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Supply-Chain Transparency Has ‘Surged’ But Government Oversight Still Needed

The fashion industry has seen a “dramatic increase” in supply-chain transparency over the past three years, though more can still be done, a new report claims.

Published Wednesday by the Clean Clothes Campaign (CCC), a coalition of labor unions and non-governmental organizations, “Fashion’s Next Trend: Accelerating Supply Chain Transparency in the Apparel and Footwear Industry” describes a “surge” in clothing and footwear brands and retailers that are publicly disclosing their supplier factories, a step experts widely agree helps identify and address labor abuses in the garment supply chain.

Transparency is not a panacea for labor-rights abuses but is critical for a business that describes itself as ethical and sustainable,” Aruna Kashyap, senior women’s rights counsel at Human Rights Watch, said in a statement. “All brands should adopt supply-chain transparency.”

Supplier transparency, the CCC notes, is a “powerful tool” that promotes corporate accountability for garment workers’ rights, provides proof that a company knows where its products are made and allows both workers and labor advocates to alert a business if human-rights abuses occur in supplier factories.

At the same time, voluntary corporate action has its limitations, Kashyap said. Ultimately, laws are needed to “require transparency and enforce critical human rights practices,” she said.

Thirty-nine companies have so far aligned or committed to align with the Transparency Pledge, a minimum standard of supply-chain transparency created in 2016 by the CCC to enable “advocates, workers and consumers to find out where a brand’s products are made.”

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The CCC has engaged with a total of 74 brands and retailers since 2016. Of them, 22 support the Transparency Pledge, 31 “fell short” of the pledge standard and 21 would not publicly disclose the necessary information.

Since the middle of 2018, the CCC has also engaged with seven Responsible Business Initiatives—RBIs, for short—which are groups of companies that seek to rally their corporate members to drive ethical business practices.

Because RBIs don’t mandate public disclosures of supplier factories, transparency among corporate members can vary significantly, the CCC said. As such the coalition is urging RBIs to “play a leadership role” by requiring companies, as a condition of membership, to open up their supply chains in alignment with the Transparency Pledge standard.

“RBIs should stop making excuses for companies that want to continue to keep their supply chains opaque,” Christie Miedema, campaigns coordinator for the Clean Clothes Campaign, said. “They should instead follow the lead of the frontrunners among their members and make transparency a membership requirement to give workers and activists access to the information they need to help address workplace abuses.”

The U.S.-based Fair Labor Association, an RBI whose 50-plus members include Adidas, Fruit of the Loom, Nike and PVH Corp., for instance, has taken strides by requiring its affiliates to make their supply-chain information available in accessible open-data formats by March 2022. Non-compliant companies may be subject to a special board review.

The Dutch Agreement on Sustainable Garments and Textiles (AGT)—signatories include C&A and Kings of Indigo—has not made supply-chain transparency a condition of membership but requires its members to disclose information about their supplier factories to the AGT secretariat, which then makes it public in aggregate form through the Open Apparel Registry, a free-to-use, open-source tool that aims to map every apparel factory globally.

The United Kingdom’s Ethical Trading Initiative (members include Asos, H&M and Marks & Spencer) and the Fair Wear Foundation (Mammut, Nudie Jeans and Vaude) have taken “incremental steps” to improve supply-chain transparency of their members, while the Sustainable Apparel Coalition, Amfori and the German Partnership for Sustainable Textiles have not made supply-chain transparency a membership requirement.

“Governments have an important role in adopting legislation requiring companies to conduct human rights due diligence in their global supply chains and being transparent about where their products are being made,” Bob Jeffcott, policy analyst at the Maquila Solidarity Network, said. “Such legislation is key to creating a level playing field among businesses and in protecting the rights of workers in their supply chains.”