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Ethical Issues in the Fashion Industry.
This product guide focuses on UK high-street retail brands.
The good news is that many high-street retailers are currently responding well to their critics and, unlike other industries, can be seen to be taking a proactive approach to addressing some of these issues, especially around workers’ rights.
The bad news is that, when it comes to the environment and specifically toxic chemicals, there is a long way to go.
Most of the high-street retailers perform well against Ethical Consumer’s supply chain management rating.
In 2011, we introduced a new, more sophisticated supply chain rating which went beyond looking for a basic workers’ rights policy and looked more widely at several key aspects of supply chain management.
The table below tracks the progress of 11 high-street retailers who have featured in each of our guides to clothing since 2011. There have been noticeable improvements in companies receiving the best or middle rating for their supply chain management policies.
Uniqlo, ASOS, H&M, Next and Arcadia have all moved up to a best Ethical Consumer rating.
ASOS and Uniqlo have both made considerable improvements over this time.
In 2011, both companies produced a basic code of conduct which covered freedom of association, discrimination, child labour and forced labour.
By 2017, ASOS’ code of conduct had been brought in line with the Ethical Trading Initiative’s base code and it was engaging Action, Collaboration and Transformation (ACT) on issues such as living wages within its supply chain.
Uniqlo had become a member of the Fair Labour Association and had produced more details on its website regarding how it monitored its supply chain.
In the case of Gap, our research shows that its reporting of auditing processes, audit results and involvement in projects related to difficult issues has weakened.
With Monsoon, unlike in 2011, it did not respond to a questionnaire so we lacked detail, in particular about its work with homeworkers.
Calls for Transparency
In response to calls by civil society, many of the clothing brands featured in this guide are publishing their factory supply lists.
In this guide, we have not marked down clothing retailers sourcing from oppressive regimes if they have published a full list of their factory suppliers with names and addresses. We feel that this level of transparency should be encouraged.
Brands which have published a full list of their suppliers are: ASOS, H&M, GAP, M&S and Uniqlo. Inditex (Zara) has some information on where its suppliers are based.
Sadly, policy and practice within this industry still does not match up. Nearly all the high-street brands lose a mark under workers’ rights for violations against workers in their supply chain.
This can be ascribed to the fact that many of the brands in this report produce cheap, mass-produced clothing. Colloquially known as ‘fast fashion’ it has engendered a race to the bottom, pushing companies to find ever-cheaper sources of labour.
Quick turn around
Many of the high-street clothing retailers have adopted a production approach where turnaround times for clothing to be designed, manufactured and sold is achieved within weeks. Retailers can now react to changing trends, or the weather, at a drop of a hat.
This shift in production has also gone hand-in-hand with a reduction in prices. Apparently though, “consumers will spend more over a year with regular low cost ‘fashion fixes’ than on more exclusive pieces that they fall in love with and will treasure.”
Tamsin Lejeune from the Ethical Fashion Forum argues that for the retailers it is about how much product can be shifted, and how quickly.
“Shifting product quickly means producing a lot of stuff at as low a price as possible, which puts pressure on suppliers to make huge volumes at a low price to tight deadlines. That pressure caused Rana Plaza in 2013.”
Fast fashion costs workers dearly. In July 2016, SACOM found that factories producing clothes for GAP, H&M and Inditex (Zara) regularly forced workers to work excessively long overtime to meet disproportionally tight delivery time; workers were exposed to toxic chemicals, cotton dust and hazardous dusts without protective gear; there was poor worker representation and workers did not receive a living wage.
In June 2017, an investigation by Danwatch and the Guardian found that in Cambodia, over the past year, more than 500 workers in four factories, supplying Puma, Nike, Asics and VF Corp, were hospitalised after fainting. According to unions, the use of short-term contracts was a key source of stress and exhaustion.
Business objectives of profit maximisation versus producing products under conditions which are fair to the workers, environment and animals is the dilemma facing many of high-street retailers. The issue has been referred to as the ‘elephant in the room’ by campaigners when businesses are discussing sustainability without mentioning their actual business model.
Overall, the brands in this report score poorly against Ethical Consumer’s environmental reporting rating. Only M&S scored the best rating in this category due to the fact that under its Plan A – sustainability strategy – it had key targets around the sourcing of raw materials, including cotton, from sources verified as respecting the integrity of ecosystems, the welfare of animals and the wellbeing of people and communities.
The majority of companies scored poorly because they lacked any detailed understanding of their main environmental impacts such as the use of toxic chemicals and sourcing of materials.
Primark, Inditex and H&M all demonstrated good understanding of their environmental impacts. Inditex had broken its reporting into sections with a water management strategy; energy usage; biodiversity strategy; and efficient stores, manufacturing and logistics.
Encouragingly, several of the brands are joining up to initiatives including the Sustainable Clothing Action Plan (SCAP) Commitment to help tackle the large environmental issues facing the industry, from resource depletion to pollution of water to dealing with waste.
One of the most pressing issues in the sector is the use of toxic chemicals. The chemicals are used in dyes, for cleaning and fireproofing, as anti-fungals, for water and stain-proofing, as solvents and as pigments. These hazardous chemicals have been found in effluent from supply chain manufacturers, in products and in the environment, despite decades of regulation and corporate responsibility programmes.
For local communities living near manufacturing facilities, water pollution has become a daily reality. Attempts to address this problem have typically involved setting and tightening the legal limits for the discharge and release of a relatively narrow range of hazardous chemicals. This ‘legalised pollution’ has not prevented the continuing release of toxic chemicals. But, for persistent, hazardous chemicals, like heavy metals, PFCs or phthalates, there is no ‘safe’ level.
How we rated the companies on toxic chemicals
A company that had none of the above got our worst rating.
Slow progress on the high street
Most of the high-street retailers received Ethical Consumer’s worst rating for their toxic chemicals policy.
Only H&M and Zara received a best rating for toxic chemicals in this report as they have been recognised as leaders by Greenpeace’s Detox campaign. Others who are signatories and scored a middle, i.e. making some progress, are Uniqlo, Primark and M&S.
Gap is also a signatory of the Detox campaign but in the recent progress report was found to be a “toxic addict”, which refers to brands who fail to take responsibility for their toxic trail and have yet to make a credible individual Detox commitment. This is despite the fact that some of their products have been identified as polluting since investigations that Greenpeace undertook in 2013.
We found that most companies in these guides sold leather items – either clothing, shoes or accessories like bags and belts. Aside from the obvious animal rights issue, there are other problems with leather including pollution from toxic chemicals used in manufacturing, forced labour, and deforestation for cattle ranching.
Chemicals in tanning
One of the most polluting processes of leather production is the tanning phase - a process that uses toxic chemicals to turn animal skin into leather and stop it from decomposing.
One of the most problematic chemicals used is chromium. During the process, this produces a chemical by-product, hexavalent chromium, which is a known human carcinogen. Many other hazardous chemicals are used in the process including arsenic, heavy metals and cyanide.
According to the India Committee of the Netherlands’ report ‘Do Leather Workers Matter?’ in March 2017, all of these toxic chemicals have a negative effect on both the environment and the health of workers who often work in unregulated, unorganised small tanneries and workshops or are homeworkers.
How we rated the companies for leather
We asked companies if they had a policy on the use of leather, including how it is sourced and treated (e.g. covering pollution from tanneries and deforestation from cattle ranching). We used their responses or information taken from their websites to rate them in two areas: Animal Rights and Pollution & Toxics.
Companies that used leather got a Pollution & Toxics mark, unless they used organic or upcycled leather, natural vegetable dyes or if all their leather came from tanneries that are rated ‘Gold medal’ by the Leather Working Group.
Companies using leather are also marked down under Animal Rights.
In December 2016, Inditex (Zara and Pull & Bear) was accused by the European Green Party of using aggressive tax avoidance schemes to reduce taxes by €585 million, or $624 million, between 2011 and 2014.
According to the report: “Inditex has used a complex web of licensing fees and intercompany loans to shift profits to zones such as Ireland and the Netherlands, where corporate taxes are lower.”
Inditex disputed the claims in a press release on its website. However, without country-by-country reporting, it was impossible to tell if profits were being shifted to lower tax jurisdictions. It received Ethical Consumer’s middle rating for likely use of tax avoidance.
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