The pressure to improve environmental and social transparency is heating up.
In 2020 alone, companies poured $35 trillion into improving and tracking their impact on people and planet—and since then, that number has risen 15 percent as investors increasingly require data-based findings in order to fund these firms, according to the Global Sustainable Investment Alliance. Consumers are also interested in knowing about the values and commitments behind the products they purchase.
This week, Higg released new benchmarks for social impact and labor that the industry can use to track and gauge performance. The comprehensive environmental, social and governance (ESG) solution is first to combine environmental metrics like carbon emissions, water use and waste management with working conditions, expanding the Facility Social and Labor Module (FSLM) audit tool’s capabilities and Higg Facility Environmental Module (FEM) assessment.
“We’re innovating for a world where everything is made with the lowest environmental impact and greatest social benefit possible,” Higg CEO Jason Kibbey said, and “to do this, businesses must understand the impacts across their value chain.” Adding human impact into the Higg framework provides a holistic view of a company’s effects on the world, as “choosing only one or two areas to invest in won’t move us to where we need to be,” he added.
Users can chart their own environmental and social progress and benchmark their performance against peers, helping brands to identify “specific areas that need action gives businesses the information they need to speed up their progress,” Kibbey said.
These richer insights can inform strategic decision-making around sustainability goals. Meanwhile, wide-ranging and in-depth ESG insights can help companies identify low-performing areas within their organizations or supply chains, and measure improvement as changes took effect. Higg users can filter manufacturing facilities by industry or region, helping brands to manage factory compliance against country-specific labor requirements.
These capabilities are bolstered by a partnership with the Social and Labor Convergence Program (SLCP), a nonprofit dedicated to aggregating insights about working conditions across multiple stakeholders in order to reduce the time and cost of auditing. The group recognizes the industry-wide phenomenon of “audit fatigue,” and wants to give manufacturers control of their own reporting based on a specific, comparable data set.
That system, known as the Converged Assessment Framework (CAF), gives manufacturers the opportunity to release data on a number of fields of impact interpreted and verified by SLCP-selected “accredited hosts.” There is no score or value judgment associated with the data, though the group helps suppliers formulate action plans for improvement in areas that necessitate attention.
“To create better conditions for workers in the fashion industry, businesses need data they can trust and Higg is helping make this possible” by providing access to SLCP data, SLCP executive director Janet Mensink said. “By offering additional benchmarking services, Higg will help users see how their efforts compare against others and will spotlight opportunities for improvement.”
Higg wants these findings to serve as a launching point for more collaborative work with manufacturers to improve labor standards. A Social Science Research Network study shows that suppliers are more likely to improve their facility conditions when clients are willing to work with them on sustainable solutions.
While factory managers are often charged with completing audits, “the best auditors are the workers themselves,” Higg said. Brands should take a more active role in gathering worker feedback and addressing staff concerns. Higg said on-the-ground interactions using tools like mobile phone surveys, hotlines and off-site interviews can make workers feel comfortable sharing their on-the-job experiences.
The need for comprehensive data-gathering is “more timely than ever,” Higg said.
“The consumer goods industry, and especially apparel, must overcome challenges not only with greenwashing, but also with sometimes misinterpreted claims of negative environmental and social impacts,” it added. “Today’s investors are focused on credible data-backed sustainability programs, and laying the foundational groundwork today will support investor and due diligence requirements in the future.”