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H&M Slips From No. 1 Transparency Ranking

In the years since Fashion Revolution wielded the question “who made my clothes” as one part demand, one part rallying cry, more apparel companies are disclosing information about their supply chains than they did before. Yet the industry’s progress on transparency remains “too slow,” a new study by the grassroots group has found, allowing worker exploitation and environmental damage to thrive in the shadows while obscuring the parties responsible for addressing these issues.

“The global fashion industry remains rife with human-rights abuses and environmental degradation, and supply chains remain complex fragmented, deregulated and opaque,” said Sarah Ditty, Fashion Revolution’s global policy director and author of its latest Fashion Transparency Index, which ranked 250 of the world’s biggest fashion businesses based on their public disclosure of human rights and environmental policies, practices and impacts.

The Covid-19 pandemic, in particular, has thrown into focus how little brands actually communicate. Though order cancelations were widespread at the start of the outbreak last year, placing extreme pressure on suppliers and workers, less than one-fifth (18 percent) of the most prominent companies disclosed the percentage of shipments they revoked and 14 percent provided the percentage of orders that were scuppered and not yet reinstated.

Buyers are also keeping their post-pandemic purchasing practices close to their chest, with just 14 percent of those who have bargained for lower prices on new orders divulging the percentage of discounts they’ve applied to previously agreed-upon terms. Fewer than one in 10 brands, the report noted, published a policy to pay suppliers within 60 days, meaning that “clothes are often worn by consumers before brands have paid the factories that made them,” Ditty said.

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Equally difficult to ferret out from brands is the impact the health crisis has had on the people who produced their garments. The vast majority of fashion businesses—97 percent—did not publish the number of workers in their supply chains who were laid off due to Covid-19, leaving an “incomplete picture” of the pandemic’s socioeconomic fallout,” Ditty said, “though we know from plenty of media coverage and research over the past few months that workers have been laid off in droves and had their wages docked and struggled to find work and faced increasing food insecurity.”

Meanwhile, the codes of conduct that brands swear by are sometimes little more than boilerplates that provide scant evidence to back up their claims, Fashion Revolution discovered. Despite the preponderance of marketing speak about living wages and decent work, the organization’s research found that only 27 percent of the biggest brands disclosed their approach to calculating a living wage. Just 4 percent of them published a roadmap on how they’re going to achieve a living wage for workers, and 1 percent—only Patagonia and OVS, in fact—divulged the number of workers in their supply chain who receive a living wage. “It’s disappointing to see for another year that so little disclosure is happening from big brands about their plans and progress on living wages,” Ditty said.

Ditto on the environmental front. Despite the urgency of the climate crisis, boldface fashion brands give away very little about their efforts to tackle overproduction, plastic use and waste. Only 14 percent of those Fashion Revolution analyzed, for instance, cited the number of items they churn out every year, obfuscating the scale of potential overproduction. And while the bulk of businesses have published a policy on energy use and carbon emissions reductions at a direct operations level, only 58 percent disclosed a similar policy for suppliers and just 30 percent published a time-bound commitment on decarbonizing.

Carbon transparency also took a nosedive as brands moved further away from their owned and controlled operations. Despite an “encouraging” 62 percent of major brands publishing their Scope 1 carbon footprints, only 26 percent did the same at the manufacturing level and 17 percent at the raw material level, where the greatest environmental impacts occur.

The industry is moving “too slow” on transparency, allowing worker exploitation and environmental damage to thrive, said Fashion Revolution.
Models during the event for Fashion Revolution Week holding a sign with the words ‘who made my clothes?’ between department stores on Alexanderplatz in Berlin, Germany, on 28 April 2018. Gregor Fischer/picture-alliance/dpa/AP Images

When it came to waste, nearly one-third of the biggest brands (32 percent) described having permanent clothing take-back programs, but only 22 percent specified what happened to the castoffs they received through these schemes, “which typically involves unwanted clothing being resold overseas rather than recycled into new textiles and clothing,” Ditty said. In terms of plastic, more than one-third of the top brands made inroads with reducing their use of virgin plastics for packaging, yet only 18 percent could say the same for textiles, much of which is awash in fossil-fuel-derived synthetics such as polyester and nylon.

That’s not to say there aren’t slivers of progress, however. When Fashion Revolution published its first Fashion Transparency Index in 2016, a mere five out of 40 major brands published a supplier list. Now, 117 out of 250—or 47 percent—have. Among the 19 brands that revealed their first-tier manufacturers for the first time this year were luxury brands Gucci, Fendi and Zegna, marking “an important step forward” for a sector known to cloak itself in exclusivity and secrecy, Ditty said.

“Disappointingly,” the organization is still seeing glacial progress on the disclosure of production—which is to say second- and third-tier—facilities. Less than one-third (27 percent) of the brands reviewed named some of their mills and other processing facilities, and 11 percent disclosed information about their raw-material suppliers.

Overall, no brand scored above 80 percent out of 250 possible points, though OVS gained 44 percentage points from last year, earning a score of 78 percent and snatching the title of most transparent brand. The Italian firm was followed by H&M, the previous year’s No. 1, at 68 percent; Timberland and The North Face at 66 percent; Calvin Klein, Tommy Hilfiger and Van Heusen at 59 percent; and Gucci, Kmart Australia and Target Australia at 56 percent.

Leyla Ertur, head of sustainability at H&M Group, said that “more industry wide transparency commitments will help to drive real, positive change and ultimately a more sustainable fashion industry,” adding that “brands should be accountable for their value chain.”

As a whole, however, brands only averaged 23 percent this year, indicating the diversity of efforts and lack thereof. Boohoo, which has been on a charm offensive since it was accused last year of fostering labor-rights abuses, moved 11 percentage points up to 20 percent after publishing a list of its U.K. suppliers. (It plans to fete a global list in September.) Some companies, on the other hand, showed no signs of a desire to engage, including Billabong, Fashion Nova, Max Mara, Pepe Jeans, Roxy, Quicksilver, Tom Ford and Tory Burch, which all earned a 0 percent score.

Transparency shouldn’t be confused with sustainability, Ditty stressed, but it’s a vital first step.

“In a nutshell, transparency underpins transformative change in the global fashion industry,” she said. “Without transparency, achieving a sustainable, accountable and fair fashion industry will be impossible.”

“We welcome the progress that has been made on supply chain traceability and we encourage more brands to disclose,” Ditty added. “And for those that already do, to accelerate the progress toward a deeper level of traceability and more comprehensive disclosure.”