Why Transparency Matters
What is Transparency?
Transparency is the critical window into how the industry conducts itself and complies to work conditions, human rights and environmental practices. Transparency does not equate to sustainability, but it is the key to accountability and driving change within the industry for the sake of the planet and people.
According to Fashion Revolution who have been campaigning for transformative transparency change since 2014 and significantly reporting on industry findings through the Fashion Revolution Transparency Index, transparency is just the first step in changing the industry to make it fairer and more sustainable. ‘Transparency creates the opportunity for collaborative action between companies, governments, NGOs, unions and the public to work towards building a fairer, cleaner and safer fashion industry’.
Supply Chain Transparency according to WikiRate is where ‘a typical supply chain begins with the ecological, biological, and political regulation of natural resources, followed by the human extraction of raw material, and includes several production links (e.g., component construction, assembly, and merging) before moving on to several layers of storage facilities of ever-decreasing size and increasingly remote geographical locations and finally reaching the consumer’.
WikiRate goes on to explain that a lack of transparency in the supply chain is known as mystification, which bars consumers from the knowledge of where their purchases originated from as well as exposing socially irresponsible practices.
The transparency problems with big brands and companies lie with the objective to seek profits at whatever cost: being people and the environment. Cutting corners has dire negative impacts and consequences for us all, but particularly for the environment and for fashion workers as we saw in 2020 when the pandemic hit where fashion workers in the millions across the globe, who lost their jobs and income sources. Many of these workers were not paid for months, if paid at all. With a significant percentage of brands not knowing whether their factory workers had been paid for work completed.
The pandemic has clearly indicated how fraught with human rights abuses, fragile and vulnerable the supply chain is. Retail stores across the globe experienced severe supply chain disruption as their own countries started to open up again. For the first time in decades, the earth was able to stop and breathe because we stopped polluting the planet via over production within the fashion and other industries across the globe.
Supply chain abuses are an unacceptable and unsustainable form of doing business on multiple levels. Big brands now have a global spotlight on them. They’re being scrutinised by governments, industry bodies, NGO’s, brands who are doing good and an ever-growing movement of fashion consumers who cannot justify the adverse cost of human rights violations and the negative impact of climate change just for the sake of fashion.
The challenge for smaller brands is access to good information, and although smaller brands can control their own internal transparent sustainable business models more effectively, they too have challenges to enable visibility up the supply chain, even with the best intentions.
A brand advocate is a sustainable fashion brand who sees themselves as an influencer of change for the better within the industry. They are actively seeking and expecting supply chain transparency and are publishing this on their websites.
The whole business approach for the brand advocate which includes transparency, knowing where and how their textiles are produced, who made their clothing isn’t enough, it’s about making sure that every aspect of the business is moving to a sustainable model, internally and externally.
They see their part within the industry as pivotal, they inspire and educate their customer base and their approach is one of community building around brand awareness and sales growth. It’s an effective model and through good digital marketing activities targeted at the right audience with the right ‘we are all responsible message’, these brands are the ones who will do well within their socially responsible plan as we transition to fashion circularity with people and planet as core focus.
The Supply Chain
Taking cotton as an example to explain how the supply chain works; once cotton has been picked and ginned, (the process of separating the cotton from seeds), it is sold to the global market. Spinners use cotton from a variety of origins to produce yarn; fabric and mills produce cloth.
At this point cotton is spun, knitted, woven, and dyed. Cotton is then distributed according to brand orders, cutting, sewing, trimming, embroidered, printed, washed. At this point it may be transferred to smaller sub-contracted facilities. The factory packages garments wholesale to brands which have placed the orders. Via warehousing and shipping, the garments are distributed to retail and online stores.
At every point of the above example transparency measures are required of the supply chain to ensure best practices which protect people and the planet. First-tier supply chain production consists of cutting, sewing, assembling, and packing. The second-tier supply chain involving the production of textiles is much more difficult to trace for smaller brands who don’t have the power dynamics that big brands do.
What are the problems?
Transparency can be easily identified by consumers simply when brands make the supply chain practices visible by reporting and publishing supplier information in their websites. Although there is a growing trend now for big brands who are willing to publicise their information, the uptake is slow and motivated by industry pressure. The largest portion of the industry is still non-compliant, these tend to be the fast fashion brands.
The following factors are prevalent within the industry and contribute to ongoing negative impact for people, the planet, animals, circularity, and economies. These are the areas which require more visibility.
- Water usage
- Chemical usage
- Waste volumes
- Carbon emissions
- Power imbalances such as E-auction practices
- Purchasing practices
- Racial and Gender equality
- Living wages
- Safe and fair working conditions
The three main areas which remain of significant concern starting at tier one manufacturing level are low visibility, exploitation of workers: unfair pay, unsafe working conditions and damage to the environment contributing to climate change.
According to Fashion’s Next Trend, ‘knowing factory details enables workers, labour organisations, human rights groups, and others to swiftly alert apparel company representatives to labour abuses in those factories, giving companies an opportunity to intervene, sooner rather than later to stop and rectify abuses. It also facilitates brand collaboration and collective action to stop, prevent, mitigate and provide a remedy for labour abuses’.
Brand Advocates who expect this transparency and traceability have the potential to really influence this process. However, larger brands who have a profit at all cost approach monopolise with power imbalance. A good example of this is the e-auction process where factory owners bid for contracts, at times winning the contracts at incredibly low and non-viable margins. What this means is the cost cutting exercise is then filtered throughout the production process which puts fashion worker fair pay, fair conditions and safety working conditions at risk. We have seen this recently where many factory workers are being forced to return to work by factories with COVID still spreading at alarming rates within their communities, without proper protection.
The e-auction process is not one that builds a collaborative trusting scenario between big brands and fashion manufacturers. It is greed driven by big brands. If these brands were transparent regarding their conduct, including the viability of their contracts at the manufacturing stage, the violations of worker rights and unsustainable supply chain expectations would be apparent. The reality is big brands exploit the industry, it’s workers, the environment, turn a blind eye and make attempts to cover up as much as possible.
Another reason why big brands won’t disclose transparency is the threat to competitive advantage.
Competitive Advantage within the Supply Chain
In 2017 the Sustainable Apparel Coalition addressed the main arguments by companies resisting transparency within their supplier factories. ‘These arguments included competitor disadvantage from disclosing supplier factories and anti-competition laws as roadblocks to transparency. Fearing that naming their suppliers would contribute to losing reliable and long-term business partners to larger companies, undercutting them in the process.
According to Fashion United, the industry is worth 3 trillion dollars. With over 3000 million fashion companies active, most big brands use buying agents to represent them across the globe. These buying agents have a lot to lose if they are cut out as the middle representative due to information being made public regarding supply chain participants.
However, just as buyers’ agents represent brands, one ‘trust and trace’ concept which Gary Adams, President of the US Cotton Trust Protocol suggests that partnering with a third party company to help tackle this issue using efforts in line with the UN Sustainability Goals which has the potential to solve transparency and traceability issues for brands and their supply chain.
For many brands who are reluctant to be transparent, the transitioning will be a painful process and the ‘trust and trace’ third party concept is a good option for brands who hide behind big walls, big corporate offices, who turn a blind eye to the human rights and environmental abuses they are directly responsible for.
Governments are increasingly stepping in to protect local workers as seen in the UK this year when the House of Commons enacted their Slavery Act to protect sweat shop fashion workers in Leicester, who were being paid under the minimum wage. Social media is certainly a significant and powerful tool to call out brands and their violations both environmental and within the fashion workforce.
What can brands do?
Brands have the power to clean up this industry by putting pressure on the supply chain and make a significant mark at the most critical and most exciting time of this industry’s history.
Here’s a list of suggestions.
Base your principles on what will last
It comes down to having a clear vision and mission of what kind of legacy fashion brands want to leave as a business. With climate change events at our doorstep, every aspect of doing business needs to consider our impact on the planet as well as preparing for significant risks associated with climate change and the current pandemic. These ongoing risks are an ongoing daily reminder now.
Many businesses across every industry are now using the UN Sustainable Development Goals as their benchmark to transform their value system to one where people, planet, animals, circularity, and economics are central to how they do business. We all win when we have these indicators in check across every aspect of our own personal principles but also our business principles as well.
Know, Show and Fix
According to Fashion Revolution a the ‘Know, Show and Fix’ approach is one where the brand takes responsibility for every aspect of good and fair supply chain activity.
Know every potential sustainable element of your business, build a model for you to work towards, research every aspect of textile selection, designing waste out, who the high-quality good and fair manufacturers are, what the negative and positive impact is of every element.
Show what you’re doing, make it visible on your website, social media, talk about the changes, where you are right now, where you want to be, how you plan to get there. Update the website every few months, keep your community updated.
The Transparency Pledge suggests publishing the following on your website;
- The full name of all authorised production units and processing facilities.
- The site addresses all facilities.
- The parent company of the business at the site.
- Types of products made.
- Workers numbers at each site.
We would go further and suggest;
- List factories industry certifications around textile production, environmental protection, and workers protection.
- A video of the factory manager talking to you and doing a walk through the factory.
- Content of all fabrics used within your range and where they came from.
- Hire a local NGO representative.
- Sign the Transparency Pledge
Put new processes into every area of the following: Manufacturers who protect their workers, decent work, fair pay, safe working conditions, know their COVID response, purchasing practices, unionisation, do workers have collective bargaining, are they shown gender and racial equality? Sustainable sourcing of materials, overconsumption, waste and circularity, water and chemical usage, climate change and biodiversity.
What can consumers do?
Ask questions, make good choices, become loyal to sustainable brands
Transparency empowers consumers to make sustainable choices. As consumers, we need to expect transparency from the fashion industry. Fashion no longer is about what it will do for us. It’s about the story behind the piece of fashion. Where has it come from? What natural or synthetic textile is it made of? If it was natural, what was the local impact, on the land, on water, on communities? If synthetic…what’s the real ongoing cost and negative impact, just because it’s synthetic.
Where was it made? Who made my fashion? Are they paid? Are they earning a living wage or are they still living in extreme poverty despite having to work full time? Are they safe as a worker? Will this piece of fashion outlast me? Is it designed in a way that enables it to circulate within the industry and economy for decades to come? Is it fast fashion? Do I want to be a pawn in the fast fashion model that contributes to 80% of annual wastage of fashion every year? Should I buy less, pay more for quality pieces that I’ll still have in years to come? How would the industry change if I paid more for less?
These are the questions we need to ask ourselves as consumers of fashion. Our buying choices have an enormous impact for better or for worse. Consumers own the power. Fashion consumers are increasingly becoming more aware and educated about their personal responsibility to an ever-growing unsustainable industry. While at the same time, becoming educated and inspired by the good brands that have our best interest and the planet’s best interest at the heart.
According to the ‘Empowering Consumers through Transparency’ report by the Sustainable Apparel Coalition the findings within this report state that quality of product, materials, naturally sourced textiles, longevity, and durability are the top considerations as a fashion consumer.
Secondary considerations are quality of production; where and how it was made, condition of workers and workers rights, whether the piece is environmentally friendly, (low pollution and use of chemicals) and fashion waste. Thirdly and least as a consideration are the broader impacts of the industry on the environment, including water, CO2 and climate change.
Low visibility of brand advocacy was found to create distrust in fashion consumers; not seen to be doing enough, particularly with poor standards in fashion making factories and the negative impact up the supply chain.
Know who is greenwashing
Greenwashing is another factor where consumers lose trust in a brand, particularly if it’s been called out by industry commentators such as Fashion Revolution. Greenwashing is an attempt to look sustainable when in fact, it is not. ‘Sustainable Fashion’ is a term which is used loosely by marketing departments and brands. It’s marketing a clean image, associating it with being socially responsible which has become ‘fashionable,’ however, the goods must stack up and lack of visibility is one sure way of being caught out. That’s why it’s critical for brands who are doing the right thing to publish their sustainable transparency so it’s not only easily found, but can be traced back to the data.
Greenwashing has the capacity to threaten the attempts of the good brands. Transparency and visibility are critical as the torch light forward in the industry when so much of it is clouded with mystification.
Do your research, ask more questions
Brand Advocates objectives are to educate and inspire consumers about the power they have as a consumer. This is a value-added relationship where it’s no longer about commodity and turnover, it’s about the joint impact that the brand advocate and the conscious consumer will have together. It’s about building a community within the industry of participants who have so much capacity to do good, where brands and consumer values are aligned.
The game has changed in the industry. Brand loyalty is now based not on just how fashion expresses who we are, but tells the human and environmental story.
For consumers, every piece of fashion comes with an opportunity to create change for the better in the supply chain.