The 2017 Ethical Fashion Report has been released, showing the truth behind the companies you love and what they’re doing to protect their workers.
Baptist World Aid Australia has released their latest survey, marking the fourth annual report and the anniversary of the industry’s most tragic disaster; the 2013 Rana Plaza factory collapse in Bangladesh, which claimed the lives of 1,134 garment workers.
Since that time this report has tracked the efforts of fashion companies to ensure that the rights of the workers and the working conditions are maintained to a humane and fair standard.
This is the first year that the report is released in New Zealand, and now includes 12 of our own brands within the survey.
The median grade for the whole survey was C+, but the median grade for New Zealand companies was B+. Only 13 companies received A range grades, and 10 received F grades.
59 percent of companies that were assessed in the 2016 report improved their grade in the 2017 version.
Included are 106 companies that represent 330 brands. Our graph has only included the ones that are owned or sold in New Zealand. For a full list visit their website.
The grade each company received was based on four key concepts;
1) Company policies
2) How well they know their suppliers
3) Auditing and supplier relationships
4) Work empowerment
Then the company was given a total grade based on all the information that was sourced from the company.
Company Polices: Average Grade – A-
This grade was determined by evaluation of the companies’ policies. A company must have in place a higher policy which addresses the risk of worker exploitation in supplier and subcontracted factories. It also checks their involvement in multi-stakeholder initiatives and their efforts to address their responsibility to manage the pressure placed on suppliers to fill orders.
Most companies have adopted policies which set the minimum working conditions they expect of their suppliers and factories. Obviously, it is in a company’s best interest to create high, in-depth policy that covers all parts of its process.
Company policies scored the highest average at A-. The problem that arises with company policies is that although they are easy enough to put in place they can prove harder to follow when needed.
87 percent of the companies had a code that addressed the ILO Four Fundamental Principals and Rights at Work. But out of those companies, only 21 percent had it covering multiple levels of the supply chain, including raw materials.
Knowing Suppliers: Average Grade – B
This section measures the degree to which a company has traced its suppliers at three key stages of production: cut-make-trim, inputs and raw materials. It also looks at how transparent the company is, with respect to the location and nature of its suppliers.
For this part of the survey, the report focused on three key questions and gave a percentage of yes, partially and no.
Has the company traced 100% of its facilities through production, is there a public list of suppliers and does the company meet all code requirements at final stages of production.
The survey discovered that most the time the companies knew where the products were and were heading. Until it was traced back to the raw material part, where a staggering 60 percent of the companies didn’t trace its raw materials.
Auditing and Supplier Relations: Average Grade – C
This section was based around how a company manages its relationship with suppliers to ensure working conditions meet the standards set out in its policies.
It means a better understanding of working conditions in factories. To get a higher score a company must audit at least 75 percent of its traced final stage facilities with surprise visits. But out of the 87, New Zealand involved chains, less than half passed that mark. Globally, 88 percent of the companies surveyed doesn’t share broad auditing results publicly.
Companies that scored well within the section were required to have a safety incident reporting procedure (only 64 percent did) and must be aiming to actively improve leverage and relationships with suppliers to which 73 percent passed.
Worker Empowerment: Average Grade – D+
This section was the most poorly scored out of all of them, it measured how workers are empowered to have their voice heard in the supply chain through trade unions, collective bargaining agreements, and grievance mechanisms.
The most common grade for this was a D, which implies that even though company policies may be in place it is the worker’s ability to express concerns and comments that affected the grade overall.
Out of the companies surveyed, more than 50 percent don’t have elected unions in at least 50 percent of the store, per the requirement. Grievance mechanism means the ability and ease at which workers at all stages can voice concerns about their safety and remedy within the factory. Unfortunately, only 32 percent of the companies had a policy in place to ensure this.
In one of the most pressing problems, child labor laws and the systems put in place to prevent them were also monitored. Documented cases of child forced labor have been associated with every stage of the apparel supply chain. It is important that brands have a remediation plan in place so that they are in a good position to respond to the risk of these worst forms of abuse occurring in their brand.
Unfortunately, only 24 percent had child labor laws in place to prevent it from occurring. Out of the remaining, 45 percent had partial laws and the rest had none in place at all.
Each grade was average out through the percentage point system put in place by Baptist World Aid. Company names with * beside them mean the company refused to take part in the survey.
Through the graph, it is easy to see there are patterns within the marks. Average grades are followed quietly closely until reaching worker empowerment, which in most cases brings the brands score down.
Worker Empowerment remains the area where the most work still needs to be done, with the median grade for that section of the assessment being a D+.
There are some companies that the grades need the be further considered. Puma, for example, has low grades but a high average score. Baptist World Aid has been reached for comment about their grade.
Some brands on the list are owned by the same company. For example, Cotton On owns Cotton On Body, Kids, Rubi, Factorie and Supre. But even though they own these labels each one did well within each part of their sector and has many great policies in place at all parts of their business.
Cotton On is a good example of an ethical business that puts out the effort to get a good result back.
In a press release Cotton On said that the environments of their business are incredibly important to them.
“Over the last five years, our partnership with BWA has allowed us to build on the strength of our existing Ethical Sourcing Program, to sense check and continually enhance our programs with a focus on end-to-end mapping of our supply chain.”
“2016 saw us continue the public disclosure of our supplier base, become a proud member of the Better Cotton Initiative and provide support to hundreds of farmers living in Kwale through our Kenya Cotton Program.”
Cotton On has a partnership with BWA and works with them towards becoming a known ethical brand.
“We’re incredibly proud of what we’ve achieved to date but know this is a journey of continuous improvement and one that we are committed to for the long haul.”
Including the graph, there were select companies that were working towards paying their employees a living wage, these companies included:
As well as this, these brands were paying improved wages to workers in part of their supply chain:
- City Chic
- Cotton On, Cotton On Body, Cotton On Kids
- Country Road
- David Jones
- Forever New
- Jay Jays
- Just Jeans
- Karen Walker
- Peter Alexander
Both Decjuba and Farmers received an F grade, this came from the fact that both companies refused to take part in the survey.
When Decjuba was approached about their decision to refrain from getting involved they frankly said that they are not obliged to complete of participating in the survey.
“As a company, we are committed to continually working to evolve our ethical footprint. Along with our company values, we have a set of non-negotiable principles that govern our relationship with the suppliers we partner with.”
The question remains that if the company was strong and open about their ethical principals then why are they reluctant to participate.
Mark Knoff-Thomas, CEO of Newmarket Business Association, says that consumers are becoming more aware of what they’re buying and that the education through a supplier to consumer is an important part.
“The more organisations that get involved with such surveys the better. By default, participation will become more universal. Consumers will demand it.”
Knoff-Thomas also says that giving the non-responsive companies such as Farmers and Decjuba an F seems harsh but ultimately fair.
“It’s fair as long as the business can communicate the authenticity of their ethical practices satisfactorily to their consumers. At the end of the day, it’s not about being part of one survey or another, it’s simply about ethical fashion and being able to walk the talk.”
Farmers who are a growing market, buying four more labels this year alone (one being Johnny Bigg who scored a C+) has been reached for comment.
Knoff-Thomas says that the survey provides a benchmark opportunity for people and gives a business a chance to see their areas which can be approved upon.
On the other side, Glassons scored an F rating in the 2015 survey which has now improved to a C+ this year.
Hallenstein Glasson CEO Graeme Popplewell told The Register last year the improvement in its score reflects the hard work the company is doing to improve the conditions and rights of the people making its products.
The growing ethical practice and consumer demand for fair trade show a lot in the younger target audience brands, such as Glassons, Zara, H&M and Cotton On.
H&M contains a very ethical standpoint which does against the opinion that they are a ‘throw away’ company. In fact, the brand is part of the Baptist World Aid group and also the WWF Climate Savers Program and are working to become a higher ethical brand in all categories by 2018.
It is easy to be judgmental about the companies that don’t participate in the survey, and although this isn’t a government run report it will affect how people shop and we strive to become a more ethical society.
Ben Goodale, JustONE managing director, says the survey will be a positive point for those who have performed well and provides a good yardstick for those looking to improve.
“Companies who want to hang their image off environmental principles clearly have a reason to take part and do well. It’s a valuable initiative to raise the principle of ethical sourcing of fashion wear, but I would be very wary of labeling non-participants as not caring.”
“Companies might have many valid reasons to not want to be involved; such as not wanting to share potentially sensitive information in the public domain.”
Despite this advice, it will be easy for people to judge based on grade, rather than why that grade was secured in the first place. All companies are striving to be ethical and produce items that meet consumer and industry standards.
Overall, retailers have improved but Baptist World Aid emphasises there is still work to be done, as 14.2 million people remain in forced labor exploitation. There are also still 168 million child laborers within the global economy.