Report: Half of UK fashion giants failing to support supply chain workers' rights
A ranking of 18 of the UK's most influential high street and online fashion retailers has revealed weak progress across the board on labour practices and supply chain worker conditions, with half of the brands generating a negative impact.
The ranking, compiled by artificial intelligence solutions provider alva, contains an overall ESG score for each company based on information across ten metrics. Issues covered include diversity and inclusion, community relations, labour practices, product safety and quality and environmental impacts. Data for performance on these metrics was derived from a range of sources, including the brands’ own reports, investor relations, government inquiries and NGOs.
While the brands analysed had made strong progress on employee engagement, diversity & inclusion and community relations in recent months – as is perhaps to be expected in the context of Covid-19 and movements such as Black Lives Matter and Stop Asian Hate – the majority were found to be lagging on labour practices and safety. This is in regards to both supply chain workers and in-house workers, as well as consumers.
Brands found to be faring particularly poorly included Primark and Boohoo Group.
Boohoo Group, which, aside from its namesake brand, owns brands including Nasty Gal and Karen Millen, has been at the centre of a worker rights scandal in recent months. Last year, the Group was accused of sourcing from UK factories that paid workers £3.50 an hour – less than half of the legal minimum wage for those aged 21 and over – in an independent review of Boohoo’s supply chain practices carried out by Alison Levitt QC and a study from the Centre for Social Justice and Justice & Care. Levitt has worked in the UK's legal profession since the 1980s and is an expert in business compliance and crime.
The business commissioned a review of the allegations, which concluded that most claims were “substantially true”. It has since released an ESG transformation strategy called ‘Agenda for Change’.
Other brands scoring below the league table’s average were H&M Group, Next and TK Maxx’s parent firm TJX Companies. These firms, along with Boohoo Group and Primark, were deemed by alva to have a net-negative impact on ESG issues. Brands that failed to meet the sector average but recorded a positive score were New Look, ASOS and Frasers Group, the parent company for Sports Direct.
In the report, alva warns that issues regarding labour practices and product quality and safety are becoming more visible to investors and consumers in the current context.
The findings echo those of the World Benchmarking Alliance (WBA). Pre-Covid-19, the alliance found that half of the world’s largest 229 businesses – including many big names in fashion – were unable to prove they are protecting the human rights of supply chain workers in line with the UN’s requirements. In a follow-up supplement to that analysis, conducted to account for the impact of the pandemic, only one-quarter of companies were able to prove that they were helping suppliers mitigate the financial and social impacts of changing demand during 2020.
Across all ten metrics assessed by alva, the sector was not found to be delivering a positive impact and to be seen as doing so in any category.
The metric in which companies scored the best in terms of impact, however, was materials sourcing and efficiency. alva claims that many firms are realising the benefits of leadership in that area across the board, from improving supply chain resilience and consumer relations, to supporting growing innovations and industries like recycled content. But it states that most brands could do more to communicate their efforts here to key stakeholders.
The 18 companies assessed were also found to be making some progress on reducing waste and managing hazardous materials, as well as assessing climate risk. On the former, alva documents engagement with the MIT Climate and Sustainability Consortium by Inditex, the parent firm of Zara, and growing support for the Bangladesh recycling scheme. On the latter, it outlines the John Lewis Partnership’s commitment to the Prince of Wales’ ‘Terra Carta’, designed to help organisations collaborate for accelerated action on climate adaptation and mitigation in a manner aligned with the ‘just transition' to net-zero. John Lewis Partnership is the first UK retailer to commit to the Terra Carta.
Topping the ranking table of overall scores are Marks & Spencer (M&S), Adidas and the John Lewis Partnership.