In response to the public outcry following the 2013 tragedy in Rana Plaza, many companies in the fashion industry decided to undertake concrete actions of social responsibility. Today, the reaction to the crisis kicked off by Covid-19 could lead the fashion system to invest even more in environmental and social issues. Consumers emerged from the pandemic with greater awareness and a greater sense of responsibility and are now demanding sustainable fashion. However, without real transparency on brand policies and practices, the risk is that this demand will remain unfulfilled.

An index for transparency

Transparency as a means for allowing brands to improve and respect their commitments on the issue of sustainability is also the mission of the Fashion Transparency Index promoted by Fashion Revolution, which is now in its fifth edition. The 2020 Index highlighted the brands that are becoming more transparent, even if in absolute terms they still have a long way to go before becoming genuinely virtuous. The 250 brands analysed, companies with a revenue superior to 400 million dollars, were scored on five key areas: social and environmental policy and commitments, governance, traceability along the entire supply chain, supply chain due diligence and remediation where necessary, and spotlight issues like gender equality, equal wages, waste management, circularity… Each one of these areas translates into 1 percentage point in creating the 23% average of transparency score, up two percent from last year, but still quite low.

 Virtuous and not so virtuous

Leading the way in transparency are fast fashion and sportswear brands which, because of the public scrutiny they were first subjected to in the Nineties, have since been forced to improve: H&M is first in the classification with 73%, followed by C&A, Adidas, Reebok, and Esprit (between 61% and 70%). There are then the American retailers Marks& Spencer, Patagonia, The North Face, Timberland and Vans (all between 51% and 60%). Instead, the luxury segment is not so virtuous, with the only exception being Gucci, which arrived at 48%, while names like Balenciaga, Bottega Veneta and Hugo Boss are all below 40%, thus confirming the traditional habit of luxury brands to keep information pertaining to sourcing and production secret. At the very tail end of the ranking, with a score between 0% and 5% are names like Canada Goose, Dolce & Gabbana, Max Mara and Bally.

A transparent supply chain

While secrecy represents the road to abuse, greater transparency in the supply chain is a key factor in ensuring brands take a responsible approach. It would have made the difference in the case of Rana Plaza, where the names of the brands involved were recovered with great difficulty only after having dug through the rubble of the building in search of clothing labels. Today, because of the pandemic, many brands and retailers have cancelled their orders and not respected their prior contractual agreements with suppliers by falling back on the excuse of “force majeure”. A conduct that has thrown many of the companies of manufacturing countries into financial crisis, while leaving many workers without a salary (the Workers Right Consortium estimated that orders worth an estimated 20 billion dollars were cancelled in Bangladesh, Cambodia, and Vietnam). The brands in question had the resources, possibility, as well as the moral duty to respect their previous agreements, but only when they were subjected to public indignation and scrutiny did some of them – like H&M and Primarts – announce they would honour their previous commitments.

Something however is changing: the good news, as communicated by the Fashion Transparency Index, is that the percent of brands that disclose their main manufacturer lists has increased from 35% to 40%. The score however is still low on the transparency of processing facilities (24%) and raw material suppliers.

Similarly, if companies are transparent in communicating the carbon footprint of their offices, direct manufacturing facilities, and stores, then only 16% of brands include in this calculation the emissions of their supplier chain, which in reality accounts for most of the pollution generated during the lifecycle of a product.

Box: 73% of Italian businesses invest in sustainability

This is the result of the survey conducted by Cikis, a consultancy firm for fashion businesses, after polling a sample of 83 businesses in the textile/fashion industry. However, if 73% invests in sustainability, a good 61% still is not clear on exactly how to do so, while 41.5% acknowledges that they do not have a trained managerial team, and 19.5% is not worried about this issue. When speaking of sustainability, for Italian companies, it is above all an environmental question, while social aspects are considered only to a lesser degree, as is the case of just 9%. In any case, investing in sustainability has been a positive experience for the majority of the companies polled (66.2%).