LONDON, United Kingdom — Fashion’s annual transparency scorecard has come back, and the industry’s been awarded a failing grade.
Non-profit Fashion Revolution’s review of 200 major brands and retailers’ public disclosures gave the companies an average rating of 21 percent for the transparency of their supply chains. The index, now in its fourth year, scores companies on a 250-point scale based on their disclosure of social and environmental policies, as well as information about how responsibility for these are governed within the business, who their suppliers are and whether they provide information about the impact of their sustainability initiatives.
Though there are signs of improvement from previous years, there remain major gaps in the information most fashion companies provide, particularly when it comes to disclosing the effect of social and environmental commitments.
The fashion industry still operates in an opaque manner, which is a huge barrier to change
“The fashion industry still operates in an opaque manner, which is a huge barrier to change,” said Carry Somers, co-founder of the Fashion Revolution movement, a global campaign for systemic reform of the industry. “Exploitation thrives in hidden places.”
To be sure, some brands have made progress to improve disclosure and provide more information. For the first time, a number of brands scored above 60 percent, including Adidas--the highest scoring brand at 64 percent. Reebok, Patagonia, Esprit and H&M rounded out the top five.
While Fashion Revolution has increased the number of brands it looks at each year, the average score among the 98 brands reviewed in 2017 has increased 9 percent since then, while the 150 brands reviewed last year have seen a 4 percent increase in average score. Year-on-year, Dior is most improved, gaining 22 percent compared to last year when it disclosed nothing.
At the other end of the spectrum, five brands scored no points at all. That includes the namesake brand of Tom Ford, who was recently named the new head of the Council of Fashion Designers of America.
The Fashion Transparency Index was launched in response to the 2013 Rana Plaza disaster in Bangladesh. When the building collapsed, killing more than 1,000 workers, people had to dig through the rubble for clothing labels in order to establish which brands were producing clothes there. It shone a devastating spotlight on industry practices of subcontracting and poor worker safety that had existed for years in the shadows.
Besides believing transparency is the right thing to do, it also makes good business sense
First published on the anniversary of Rana Plaza’s collapse in 2016, the index has served as an annual benchmark of the information major fashion brands disclose. It’s pushed companies to provide more information to the public and created a degree of accountability within the industry.
Brands are also coming under growing pressure from consumers to provide details that show their clothes have been made in an environmentally-friendly and ethical manner. According to BoF and McKinsey & Company’s latest State of Fashion report, nine out of 10 Generation Z consumers believe companies have a responsibility to address environmental and social issues. Fashion Revolution’s WhoMadeMyClothes hashtag has been posted more than 400,000 times on Instagram.
“Besides believing transparency is the right thing to do, it also makes good business sense,” said Stefan Seidel, head of corporate responsibility at Puma Group. “Our customers want to be sure that our goods are not made in sweatshops.” The company scored 58 percent in this year's Fashion Transparency Index, slipping out of the top five from last year.
Despite some signs of progress, there’s still a long way to go. Even when it comes to hot button issues like gender equality and climate action, brands remain highly opaque. According to this year’s report, only three brands publish any information about incidents of gender-based violations in their supply chain and only around a third publish annual gender pay gap data. Likewise, while 55 percent of the 200 brands reviewed are publishing their annual carbon footprint, fewer than 20 percent disclose the emissions from their supply chain, where the vast majority of pollution occurs.