transparency

We Don’t Know Enough About The Impact Our Clothing Has On People And Planet, Fashion Revolution Warns

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Fashion Revolution’s Transparency Index reveals that the top 100 global fashion brands still have a long way to go towards transparency

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Image credit: Fashion Revolution

Many of the biggest global brands that make our clothes still don’t disclose enough information about their impact on the lives of workers in their supply chain and on the environment, new research reveals.

The way fashion is made, sourced and consumed continues to cause suffering and pollution. Fashion Revolution believes that this urgently needs to change and that the first step is greater transparency.

Transparent disclosure makes it easier for brands, suppliers and workers, trade unions and NGOs to understand what went wrong when human rights and environmental abuses occur, who is responsible and how to fix it.

The Fashion Transparency Index 2017, released today, reviews and ranks how much information 100 of the biggest global fashion companies publish about their social and environmental policies, practices and impacts.

The research found that even the highest scoring brands on the list still have a long way to go towards being transparent. The average score brands achieved was 49 out of 250, less than 20% of the total possible points, and none of the companies on the list scored above 50%.

Adidas and Reebok achieved the highest score of 121.5 out of 250 (49% of the total possible points), followed by Marks & Spencer with 120 points and H&M with 119.5 points. However, only 8 brands scored higher than 40%, while a further 9 brands scored 4% or less out of 250 possible points, of which Dior, Heilan Home and s.Oliver scored 0 because they disclose nothing at all.

Out of the premium and luxury brands reviewed, 9 scored between 21-30% of the total possible points, which was higher than the average. The other 10 scored 15% or less.

The good news is that 31 brands are publishing supplier lists (tier 1) including ASOS, Benetton, C&A, Esprit, Gap, Marks & Spencer, Uniqlo, and VF Corporation brands since April 2016. This is an increase from last year when Fashion Revolution surveyed 40 big fashion companies and only five were publishing supplier lists.  This year 14 brands are publishing their processing facilities where their clothes are dyed, laundered, printed or treated. However, no brand is publishing its raw material suppliers. Banana Republic, Gap and Old Navy scored highest on traceability (44%) because their supplier list includes detailed information such as types of products or services and approximate number of workers in each supplier facility.

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Image credit: Fashion Revolution

Meanwhile few brands disclose efforts on living wages, collective bargaining, and reducing consumption of resources (on average 9% of the information required in these categories was disclosed), sending a strong signal to brands to urgently look at their own business models and purchasing practices.

 

There is a long way to go in order for the industry to pay a living wage, as only 34 brands have made public commitments to paying living wages to workers in the supply chain, and only four brands — H&M, Marks & Spencer, New Look and Puma — are reporting on progress towards achieving this aim.  This shows that much more needs to be done and faster by brands to ensure that workers, from farm to retail, are paid fairly.

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Fashion Revolution Co-founder Carry Somers said:  “People have the right to know that their money is not supporting exploitation, human rights abuses and environmental destruction. There is no way to hold companies and governments to account if we can’t see what is truly happening behind the scenes. This is why transparency is so essential.”

“Through publishing this research, we hope brands will be pushed in a more positive direction towards a fundamental shift in the way the system works, beginning with being more transparent.”

Dr. Mark Anner, Director, Centre for Global Workers’ Rights Penn State University said: “The time has come for brands and retailers to make their entire supply chains transparent. The time has also come to establish sourcing practices that are conducive to the human development and empowerment of the workers who work so hard every day to make the clothes we wear.”

Brands were awarded points based on their level of transparency across 5 categories, including: policy & commitments, governance, traceability, supplier assessment and remediation and spotlight issues which looks at living wages, collective bargaining and business model innovation. Brands were selected to represent a cross section of market segments including high street, luxury, sportswear, accessories, footwear and denim sectors.

The data revealed that:

  1. Policy & Commitments – overall score = 49%

The highest concentration of brands scored in the 71-80% range with 11 brands scoring between 81-90% and 16 brands scoring 20% or less. By and large, brands are disclosing the most about their policies and commitments on social and environmental issues.

  1. Governance – overall score = 34%

The largest number of brands (37) score 10% or less. 13 brands fall in the 41-50% range. Marks & Spencer is the only brand to score 100% meaning that they’re disclosing who in the team is responsible for social and environmental issues, along with their contact details, board level accountability, and how other staff and suppliers are incentivised to improve performance.

  1. Traceability – overall score = 7%

Overall brands are disclosing few details about their suppliers. 31 brands are publishing supplier lists (tier 1). 14 brands are publishing their processing facilities. No brand is publishing its raw material suppliers. 23 brands disclose having updated their supplier list at least in the past 12 months, while Target says it uploads its supplier list quarterly and ASOS promises to do so every two months.

  1. Know, Show & Fix – overall score = 16%

The highest concentration of brands (36) fall in the 11-20% range whilst another 31 score less than 10%. Adidas and Reebok score highest at 39%, with 7 other brands joining them in the 31-40% range. Brands often disclose their supplier assessment processes and procedures. However brands share little information about the results of their supplier assessments, and brands don’t publish much about the results of the efforts made to fix problems in factories.

  1. Spotlight Issues – overall score = 9%

Overall, brands are disclosing little about their efforts to pay living wages or to support collective bargaining and unionisation. Few brands are disclosing their efforts to address overconsumption of resources. Marks & Spencer, New Look and H&M scored in the 41-50% range, and no brand scored above 50%. The majority of brands scored less than 10%.

The report provides recommendations for how consumers, brands and retailers, governments and policy makers, NGOs, unions and workers can use the information contained in the Fashion Transparency Index to make a positive difference.

You can find more information at FashionRevolution.org

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Patagonia’s Board Shorts, Bikinis Are Now Fair Trade Certified

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Image courtesy: patagonia.com

Patagonia has taken an important step to change the surf and apparel industries, making its full line of board shorts and bikinis Fair Trade Certified™. Fair Trade offers direct and practical benefits to workers and is part of Patagonia’s broader drive to support workers, elevate communities and do work in a truly equitable way.

For every product made at a Fair Trade Certified factory, Patagonia pays a premium that workers can use to elevate their living standards, and the money goes directly to the people whose hands brought that specific product to life. In addition to the benefits paid directly to workers, Fair Trade Certified factories are required to adhere to Fair Trade USA’s strict standards for safe working conditions and environmental responsibility. Fair Trade benefits have a ripple effect that carries through to workers’ families and communities. Premiums from Patagonia purchases have been used to fund child-care programs and vouchers for medicine and household goods; at a factory in Los Angeles, California, workers voted for a dividend that equaled up to a week’s pay.

“For a long time now, there’s been too little transparency in the garment industry. When we buy clothing, we’re often oblivious to the reality of how it was made—not to mention the true human and ecological costs of the manufacturing process,” said Dave Rastovich, global surf activist at Patagonia. “The factories we rely on aren’t just full of machines; they’re also full of people with families, histories and futures that have been overlooked by the industry for far too long. Fair Trade extends a sense of value, acknowledgment and respect to members of the human family who are often pushed to the margins.”

The Fair Trade certification is one of the many points of difference that set Patagonia’s swim and surf collection apart. These products are field tested by some of the best surfers in the world and incorporate recycled nylon or recycled polyester fabrics, and the women’s swimsuits and bikinis are printed using a laser process that minimizes fabric scraps and waste. The men’s, women’s and kid’s board shorts and bikinis are all backed by Patagonia’s Ironclad Guarantee.

Patagonia’s 48 styles of men’s, women’s and kids’ Fair Trade Certified board shorts and bikinis are available at Patagonia retail stores, partner stores, and on Patagonia.com.

Learn more about Patagonia’s Fair Trade program and watch a video on Fair Trade here.
View photos from Fair Trade Certified factories here.
View hi-res images of Fair Trade Certified Swim and Surf Men’s product here.
View hi-res images of Fair Trade Certified Swim and Surf Women’s product here.

About Patagonia
Founded by Yvon Chouinard in 1973, Patagonia is an outdoor company based in Ventura, California. A certified B Corp, Patagonia’s mission is to build the best product, cause no unnecessary harm and use business to inspire and implement solutions to the environmental crisis. The company is recognized internationally for its commitment to authentic product quality and environmental activism, contributing over $82 million to date in grants and in-kind donations to date.

About Fair Trade USA
Fair Trade USA is a nonprofit organization that promotes sustainable livelihoods for farmers and workers; protects fragile ecosystems; and builds strong, transparent supply chains through independent, third-party certification. Its trusted Fair Trade Certified™ label signifies that rigorous standards have been met in the production, trade and promotion of Fair Trade products from over 80 countries across the globe. Recognized as a leading social venture by the Clinton Global Initiatives, the Skoll Foundation and Ashoka, Fair Trade USA also provides critical capacity-building programs at origin, and educates consumers about the power of their purchase. Visit www.FairTradeUSA.org for more information.

*This story first appeared on Patagonia Works

Are Ethical Brands Greenwashing?

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5 questions to figure out which brands are LEGIT

As a responsible shopper looking to do the right thing, you might think if a brand is openly talking about their environmental or labor practices, they’re probably legit. And if they show you a picture of a happy worker or an NGO partner, it’s probably a sign of good intent and practices, right? Swipe that credit card.

WRONG!

Buyer beware — greenwashing is definitely a THING, and it’s not just the big fast fashion brands.

We’re always getting questions about H&M, Zara and others. Are they “greenwashing”? (i.e. exaggerating their environmental chops or social practices in an effort to make themselves seem sustainable, and even diverting attention away from negative practices like child labor, or the consumption-driven fast fashion model. Ew.)

But recently, savvy readers, like yourselves, have been asking more questions about the credentials of smaller “ethical fashion” or “eco-fashion” brands, and whether their practices add up to all their marketing.

Greenwashing is never good. But with the smaller “ethical” new kids on the block, it’s almost even more dangerous if they don’t stack up to their claims. It seeds pessimism and cynicism among consumers, just as a new vision of a sustainable industry is starting to gain traction.

So over the last month we did a mini experiment to dig into the practices of a few exciting and popular “ethical” brands, who outwardly celebrate their positive impact, intentions or transparency, and see what evidence they had to back up these assertions.

We looked at:

  • Everlane, the “radically transparent” basics brand
  • Warby Parker, the “social impact” eyeglasses company
  • Kowtow, a fairtrade, organic cotton brand making knitwear and basics from New Zealand
  • Krochet Kids, a social impact brand, empowering women in Uganda and Peru

We studied their websites and social media, contacted them through numerous channels, looked at publicly available records and everything else we could find. We did an intensive search beyond what a consumer could do in an afternoon, but without using any tools you wouldn’t have at the ready.

We went to these brands with a lot of questions surrounding labor practices, environmental practices, community engagement, management practices, size and business model, intention, innovation and transparency.

Below we’ve shared some highlights, AND, as we did this in-depth research, we pieced together the five questions we realized could help you sniff out greenwashing. (If you’re a nerd for this stuff like us, you can view everything we found on their updated brand pages on our Project JUST wiki)

So check out what we found and TRY these questions on for size:

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Curious about fibres?

1. First, check out what kind of fabrics / materials they are using.

Fabrics are an easy way to really change the impact of a supply chain for the better. PLUS it’s a super easy way for you as a shopper to know which brands are serious about changing the game. Raw materials are a big portion of the product, and consequently, its environmental and social impact. As a designer or a brand, committing to a restricted set of fabrics can be difficult — sustainable fabrics can be more expensive and not as easy to source — but it pays off in both your impact and performance in the end. So how did the brands we picked stack up?

Kowtow uses organic and fair trade cotton. Organic cotton is proven to be significantly better for people and planet, and fair trade means farmers and workers get fair wages for their work.

Krochet Kids uses some sustainable fabrics, but also uses acrylic and polyester (oil). They’re in the process of rolling out an organic cotton line.

While Everlane uses some natural fibres, none of them are certified from sustainable supply chains — you can read all about the impact of basic fabrics here. And, they also use synthetics like nylon (again, oil).

Warby Parker uses cellulose acetate, titanium, and stainless steel in its frames for both eyeglasses and sunglasses. Cellulose acetate is usually made from wood pulp. In February 2014, the brand reported via its Facebook page that Warby Parker frames are made of acetate that comes from a family-owned Italian manufacturer.

2. Second, do they have any certifications?

When you’re shopping, check out the tags — any symbols or certifications there? A certification offers a brand a rigorous program of standards and assessment, and a signal to shoppers of monitoring, high standards, and intention. A brand doesn’t have to have a certification to do good work, but often times, brands use them as a roadmap to build out a more sustainable supply chain. You have to be cautious though — some certifications aren’t that rigorous, or have major flaws in monitoring or auditing what’s actually happening on the ground. You can read more about certifications in our New Slang dictionary.

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Fair Trade Cotton UK

Survey says?

Kowtow has organic and fair trade certifications. Plain, simple and thorough.

Warby Parker is a BCorp, but we couldn’t find any information about what this means in terms of their environmental impact, or how they treat their workers. However, their recently released response to the California Transparency in Supply Chains Act means that the brand has now made its Code of Conduct publicly available (check out this release of new information on our Warby Parker brand page).

Krochet Kids is launching an organic line, and has their own special impact measurement tool that they use at each of their facilities.

Everlane doesn’t have any certifications that provide us with an easy signal to show that they’re trying, but it’s clear they like to set things up their own way. For their supply chain, they have three pillars of work: they started with transparency, are currently building their compliance, and sustainability is next. They do hold the factories they work with accountable to a 85% or higher score on the labor audit. If they don’t hit the mark, they step in with a corrective action plan, in partnership with their auditing firm, Intertek, to help.

Certifications aren’t for everyone, nor do they always work, but for the shopper and for us, it’s an easy way to know what standard a brand is holding themselves to, what are their intentions and to look into what’s actually happening to meet it.

3. Third, how transparent are they… really?

This basically comes down to what — and how much — they’re truly sharing with us. What’s on their website? Their social media? What data do they share to back up their claims of social or environmental impact?

Let’s stack ’em up.

Everlane: As fashion supply chain nerds, ever since this brand came out with their tagline, radical transparency, we’ve been curious to know what constituted “radical” from the information they shared. After all, “radical” by definition implies something beyond average. But, when we looked on the Everlane website, we didn’t really find much beyond where some of their factories were located, and what they made. What were we looking for? How they guaranteed fair wages and safe working conditions, what kinds of environmental policies they had in place, and their intentions for future improvement.

So we reached out to their team with a list of questions, and low and behold, got to sit down with the Founder & CEO, Michael Preysman —getting serious now.

He shared quite a bit of info with us including:

  • Their code of conduct
  • The average score of their factories on quarterly audits: 90.1%
  • The number of times a year their team visits their factories: 3
  • Their current lack of environmental policies, but their intent to work on this as the next phase in monitoring their supply chain
  • And lots more! (available for you to see behind a tiny little paywall, but trust us it’s worth the 5 bucks)

So why isn’t all this info available on their website?

Michael said (paraphrased) that they prefer not to reveal their work until it’s fully complete, so that the company can figure the right strategy to communicate the information to their customer, in a way that makes sense.

Legit?
You tell us. Given that these guys have shaken things up before, we’re excited to see what they churn out in the coming months to truly be “radical” in their supply chain practices.

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More than just transparent pricing?

Warby Parker: When it came to Warby Parker, we received not one answer to our questions. Not one! Between January and February 2017, we reached out six times to the PR company and twice to the brand, who then redirected us back to the PR company (head spinning emailing 😕).

This brand that claims positive social impact, and even has a BCorp certification (!), never answered our questions about whether they can trace their entire supply chain, where their suppliers are located, if they have a code of conduct, how much the workers in their supply chain are paid, how they monitor their social and environmental practices, and what their goals are to decrease their negative impact. In just the last two days, they did release a new set of info to comply with the California Transparency Act. Great – but we’ve still got questions.

Kowtow and Krochet Kids: These two brands both have a lot of information available on their website. Krochet Kids was willing to answer any question we threw their way, while Kowtow had enough info on their website and via their certifications to thoroughly answer our questions.

4. Do they express intention for improvement?

No brand is perfect. But given the major impact of fashion supply chains on people and planet, it’s important to at least have the intention and plans to continue to improve. Do they have goals on their website? Any plans that they share with the media, or consumers?

Krochet Kids told us all about their future plans. So did Everlane. Warby Parker — no answer and nothing available on their site. And finally Kowtow, who by committing to only use fair trade and organic cotton, has restricted their growth and made a sustainability commitment for the long run.

5. Fifth, and finally, will they get back to you / us / anyone?

When you ask a question — do they respond? And do they give you a straight answer?

After we emailed them this month, Everlane gave us a sit down with their founder & CEO. We had also reached out to them before with questions through various consumer channels, and had received responses — but not nearly as comprehensive as this. We appreciate this, but we also recognize that not everyone is afforded this kind of access. We hope they continue to strive to be as responsive to consumers as possible to attain this same standard of radical transparency.

Krochet Kids’ CEO and COO had a phone call with us after they answered our comprehensive survey. We were impressed with their brand, and especially with their willingness to share and open up to us.

Kowtow and Warby Parker both didn’t answer our repeated efforts to get in touch with them with our questions. That said, Kowtow has a ton of information about their brand and practices available on their website for anyone (not just supply chain dorks like us) to see. Warby Parker? Not so much.

So what did we learn?

In this day and age, with consumers buying products made by global supply chains, and with issues of human trafficking, child labor, worker abuse and environmental violations — the consumer should have a right to know how the product they’re paying for is made and be able to see the evidence to back it up.

And with brands like these, consumers should also know legitimately that the brand’s vision and proclaimed values match how they treat workers in their supply chain, and how they treat our planet. If you’re paying, you deserve to know.

So don’t get taken for a ride— keep searching, keep asking questions and tell your friends to ask, too. From our experience, you might even get to sit down with the CEO.

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*This story first appeared on New Co Shift

More Companies to be Assessed in Second Sustainable Cotton Ranking

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Pesticide Action Network (PAN) UK, Solidaridad and WWF have released the list of companies that will be assessed in the new round of their Sustainable Cotton Ranking to be published in October 2017. The second edition of the ranking will include major companies from all continents, including from countries such as China and Brazil, and online companies such as Zalando and Amazon. As in 2016, the ranking will score companies on their policy, traceability and actual uptake of sustainable cotton.

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On the Target List

This year the scope of the ranking will be broadened. The target list of companies (PDF) has been expanded to offer a more global representation of consumer-facing companies estimated to use more than 10,000 metric tons of lint cotton annually and include companies from emerging markets and online retailers.

Creating a list of the largest corporate cotton users is challenging as most companies do not publish the volumes they use in their products. PAN UK, Solidaridad and WWF welcome feedback from any companies who believe their cotton use has been under or over-estimated, as well as those whose may have been omitted from the list and wish to be included.

Scoring Company Progress

The first Cotton Ranking (PDF) published in 2016 showed that the majority of companies using most cotton globally were failing to deliver on cotton sustainability, with just eight companies out of 37 showing positive progress in the ranking.

By conducting a second Cotton Ranking in 2017, PAN UK, Solidaridad and WWF expect to see that more companies have taken steps forward on their sustainable cotton policies, traceability and sourcing. As transparency and accountability to customers is considered paramount by the three NGOs, only publicly available information will be used in scoring company performance. The report will be published in October 2017 so as to take into account companies’ public reporting on their 2016 performance.

Updating Market Trends

The report will also include a market update on the available supply and uptake of cotton from the main cotton sustainability standards (organic, Fairtrade, Cotton Made in Africa and Better Cotton). While around 10% of global cotton supply was grown according to one of these standards in 2014, less than a fifth of this amount was actually being bought as more sustainable cotton, with the rest being sold as conventional due to lack of demand from top brands and companies.

Notes

Cotton Ranking

The Cotton Ranking 2016 report can be downloaded here along with the briefing ‘Mind the Gap: Towards a More Sustainable Cotton Market’ (PDF) published in April 2016 which gives an overview of the market for more sustainable cotton.

Thirty-seven companies estimated globally to use the most cotton in their products were scored on their sustainable cotton policy, sourcing, and traceability. Only publicly available information was used in scoring company performance.

The Cotton Ranking focuses on companies rather than individual brands as, while sustainability practices can vary significantly between different brands, entire companies need to change sourcing practices in order to transform cotton production.

Cotton Globally

Cotton is grown in around 80 countries worldwide and is a key raw material for the textile industry, accounting for around 32% of all fibres used. Sustainability issues include the widespread use of pesticides, with 6.2% of global pesticide sales associated with cotton production (which uses just 2.3% of the world’s arable land), and intensive water use, with 73% of global production currently dependent on irrigation.

While many smallholder cotton farmers are driven into debt by the cost of pesticides and fertilisers, sustainable cotton production has the potential to lift farmers out of poverty by providing a more stable income and improving working conditions.

A number of sustainable cotton standards have been developed in the last 35 years, starting with Organic cotton in the 1980s, followed by Fairtrade in 2004, Cotton made in Africa (CmiA) in 2005 and the Better Cotton Initiative (BCI) in 2009. All provide guidance and support for farmers and seek to assure retailers and consumers that the cotton in the products they buy are being produced using sustainable farming methods.

The supply of sustainable cotton has never been greater (estimated to be at 13% of global supply in 2015) but uptake by companies, essential for mainstreaming sustainable cotton, remains low at approximately 17% of what is available.

*This story first appeared on Solidaridad Network

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

Why Luxury Brands Still aren’t Embracing Sustainable Fashion

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eileenfisherfactorybigDesigner Eileen Fisher made an eight-year commitment to sustainable fashion four years ago, after having “an epiphany about the earth” and her responsibility as the owner of her own company. In the years since, the brand has been vocal about these efforts.

“We made a commitment that, by the year 2020, we would eliminate our top volume fabric, viscose,” said Amy Hall, director of sustainable consciousness at Eileen Fisher. “The only thing was, we didn’t know how to do that then.”

During the WGSN Futures conference on November 10, Hall said that pushing Eileen Fisher’s brand to become more sustainable meant figuring things out along the way. Eileen Fisher has always been upfront about this journey, choosing to call itself “sustainably conscious,” not sustainable, because it’s still putting out waste into the world. The company lists the factories it works with and the fabrics it uses, plus it lists plans for future innovations. This month, it will launch Remade, a recycled line of clothing made from past designs that customers donated back to the brand rather than discarding. A dress in the collection, for instance, could be comprised of three pairs of used pants.

Right now, transparency in fashion is trendy. As they figure out the future of sustainability in retail, startup retail disruptors like Everlane and American Giant lay bare their pricing models and supply chain partners in an attempt to rope in conscious customers and keep them along for the ride. Mass companies like H&M, Zara and Gap Inc. have adopted similar habits in order to do the same; for fast fashion brands, speaking out about transparency and sustainability helps keep protesters at bay.

Among luxury brands, though, there’s some hesitancy to display company practices when it comes to sustainability and transparency. Hall spoke to an experience a member of her team had with her counterpart at a British brand, which Hall wouldn’t name specifically.

“We asked the counterpart if the cotton they used was organic, and she said no,” said Hall. “She said even if it was, we wouldn’t say, because organic doesn’t sell in the luxury market. To us, that’s a call to action.”

Hall said that this mindset emphasizes the idea that sustainably made clothing has to be, above all, good product. But she pressed that brands have a responsibility to educate and engage customers on sustainable measures so that they can take further action as individuals.

Marco Lucietti, the global marketing director of Isko Textile, said that sustainable brands can’t “force-feed people with what they’ve done.” Instead, they should just make commitments and stand by them. Sustainability in fashion can still carry the mindset of burlap, rather than luxury.

“People have a conception about what sustainable means in fashion,” said Marco Lucietti, global marketing director of Isko Textile. “But it’s not granola, hippy shit.”

Lucietti said that, as customers grow accustomed to brands being more transparent about their supply chains and efforts to improve workers’ rights and the environmental impact of production, this mindset will shift, both of the consumer and of the legacy brands.

On the factory level, the shift has already begun to take place. Jag Gill, founder of Sundar, a digital materials sourcing platform, said that most brands, even high-end ones, are beginning to open up their factory lists in order to find ones with cleaner supply chains.

*This story first appeared on Glossy

Black Friday Rings Up the Financial Costs of Fast Fashion

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Investors should account for raw materials sourcing and resource constraints in their investment decision-making.

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Black Friday has become almost as popular as Thanksgiving Day itself. Each year, retailers open their doors earlier. This year, Macy’s announced it would push up its opening hours to 5 p.m. Thanksgiving Day — perhaps before some have even sat down to eat their turkey dinners.

Investors in apparel and retail companies are surely excited about this day and the approaching holiday season. However, there is one consideration they may not be bearing in mind, but which could have financial ramifications for the companies they are investing in.

Is fast fashion always profitable?

The problem with fast fashion, and the hype for huge savings on days such as Black Friday, is that sustainability issues around raw materials sourcing — oftentimes overlooked — could create supply disruptions and result in higher raw material costs over time.

Concerns related to climate change, water scarcity, land use, resource scarcity and conflict in the supply chain increasingly are shaping the industry’s ability to source materials, including cotton, leather, wool, rubber and precious metals. The ability of companies to manage potential materials shortages, supply disruptions, price volatility and reputational risks is made more difficult by the fact that they source materials from geographically diverse regions, usually through complex supply chains that often lack transparency. Further, the type of risk faced for different materials can require different solutions.

Take cotton. According to the World Resources Institute, 57 percent of cotton is grown in areas with high to extremely high levels of water stress. Moreover, given that it takes roughly 20,000 liters of water to produce a kilogram of cotton, the crop is susceptible to shifting weather patterns and droughts, while also contributing to increased water scarcity.

Further, innovation to find sustainable alternatives for these materials is lacking. There is currently no commercially viable textile recycling techniques for the major fibers used in apparel, which presents a major challenge to a closed-loop system.

Company solutions

Apparel companies understand this risk, and some are taking steps to ameliorate it. In its FY2013 Form 10-K, Hanesbrands discussed its exposure to shifting cotton prices through a sensitivity analysis. The company concluded that an increase of $0.01 per pound in cotton prices would influence the cost of sales by $3 million at 2013 production levels.

In September, the H&M Foundation invested $6.5 million in a four-year partnership fund to research and develop new textile recycling technologies, with the aim of recycling blended textiles into new fabrics and yarns. Patagonia will be the first to use Tencel fiber in its products beginning in early 2017. Tencel is made from post-industrial cotton waste, and producing it uses 95 percent less water than traditional cotton production.

We know there are risks in each apparel company’s supply chain based on what raw materials they use to make their products. What we don’t know is how much of each raw material the major apparel companies use, and what the risks associated with each material are.

Protect your profits

It’s up to investors to engage with companies and ask them questions such as: What risks are associated with the materials the company is most reliant on, and how is the company innovating to mitigate these risks? To make better investment decisions, investors should consider environmental, social and governance factors (such as resource constraints and where companies are sourcing their materials from) in addition to traditional sales numbers and valuation metrics.

This Black Friday, I encourage you to consider these questions and engage with the companies you invest in by asking how they are ensuring the environmental and financial sustainability of their business.

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Figure 1. The current state of disclosure on raw material sourcing by the largest publicly traded Apparel, Accessories & Footwear companies. Nine of the top ten companies in this industry disclose on this topic in their annual financial reports– but it is not effective disclosure because there are no comparable quantitative metrics or specific information around each material. More details on how they are managing their raw materials is needed.

Source: SASB analysis performed between May and August 2016 using the latest annual SEC Filings (i.e. Form 10-Ks and 20-Fs) for the top companies, by revenue, per SICS industry (maximum of 10 companies). 

*This story first appeared on SASB.