How transparent is the fashion industry in 2021?

Fashion: it’s everywhere. What we wear is a daily means of expressing ourselves; representing our mood, style, culture and even history. Despite being revered for its creativity, it’s no secret that clothing production has an eye-watering environmental, social and cultural impact. The fashion industry is responsible for everything from greenhouse gas emissions and microplastic pollution, to causing deforestation and putting human lives at risk.

Because of this, more voices have clubbed together to campaign for greater transparency around how clothes are made and produced. While not equalling sustainability, transparency is an important stepping stone towards a more ethical and equitable fashion system. Pulling back the veil on the industry helps both us and brands know and understand how things work, discouraging greenwashing and paving the way for crucial business-model changes that will radically transform how brands operate and impact the world.

Non-profit organisation Fashion Revolution and its annual Transparency Index—a report which reviews and ranks 250 of the world’s largest brands with annual turnovers over USD $400 million—has been key in pushing that agenda forward and holding the world’s biggest retailers to account. You see, it’s not your neighbourhood tailor or small local designer that is causing the greatest effects; it’s the world’s most influential fashion giants and conglomerates—collectively producing hundreds of billions of tonnes of clothing across the globe—that have proven time and time again to be the least transparent. 

Transparency in fashion; where are we now?

Fashion Revolution’s Transparency Index 2021 makes it clear that 250 of the world’s largest fashion brands and retailers are still too slow, or reluctant to, disclose supply chain data. Brands achieved an overall average of just 23%.

Why does this matter? The impact of the world’s top fashion brands—their volume of production, purchasing and labour practices and how transparent their supply chain is—can determine how they need to mitigate and solve current and foreseeable issues. That’s why we’re breaking down the key facts, figures and findings of this year’s index to better understand where the industry’s really at, and where it needs to go. 

While not equalling sustainability, transparency is an important stepping stone towards a more ethical and equitable fashion system. Pulling back the veil on the industry helps both us and brands know and understand how things work, discouraging greenwashing and paving the way for crucial business-model changes that will radically transform how brands operate and impact the world.

You can check out our breakdown of the 2020 index here, and we highly recommend reading Fashion Revolution’s full report. Brand’s are assessed and scored across five key areas: Policies and commitments, governance, supply chain traceability, know, show & fix and spotlight issues. The main issues that Fashion Revolution focused on for 2021 were brands’ Covid-19 response, gender and racial equality, sustainable sourcing and materials, overconsumption and business models, waste and circularity, water and chemicals and climate change and biodiversity.

There’s substantial ground to cover, but here’s the facts that struck us most:

1. H&M dropped 5% from last year and lost first place.

Last year, H&M got a lot of pushback for greenwashing on social media for declaring themselves ‘the world’s most transparent fashion brand’; despite their continuing to pollute the earth with synthetic materials, encouraging overproduction and consumption and murky details about their treatment of workers. This resulted in a clarification from Fashion Revolution that transparency doesn’t equal sustainability and isn’t the end goal, but is still an important tool to hold brands accountable.

Here are the brands who ranked highest this year:

• OVS (78%)
• H&M (68%)
• The North Face and Timberland (66%)
• C&A and Vans (65%)
• Gildan (63%)
• Esprit and United Colors of Benetton (60%)
• Calvin Klein, Tommy Hilfiger, Van Heusen (PVH) (59%)
• Gucci, KMart Australia, Target Australia (56%)

2. Traceability decreases further down the supply chain.

Brands like UGG, Gildan, OVS and Esprit scored 90% and over in terms of traceability. This means they provided public information about their production facilities, certifications, how they trace at least one of their raw materials, an approximate number of workers, their gender breakdown and more. 

Only 47% of brands and retailers have published a list of their first-tier manufacturers: where the final processing and production of their clothes takes place. 27% published processing facilities beyond the first tier, where we can find out about where their fabrics come from. 11% published selected raw material suppliers, where they process the fibres from the harvested crops. While average traceability scores are on the rise (from 8% in 2017 to 19% in 2021) it’s necessary to have more usable data as 80% of the industry’s emissions and impact occurs beyond the first tier. Most brands are not even attempting to measure this yet, much less reduce them. 

3. 97% of brands do not publish the percentage of workers that have lost their jobs due to the pandemic.

This pandemic revealed that the most vulnerable in the supply chain—garment workers—have no guarantee of pay or wellbeing. Many have faced hunger, food insecurity, stress and fatigue, as well as going into debt for taking out loans for basic necessities like food and housing. The Workers’ Rights Consortium estimates over 37,000 workers across 31 facilities were denied the equivalent of five months’ wages (USD $39.8 million). They’ve also identified 210 facilities across 18 countries where suppliers owe 160,000 workers an estimated USD $171.5 million since the Covid-19 outbreak.

To sum up, major brands offer very little transparency on how workers in their supply chains have been impacted by the pandemic, leading many to believe they weren’t even monitoring the situation in the first place. This is where the #PayUp campaign, launched by non-profit Remake, came into play. The initiative publicly pressured large brands to reinstate and pay in full for all their cancelled orders. Sadly, the ongoing project also highlights how, during hard times, brands have turned their backs on the people responsible for making them a profit instead of protecting them. 

4. Less than 1 in 5 major brands disclose the percentage of order cancellations they made during the pandemic.

From ultra-fast fashion brands like Fashion Nova and Shein to luxury brands like Dolce & Gabbana and Valentino, they all scored less than 5% when it comes to disclosing order cancellations. Only 14% of brands disclosed the percentage of orders that were cancelled and not yet reinstated. The WRC estimates initial order cancellations were valued at USD $40 billion, where suppliers had already borne costs for raw materials and labour costs. This matters because brands withholding pay causes a knock-on effect of human suffering at the bottom of the supply chain. If factories don’t pay their garment workers, they and their families struggle to survive. 

5. Only 7% of brands disclose worker representation on their own corporate board of directors.

While 84% of major brands say that they require worker representation in supplier facilities, they don’t seem to follow up with action. Ideally, the supplier code of conduct will mention freedom of association requirements, which includes freely elected worker committees. The benefits of worker representation support supply chain workers. They’re able to directly communicate feedback or grievances to management and be taken seriously. It’s not just for the sake of diversity, but for the betterment of their work experience. If they have representatives at management level, they’re able to partake in decisions regarding their own jobs and lives. 

6. Brands must rethink their poor purchasing practices to reduce human rights risks in supply chains.

The report makes it clear that it’s not just our spending habits that need to change; the way brands purchase directly affects the quality of life for garment workers, too. According to Better Buying data, making last-minute changes to orders or payment terms can have a devastating impact on workers, including illegally low wages, unpaid benefits, forced overtime and job insecurity. It’s not uncommon for suppliers to get paid between 60 and 180 days after delivery. This means we may be buying clothes in stores made by factories that haven’t even been paid yet! 

7. Just 2 out of 250 brands have disclosed the number of their garment workers who are actually paid living wages.

A living wage—unlike minimum wage—is a human right recognised by the UN. This means being paid enough to afford food, water, housing, education, health care, transportation, clothing and some discretionary earnings during a workweek of no more than 48 hours. While brands don’t directly pay workers; their suppliers do. But through issues mentioned earlier about brands’ poor purchasing and payment habits, it traps supply chain workers in the middle. Only OVS and Patagonia have published data on the number of workers who are paid a living wage rate, however, the data highlights that very few workers actually receive living wages. 

It’s not uncommon for suppliers to get paid between 60 and 180 days after delivery. This means we may be buying clothes in stores made by factories that haven’t even been paid yet!

8. There’s still little evidence that brands oppose racism and inequality.

The report reveals there’s little evidence that brands are addressing racial and ethnic inequality in their operations and supply chains. While many have been quick to support the Black Lives Matter and Stop Asian Hate movements on social media, there’s been little proof to show that this goes beyond being a PR tool. Overall, the research shows that brands scored higher in gender equality data than racial equality data.

As an example, in 2020 Reformation founder and former CEO Yael Aflalo apologised after a former employee of the brand spoke out about alleged racism she experienced during her time at the company. The results of an investigation published later in 2020 found that the company didn’t have “a racist workplace culture”, yet they acknowledged the negative impacts employees had experienced and aimed to work towards “creating a culture of respect, accountability, and inclusion”. 

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9. Brands still won’t address the elephant in the room: overproduction and overconsumption.

With over a hundred billion pieces of clothing made annually, overproduction and overconsumption are poisonous to both us and the planet. Yet the industry still isn’t doing enough to address this problem. Many brands are quick to jump on circular solutions, like recycling synthetic clothing and talk about textile-to-textile recycling (27% in 2021 compared to 18% in 2020), yet only 14% of brands publish the annual quantity of products produced.

10. Not a single British brand or retailer has scored within the top 10 brands in the Index.

This is fishy, considering data shares that the UK consumes the most clothing in Europe. Fashion is one of the biggest industries in the UK. Consumer spending on clothing has quadrupled between 1998 and 2018 to £60 billion, on mostly fast and ultra-fast fashion items. An estimated 70-80% of clothes produced in Leicester are for Boohoo, Nasty Gal and PrettyLittleThing. Given the 2020 Boohoo wage scandal, it’s clear that transparency, nor paying minimum wages, are a priority for many brands. Data shows how major British brands are falling behind their European counterparts in terms of transparency. Speedo, with headquarters in Nottingham, is the highest-scoring British brand at 53%. 

11. Despite the urgency of the climate crisis, brands aren’t forthcoming about environmental data.

95% of brands do not disclose their annual water footprint at the raw material level. Water pollution occurs across the value chain; as untreated wastewater remains a threat to human, wildlife and ecosystem health surrounding processing factories (we recommend watching the documentary RiverBlue for more insights). What’s more, a brand’s transparency decreases the further you look down the supply chain. Furthermore, only 18% of brands published any data on absolute energy reduction in their operations.

12. Nearly half of major brands and retailers (44%) publish targets on sustainable materials. Yet fewer than one-third (30%) define what constitutes a so-called ‘sustainable’ material.

Simply put, this is greenwashing and exploits consumers’ interest in sustainability. Using these terms, consumers think they’re purchasing from brands that match their beliefs and values about environmental and social safety. More than half the world’s garments are made from synthetic fibres, with the four most common ones being polyester, nylon, polyolefins and acrylic. 

13. Carbon neutrality is not the same as net-zero carbon. These are the differences.

More big brands are establishing carbon goals, be they net-zero or carbon neutral. We can’t use these terms interchangeably due to their very disparate impacts. First of all, if major brands don’t track carbon emissions right down to raw material level, they cannot accurately measure their climate impact. Carbon neutrality has requirements for the quantifications, reduction and offsetting of greenhouse gas emissions according to the internationally recognised standards of PAS 2060. Net-zero carbon is achieved by reducing greenhouse gas emissions according to the Paris Agreement of 1.5°C. This is by balancing any remaining emissions with carbon removal (through carbon capture and storage). 

Essentially, it takes a lot of effort and ambition to get to net zero. This ties into various environmental aspects like deforestation and even regenerative agriculture. As one example, Burberry created a “Regeneration Fund” to support future carbon insetting projects in its global supply chain, in partnership with Pur Project. Carbon insetting focuses on a brand’s own supply chain and promotes biodiversity, restoring ecosystems, supports local livelihoods and stores carbon at source and removes it from the atmosphere through agroforestry. However, regenerative agriculture isn’t a new concept. Indigenous communities have been practising it all over the world for centuries. So as more brands adopt regenerative agricultural practices, their models should focus on valuing the knowledge of these traditional methods.

So, where do we—and the fashion industry—go from here?

Fashion doesn’t exist in a vacuum. Its effects across fields like aviation, agriculture and biodiversity conservation are just the tip of the iceberg. With the industry’s (active and inactive) participation to fight climate change, there’s more major brands and retailers need to do to take action.

It’s not all bad new thought; there is progress underway. Compared to a decade ago, there’s more awareness about the impact of the fashion than ever before. Industry innovations today focus on multiple issues: reducing our reliance on fossil fuels, opting for circular solutions (beyond recycling or down-cycling), improving the lives of workers, even those of our furry friends. We see this with plant-based leather alternatives, regenerative farming practices, the digitalisation of fashion events and more repair and take-back programmes. Yet, what this year’s Fashion Transparency Index spotlights is the dire consequences of not taking action fast enough.

In the end, this report is intended to ignite your activism rather than sway your shopping habits. As consumers and citizens, we can use this data to both scrutinise major brands and hold them accountable, plus call for change on a legislative level.

Here’s a few ways we can take action to demand more transparency and accountability:

For individuals

• Call out brands and ask them who made your clothes and fabric and under what conditions. It’s important to go beyond the first tier and question brands beyond the surface. 
• Call on policymakers, stakeholders and investors to influence and enforce transparency standards that brands will have to follow. This could mean an email to your local community representatives to ask for more accountability. 
• Show you care by sharing or reposting information about these issues on social media. Share it with friends, family and followers – you never know who might care!

For brands

• Brands need to be more forthcoming with information about their supply chain. From paying living wages, material sourcing, addressing gender wage discrepancies – the details matter.
• There must be more due diligence to prevent human and environmental rights violations. 
• Bring in more worker representation into management-level boards. This is to ensure workers’ voices reach those making the decisions that impact their lives the most.

For policymakers, investors and shareholders

• Governments need to get on board with better regulations, laws, sanctions. What’s missing most is the enforcement of existing laws in place to improve worker and environmental conditions. 
• Make it mandatory for board-level accountability for social and environmental performance within businesses. More so, our governing bodies should emphasise the necessity of experts measuring environmental and social impacts on these boards. It’s not enough to make celebrities sustainability ambassadors (a trend we’re seeing a lot of these days) without having scientists, researchers and activists contributing to meaningful solutions. This includes measurable, meaningful and mandatory ESG disclosure to support any company’s sustainable practices. 

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