In March 2020, Ethical Consumer sent a questionnaire to Li & Fung subsidiary Lornamead, and searched Li & Fung's website, for details of its environmental reporting.

The company’s 2018 Annual Report was viewed, which included a section on 'Our Footprint'. The company also had documents on its ‘Our Footprint’ webpage, this information related to its Greenhouse gas emissions, and environmental performance. The performance data did not appear to be independently verified.
The company did not appear to have any future quantified environmental improvement targets. Its reports also did not seem to demonstrate a clear understanding of Li & Fung’s main environmental impacts, failing to mention the toxic chemicals parabens, phthalates and triclosan.

An environmental policy was deemed necessary to report on a company's environmental performance and set targets for reducing its impacts in the future. A strong policy would include two future, quantified environmental targets, demonstration by the company that it had a reasonable understanding of its main environmental impacts, be dated within two years and have its environmental data independently verified.

Overall, the company received Ethical Consumer's worst rating for Environmental Reporting and lost a whole mark in this category.

Reference:

Li & Fung AR 2018 (11 March 2020)

In March 2020, Ethical Consumer searched the Li & Fung website for the company's policy on the use of the hazardous chemicals parabens, triclosan and phthalates.

Some forms or uses of these chemicals are banned or restricted in the EU or the USA.

Triclosan is an antibacterial and is a suspected endocrine disruptor. Parabens are also endocrine disruptors and have been linked to breast cancer and are used as preservatives. Phthalates, usually DEP or DBP, are used in fragrances and are endocrine disruptors.

A strong policy on toxics would be no use of these chemicals or clear, dated targets for ending their use.

Li & Fung stated the following in its 2018 Annual Report:
"We launched an initiative in 2017 to monitor, reduce and ultimately eliminate hazardous chemicals in the supply chain”, however no detail was provided as to the chemicals that had been eliminated.

Overall it received Ethical Consumer's worst rating on toxics and lost a whole mark under Pollution & Toxics.

Reference:

Li & Fung AR 2018 (11 March 2020)

In March 2020, Ethical Consumer searched the Fung Group's website for a cotton sourcing policy. Although the company's subsidiaries sold a range of products which included cotton, no policy could be found.
According to Anti-Slavery International (ASI) website viewed by Ethical Consumer in August 2018, Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton. Due to the high proportion of cotton likely to have come from Uzbekistan and Turkmenistan and the prevalence of forced labour in its production, the company lost half a mark in the Workers Rights category.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Due to the impacts of the widespread use of pesticides in cotton production worldwide the company lost half a mark in the Pollution & Toxics category.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.
Overall the company received Ethical Consumer's worst rating for its cotton sourcing policy.

Reference:

https://www.funggroup.com (11 March 2020)

In March 2020, Ethical Consumer viewed the Fung Group's website and found that the company's subsidiaries sold some leather items, however, it was not considered to form a substantial part of its business. No leather policy could be found. The company lost half a mark under Ethical Consumer’s Animal Rights category.
It also lost half a mark under the Pollution and Toxics category for the following reason. Leather, as the hide of a dead animal, naturally decomposes. To prevent this decomposition the leather industry uses a cocktail of harmful chemicals to preserve leather, including trivalent chromium sulphate, sodium sulphide, sodium sulfhydrate, arsenic and cyanide. Tannery effluent also contains large amounts of other pollutants, such as protein, hair, salt, lime sludge and acids. These can all pollute the land, air and water supply, making it a highly polluting industry.

Reference:

https://www.funggroup.com (11 March 2020)

In March 2020, Ethical Consumer contacted Lornamead, a subsidiary of the Fung Group, to ask for information about its palm oil policy. No response was received. The Roundtable on Sustainable Palm Oil (RSPO) website was searched but the company was not a member. The company's website was searched, but no information on palm policy was found. An ingredients list for one of its brands, Simple soap, showed that palm kernelate was used.
The company received Ethical Consumer's worst rating for its palm oil policy.

Reference:

Li & Fung AR 2018 (11 March 2020)