Is Your Favorite Fashion Brand Transparent with its Supply Chain Sustainability?

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Levi Strauss & Co, H&M and Inditex, which owns the popular brand Zara, rank the highest among fashion brands when it comes to supply chain transparency, according to a new report published by the Ethical Consumer in partnership with Fashion Revolution.

The Fashion Transparency Index scored fashion companies according to how well they publicly communicate their supply chain sustainability initiatives. The report comes at a time when both consumers are demanding more information about how the products they buy are sourced and made and as growing governmental regulations are forcing companies to look deeper into their supply chains to weed out forced labor and other unsustainable practices.

To rank fashion companies on the transparency index, Ethical Consumer and Fashion Revolution asked 40 fashion companies to fill out a questionnaire about their policies and supply chain activities and communications. Using that information as well as publically available data from the companies’ websites and annual reports, a score of 0–100% was given to each company.

Levi Strauss, H&M and Inditex were the only three out of the 40 fashion companies reviewed that scored above 75% on the Fashion Transparency Index, gaining high marks in the categories of supply chain policy and commitments, tracking and traceability, social and environmental auditing, engagement and governance.

Companies With the Worst Transparency Scores

Conversely, some popular luxury designer brands ranked the lowest for supply chain transparency. Chanel, Hermès and Claire's Accessories received the lowest scores on the index, with Chanel at the bottom with a score of 10% and Hermes and Claire's both receiving a score of 17%. Other designer names like Fendi, Prada and Michael Kors got low ranks, with 19%, 21% and 21%, respectively.

The average score on the index among the fashion companies was 42%, putting the average company in the low-to-middle level of the index. The companies at this level are making some effort to improve their supply chains but are offering little supply chain information to the public, the report said. These companies have taken some positive steps toward transparency, but “still have a long way to go toward supply chain transparency.”

The top ranked companies, however, are doing more than most other fashion brands to make their supply chain practices transparent to consumers, the report stated. Levi Strauss, H&M and Inditex seem to have “robust systems” in place to track, trace, monitor and improve labor and environmental conditions in their supply chains. Yet the report still stated these companies can drill down further in their supply chains, to tier-2 suppliers and beyond and share this additional information with consumers.

“Overall, every brand should be doing more to communicate with the public about their strategies and performance on social and environmental issues throughout the supply chain. But the luxury brands are the biggest laggards; most publish nothing more than a Code of Conduct,” the report stated.

Industry Response

Some of those luxury brands have pushed back against the Fashion Transparency Index, criticising the methodology used to rank the company. The report said that only 10 of the 40 companies reviewed returned questionnaires, meaning the remaining 30 companies were ranked solely on what information is publicly available on their websites and annual reports.

“For the companies that did not reply, it is impossible for our researchers to know anything beyond what they are communicating publicly online,” the report said. “Therefore these companies may have received lower scores while companies who did fill out the questionnaire had the opportunity to tell us more and thus potentially score higher. Any company wishing to have their score updated may do so if new information is made available for our research team to investigate.”

A Chanel spokesperson reportedly told WWD the Fashion Transparency Index does not measure what sustainability actions a company is taking and “only evaluates the communication policies of brands relative to these topics.”

“Like three-quarters of the companies questioned, if Chanel chose not to answer the questionnaire, it is because the reality of our actions seems more important to us than any related media coverage,” a spokesperson told WWD.

Of the dozen lowest-ranking companies on the Fashion Transparency Index, 11 did not return questionnaires, including Chanel. Prada, which received a low score on the index of 19%, putting it near the bottom of the index, was among the 10 companies that returned a questionnaire on its supply chain sustainability actions and communications. Prada received low scores in social and environmental auditing, engagement and collaboration  as well as tracking and traceability.

Seven of the top 10 scoring companies on the index did return questionnaires.

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