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Scorecard: Where Big Brands Fall on Sustainability

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Sustainability for retailers is a particularly slippery slope. While some are lauded for campaigns that make a significant impact, others are cited for hyperbole or greenwashing.

Regardless, having an environmentally friendly ethos is important to consumers — a Nielsen study found that 75 percent of millennials are willing to pay extra for sustainable offerings — and brands have taken note. It’s not enough to just sell run-of-the-mill goods, brands need to have a defined social and societal impact.

We took a look at some of the recent efforts by eight major retail brands and assigned them letter grades based on genuine transparency ventures, reception by consumers and industry leaders, and commentary from outside experts.

Patagonia: A
Patagonia has long been the frontrunner when it comes to sustainability in retail. In November, it pulled an unprecedented move and donated 100 percent of its global Black Friday sales to grassroots environmental organizations. Patagonia also has a robust repair program that helps consumers maintain longevity of their products, in addition to selling used branded clothingfrom its Portland retail store. (And no one has forgotten its watershed “Don’t Buy This Jacket” campaign in 2011, which asked consumers to think twice before making a purchase in an effort to prevent waste.)

“Patagonia has done a tremendous amount of innovation for people and the planet. It’s been in their DNA from the beginning,” said Rebecca Mallard, founder of Maven Women, a sustainable women’s wear company.

Levi’s: A
Levi Strauss and Co. recognized it had to do something to cut its abundant water usage, so in 2011, it implemented its Water<Less program, which streamlines its production process to reduce water used to make denim. However, what really sets Levi’s apart is its focus on inter-industry collaboration when it comes to environmental efforts. It hosts an annual “collaboratory” that convenes retailers from around the world to glean insight and tips about more sustainable operations. It also expanded its worker well-being program last year to benefit more countries.

“They’re taking their role seriously in supporting innovation,” Ballard said. “It’s open source and about creating a cohesive network, rather than having a clutched fist attitude. Partnership is an essential element of ethics and sustainability.”

Gap, Inc.: B
Earlier this week, Athleta, part of the Gap, Inc., announced that it is launching its first line of athletic wear fully certified by Fair Trade USA, which is focused on supporting global factory workers. For every garment sold in the collection, factory workers are given an additional financial premium to use to benefit their community in areas like childcare, transportation and education. With its Fair Trade line, Athleta primarily aims to support female factory workers — the new styles are made by a factory in Sri Lanka where more than 80 percent of employees are female.

The move by Athleta follows Gap, Inc.’s announcement last year that it has begun disclosing global factor lists in a push for transparency, taking a cue from companies like UK-based Marks & Spencer and Belgium-based C&A. While it’s an important move, it only serves as the initial step before making tangible improvements to working conditions and Gap has yet to launch a program like Levi’s worker well-being efforts.

“It’s a really great first step in transparency and accountability, saying ‘these are our factories and we’re going to own up,’” said Natalie Grillon, co-founder of Project Just, a informational platform focused on sustainable fashion and beauty.

Kering Group: C+
Kering came under fire in December when it received low marks in the Apparel & Footwear Benchmark Findings Report, developed by watchdog organization KnowTheChain. Kering was positioned fourth-to-last on the report, which ranked mass retailers in several categories, including risk assessment, recruitment, monitoring and governance.

Kering claims the score was a result of issues around its information disclosure practices and that information highlighting its most recent sustainability efforts was not considered. Among these ventures is Kering’s environmental profits and loss app, which launched in October as an educational tool to track the environmental cost of fashion design. In response, Kering launched a “next generation” sustainability strategy at the end of January, a comprehensive plans to curb emissions and increase working conditions.

H&M: C+
Though H&M launched its Conscious Collection in 2012 and has since worked with organizations to help improve transparency standards, the actual level of transparency from H&M is minimal, with sporadic posts on social media alluding to improved working conditions. Additionally, the company has been caught in several troubling incidents, like the revelation that it had used refugee workers in Europe.

“The issue with H&M is they brand themselves as better than they actually are,” Ballard said. “When you find Syrian refugee children working in factories in Turkey, which happened, and a recycling campaign that has a greenwashing component, it makes me pause.”

Zara: C
Like H&M, Zara has been plagued with similar challenges falling upon fast-fashion retailers. However, it took four years longer than H&M to launch its first eco-friendly line. As part of its new effort, launched late last year, the Spanish company began offering recycled packaging and boxes and also started a clothing donation program (modeled largely off of H&M’s existing program).

“As any retailer is planning for the next generation of customers, and its business in general, sustainability and social impact have to be a top consideration, and it’s positive to see Zara take a step to improve its supply chain,” Brooke Blashill, svp and director at Boutique@Ogilvy, told Glossy in a previous interview.

Everlane: C
Despite operating on a mantra of “radical transparency,” Everlane has shown this notion is particularly elusive. Even with its push to share “Transparency Tuesday” Q&As on social media and its efforts to take customers on tours of factories, it is prohibited from disclosing its factory list and has unspecified compliance guidelines for locating new factories. However, the company audits every facility each quarter and avoids at-risk countries so there is no compliance risk, according to CEO Michael Preysman.

Preysman told Glossy in a previous article that the lack of information about its factories is an attempt to protect other brands that operate out of the same spaces. “Everlane makes products in the same factories as luxury brands,” he said. “We make the same quality product as these other brands, pay the same cost, but charge a much lower markup. We may jeopardize their business.”

Asos: F
In September 2016, an investigative report by BuzzFeed found that Asos workers were subjected to particularly brutal conditions, including being discouraged from taking bathroom and water breaks and getting fired for taking sick time. Despite numerous reports, the brand denied that it was complicit in the allegations. “There have been a number of allegations about the working conditions at our warehouse in Barnsley that are inaccurate, misleading or based on out-of-date information,” it said in a statement.

*This story first appeared on Glossy

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How Mass Retailers are Traversing Big Transparency

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Transparency is trending in fashion.

Mass retailers like H&M, Zara, UK-based Marks & Spencer, Belgium-based CNA and Gap Inc., which owns Gap, Old Navy, Banana Republic and Athleta, have begun sharing the names of the factories they work with in an effort to improve working and environmental conditions, streamline cluttered supply chains, and get on the right side of the mindful consumer. This is a departure from traditionally standard retail practices, which saw companies keeping their factory names closely held in order to protect themselves from competition.

The timing is right: Corporate brands are looking to become more transparent during a moment of increasing customer consciousness. Transparency is, on some level, a feel-good buzzword for an industry plagued by environmental and ethical issues, as becoming more transparent doesn’t require as much internal overhaul as becoming more sustainable. And it’s not for nothing: When retailers identify what factories they work with, as well as what compliance guidelines they follow, it can help improve worker conditions and bring manufacturer malpractice to light.

“The supply chain is really complicated, but it’s a positive step from a global labor union perspective to be transparent,” said Christina Hajagos-Clausen, textile and garment director of global union IndustriALL, which has contracted agreements with H&M and Zara. “Customers appreciate it, as well. If you have nothing to hide, you can show it.”

But as big brands take steps to bring their supply chains out of the shadows, they haven’t trumpeted that message as loud-and-proud as one would expect. Gap Inc. announced its factory list in a bland investor relations announcement. H&M and Zara share some updates on the subject on their social media accounts, but they’re sporadic enough to get buried by product posts and lifestyle content.

Compared to brands like direct-to-consumer retailer Everlane, these brands have kept transparency volume to a whisper. Everlane’s entire brand ethos is predicated around transparency: Its motto is “Radically Transparent,” and it hosts “Transparency Tuesdays” Q&As on Snapchat. In addition, it takes customers on video tours of new factories. The pricing structure for every product is laid out online, and interested customers can read about each of the 17 factories Everlane works with on its website.

Customers have clearly embraced this share-everything approach to retail. Everlane grew its revenue by 200 percent year-over-year in 2015, according to Bloomberg, and the brand does little marketing, accruing a customer-base mostly around mission-driven word of mouth.

But Everlane’s “radical transparency” is missing key specifics. Factory names aren’t disclosed, and the company adheres to a list of unspecified “compliance guidelines” when sourcing new factories. Meanwhile, Gap, Zara and H&M all have named factories and detailed compliance guidelines on their investor sites.

Founder and CEO Michael Preysman said in an email that the reason Everlane doesn’t disclose its factory names is that factory partners have asked them not to.

“Everlane makes products in the same factories as luxury brands,” he said. “We make the same quality product as these other brands, pay the same cost, but charge a much lower markup. We may jeopardize their business.” He added that when factories allow, the names are shared. Such factories currently include Nobland in Vietnam and Mola in Los Angeles.

Preysman said that Everlane’s requirements for factory transparency include being able to document them, share what products are made there and complete audits on worker health, pay, safety and paperwork. However, in leaving some aspects—like their names—open-ended, Everlane’s practices are subject to interpretation.

“Not releasing factory names makes you less accountable if something happens,” said Natalie Grillon of Project Just, an online resource for customers wanting to find out how and where clothing from different brands is made. “They say it’s for competitive reasons, but in reality, a lot of these factories produce for multiple brands at a time. It’s more about protecting yourself.”

Customers of Everlane and other brands like American Giant and Reformation that built their brand messages on the back of transparency and conscious shopping appreciate the respite they offer from corporate facelessness. So as such corporations as Gap and Zara make transparency efforts, customers are repelled. A message of transparency from a fast fashion brand lacks the magic word: authenticity. When you’re H&M, firing off a tweet about sustainability efforts falls on highly skeptical ears.

“H&M comes under fire a lot for their initiatives because they do publicize it,” said Grillon. “When really, they’ve made a ton of effort in support of better wages. But then they talk about it a lot, and then they come under fire a lot for anything at all that goes wrong.”

Small brands looking to break the unsustainable retail system are the underdog, so customers are more willing to work through the problematic issues with them, said Grillon. For corporations, not so much. Grillon said Gap is hesitant to flaunt its transparency efforts because, unless they’re perfect (which, thanks to the messy state of retail’s supply chains, is impossible), they’ll receive backlash. It’s also hard to trust that bigger brands aren’t falling back on transparency in lieu of sustainability.

“Transparency is a means to an end,” said Bayard Winthrop, founder and CEO of American-made brand American Giant. “We believe it has to be part of our value system because the customer is going to find everything out. But being transparent isn’t the end goal.”

Without a believable value system in place, big retail is hard to pass off a message beyond anything other than profit.

“When you talk about ethical fashion, you’re talking about working toward better conditions, higher wages, fewer chemicals,” said Grillon. “That’s going to require raising prices, and that’s a hard pill to for brands to swallow.”

*This story first appeared on Glossy

Know more about transparent supply chains and Everlane’s ‘Radical Transparency’ here