently under review". Through these clusters, Inditex works with trade unions, NGOs and civil society on labour rights.

When it comes to publishing factory lists, Adidas publishes a list of subcontractors (eg. specialist printing, mould production, or embroidery services) as well as a CMT list on its website. H&M has mapped 99 per cent of its production volume, publicly publishes 95 per cent of its first tier CMT list and 35 per cent of its fabric and yarn suppliers. In this area both Adidas and H&M demonstrated the highest levels of transparency of all 40 companies in this Index.