Adidas and Reebok scored the highest and Dior, L.L. Bean and Forever 21 scored among the lowest in this year’s Fashion Transparency Index. The report was released last Monday, the fourth anniversary of the Rana Plaza collapse.
Just in its second year, the Fashion Transparency Index ranks 100 of the biggest global fashion and apparel brands based on how much information they disclose about their suppliers, supply chain policies, and social and environmental consequences. The methodology was developed with input from a group of more than 20 industry experts and academics.
Brands were reviewed in five key areas and scored on a 250-point scale, which was then converted into percentages. The five areas, along with their degree of contribution to the final score, are as follows:
- Policy and commitments (20%) — What are the brand’s social and environmental policies, and how are they being put into practice?
- Governance (5%) — Is there someone at the brand who is responsible for social and environmental consequences, and can this person be contacted?
- Traceability (34%) — Does the brand publish a list of its suppliers throughout the supply chain?
- Supplier assessment (30%) — How does the brand assess its own supplier policy implementation, and how does it deal with any problems that surface?
- Spotlight issues (11%) — Is the brand doing anything to ensure that workers are paid a living wage? Does the brand watch its own resource consumption?
There are, of course, caveats to this approach. Since the scoring relies on publicly disclosed information, brands that do not publicize their supplier code of conduct, for example, would receive zero points in that area. This does not necessarily mean that those brands lack these codes. Indeed, when the first Index was released last year, a spokesperson from Chanel (which scored at the bottom both 2016 and 2017) criticized it for evaluating how well brands communicate their sustainability initiatives.
Reebok and Adidas both scored 121.5 out of the 250 points, or 49%. This was the highest among the 100 brands. Other high scorers in the 41%–50% range were Marks & Spencer, H&M, Puma and Gap Inc. brands (Gap, Banana Republic and Old Navy). On the opposite end of the spectrum, Dior, Heilan Home and S.Oliver scored zero points. Brands with just a couple more points range from luxury fashion (Chanel) to teen favorites (Forever 21 and Claire’s Accessories) to the President Trump-approved (L.L. Bean).
Things get interesting when the scores are broken down by area. It should be no surprise that the area of policy and commitments has the greatest number of brands scoring above 70% (27 brands in total), as well as the fewest number of brands scoring 10% or below (seven brands). After all, it’s much easier to publish a supplier code of conduct than it is to prove that those policies and procedures are having an effect.
Just compare with, well, the other four areas. The supplier assessment area appears to be particularly challenging, with no brand scoring above 40%. In scoring this area, the Index looked at whether brands are (1) assessing suppliers to make sure they’re adhering to policy; (2) disclosing the results of their supplier assessments; and (3) publishing what they’re doing to fix problems that are discovered through supplier assessments.
Source: 2017 Fashion Transparency Index
As you can see from the pie charts above, few brands disclose assessment findings for supplier facilities that are tier-2 and beyond, yet that is where much of the risk lies. Supplier audits can also vary dramatically in effectiveness, depending on whether they are announced or surprise visits. Pre-announced visits can turn performative, allowing suppliers to hide underage workers or falsify records ahead of time, for example. However, pre-announced visits would also work well for less scrupulous brands that prefer not to unearth issues of noncompliance that then have to be dealt with.
There is a similar gap between intention and impact on the issue of living wages. While 34 brands have made commitments to paying workers in the supply chain living wages, only four of them — H&M, Marks & Spencer, New Look and Puma — have reported progress.
When it comes to publishing lists of suppliers, only 10 out of the 100 brands disclose suppliers beyond tier-1. Those 10 brands include H&M, Target and Gap. Nearly a third of the 100 brands publish lists of their tier-1 suppliers, an increase from last year’s Index showed.
While there is still much progress to be made, the fashion industry is slowly moving toward greater supply chain transparency — driven by consumer demand if nothing else. H&M may still do more social and environmental harm than good, but it is becoming the standout among its fast fashion peers.
In the meantime, if your standards for corporate social responsibility are a tad higher, there is always Project JUST.