Companies must take both environmental and social responsibility into account to be truly sustainable.
The pandemic has brought to light how fragile job security can be throughout the global garment industry, as workers ranging from retail employees to factory personnel were laid off or furloughed during the supply-chain shutdown. Allegations of mistreatment also surfaced during the crisis, with factory employees reportedly working for less than minimum wage in unsafe conditions.
Consumers are now paying close attention to how workers are treated. In a McKinsey study conducted in April with German and U.K. consumers, 38 percent of respondents ranked helping low-paid workers in Asian factories as one of the top two priorities that fashion companies should focus on to help society cope with the impact of Covid-19. This was tied with reducing the negative impact on the environment. Both of these came in second behind protecting the health of employees, which 55 percent placed within the top two concerns.
Ahead of our upcoming virtual Sourcing Summit panel, “Sourcing in Cancel Culture: What Suppliers, Society & Shoppers Now Expect When it Comes to Social Impact,” we asked industry insiders what is in dire need of a revolution when it comes to social impact and responsible sourcing.
Peter Haney, director of social responsibility and corporate responsibility at Columbia
“Brands and retailers are going to have to continue to fundamentally shift the nature of their vendor relationships to reflect shared values. The nexus of responsible sourcing will need to be a shared commitment to social responsibility, environmental sustainability and worker empowerment. The industry must move past simply chasing cost and basic compliance and move toward shared values with a real focus on social impact.”
Ross Nova, head of global compliance at L.L. Bean
Too often auditors have a checklist approach, broadly looking at factories, but not deeply. They are trained to look for objective measures of non-compliance (which is good and proper) and ignore the subtle signs of issues. How can we train and develop in auditors the ‘sixth sense’ so many of us rely on to do our jobs well? If an auditor cannot tell the difference between a factory that doesn’t know how to comply versus a factory that chooses not to comply, the audit result is the same, but we still miss a crucial fact I look for in every report: Is the factory led by good people trying their best to do the right thing? Fixing this issue will help address audit fatigue, standards fatigue, and the financial fatigue we deal with today.”
Ineke Zeldenrust, coordinator of Clean Clothes Campaign
“Brands, retailers and e-tailers will need to rethink and change the current pricing model and underlying business model. These changes include order stability that allows for proper planning, timely payments of orders, and full respect for workers’ rights. It also includes a costing model that covers all the costs of social compliance: ranging from living wages and benefits, to social protection and worker safety.
As an immediate step, this requires brands, retailers, and e-tailers to end unsustainable practices in future contracts, extending contract durations and making fair payment schedules, as well as making enforceable commitments to help fund social protection systems, for unemployment and/or severance benefits, sickness, and employment injury.”
Rachel Lincoln, director of sustainability at prAna
“The real revolution we hope to see in social impact is acute awareness of the individuals making our consumer goods. By creating humanity via awareness of the people working tirelessly to make products destined for our marketplaces, who are simply working to provide for their families, we have the opportunity to lean into a responsible sourcing model. Our revolution should be to honor their hard work and dedication through programs such as Fair Trade, leveraging our purchasing power, and making decisions to construct change.”
Peter Maerevoet, global CFO and senior executive officer at Tradewind
“The key to achieving sourcing success is the selection of a partner based on mutual benefit and trust as the main considerations. This is, I believe, one of the biggest revolutions or changes that will come out of this pandemic related to apparel sourcing. Suppliers will be treated more as equals, and will be given more accountability. The social impact will be clear once this accountability and increased decision-making powers have shifted to the suppliers. They will be leading the environmental and safety work for their factories instead of being told by a brand/retailer thousands of miles away.”
Sebastien Breteau, CEO of Qima
“Consumers are rapidly becoming environmentally and socially conscious. And at the same time, we’re seeing an unprecedented emphasis on health and safety, undoubtedly an effect of Covid-19. Conversely, Qima data suggests brands instead remain focused on cost-cutting, exposing supply chains to lurking risks and compromising transparency.
With pressures mounting and more uncertainty ahead, strategic partnerships have never been more important. But a more holistic approach is needed so all stakeholders are engaged in making progress, rather than having the focal company play watchdog. We expect to see more brands collaborate with each other, suppliers and labor groups to construct frameworks that establish standards and ensure compliance. Institutionalizing such frameworks would revolutionize sourcing by aligning industry practices with consumer demands and upholding quality, sustainability and ethics.”
Flora Davidson, co-founder of SupplyCompass
“There’s a lot that needs to change across the industry, and the time is now. But for me, right now the most important change needed is the digitalization of the apparel industry. Supply chains need to digitize and brands also need to bring their sourcing methods, product development practices, and production processes into the digital age, in line other industries. This means rather than gathering material, product, process, and supply chain information in an array of offline and unstructured documents, bringing all this into cloud-based software. Understanding and measuring impact, and identifying where improvements can and need to be made, is made much harder if the necessary data is not recorded and managed digitally.”
Ilishio Lovejoy, policy and research manager at Fashion Revolution
“The relationships and power dynamics within global sourcing and supply chains are in dire need of a revolution. We need to take a hard and honest look at how sourcing relationships currently unfold at every stage of the supply chain and overhaul the exploitative systems these practices uphold. Without this, we will not be able to move forward with any kind of meaningful progress to protect our planet and provide dignified lives for all who inhabit it.”
Irina Kapetanakis, vice president of marketing at Suuchi
“When companies look at their responsible sourcing and social impact initiatives, they need to revolutionize their vendor management strategies. They need to adopt systems that allow them to rate their suppliers on key metrics, such as compliance, sustainability, and workers’ rights.”
The conversation on social impact and responsible sourcing will continue at the upcoming Sourcing Journal Summit 2020, R/Evolution: Overhauling Fashion’s Outmoded Supply Chain on Oct. 14-15. Get your ticket here.