Global fashion brands fail to address exploitative purchasing practices

Only 12 per cent of the surveyed 250 global fashion brands publish a responsible purchasing code of conduct, according to the latest fashion transparency index.

The fashion industry still grapples with problematic purchasing practices, as apparel brands and retailers persistently exert exploitative economic pressure on factory owners.

Unfortunately, the brunt of these practices falls on the low-paid workers, who experience reductions in wages and benefits due to the exploitations.

While this year's report shows an improvement in brands' transparency regarding human rights due diligence processes (68 per cent in 2023 compared to 34 per cent in 2020), there has been no progress in publicly committing to paying suppliers within reasonable time frames, even as short as 60 days, as per the report by Fashion Revolution's Fashion Transparency Index 2023.

"Late payments are a part of a bundle of purchasing practices which directly impact on a supplier's operations, potentially creating the very issues due diligence tries to mitigate," says the Fashion Transparency Index 2023.

A mere 11 per cent of brands disclose a policy to pay suppliers within 60 days.

The eighth edition of the Fashion Transparency Index from Fashion Revolution ranks 250 of the world's largest fashion brands and retailers based on their public disclosure of human rights and environmental policies, practices and impacts across their operations and supply chains.

The evaluation comprises 258 indicators in five key areas, including policies and commitments, governance, supply chain traceability, know, show and fix, and spotlight issues like decent work, covering forced labour, living wages, purchasing practices, unionisation, collective bargaining, sustainable sourcing and materials, overconsumption, business models, waste and circularity.

Among the brands included in the evaluation are H&M, Kmart Australia, Target Australia, C&A, Puma, Ralph Lauren, Lindex, Gap, Walmart, Tesco, Lidl, Mango, Zara, and Uniqlo, who all source from Bangladesh.

The average score of the world's 250 largest fashion brands has marginally improved by 2 percentage points, reaching just 26 per cent.

In 2023, for the first time, two brands achieved a score of 80 per cent or higher, including OVS, while Gucci, Kmart Australia, Target Australia and H&M scored in the 70 per cent range.

However, a significant number of brands, 70 out of 250 (28 per cent), still fall within the 0-10 per cent range.

More than half of major brands, 52 per cent, disclosed their first-tier supplier lists for the first time, but the index emphasises the need for greater transparency across the entire supply chain to know where the clothes are made, according to the index.

In 2017, only 32 per cent of brands provided a list of their first-tier factories, it added.

The overall average score in the traceability section is 23 per cent and almost half of the brands (45 per cent) provided little to no information, scoring just 0-1 per cent in this section.

"If brands do not know or disclose the facilities where their clothes are made, all the way along their supply chain, they cannot be held accountable for their human rights and environmental impacts," the report read.

"We cannot fix what we cannot see. And while supply chain traceability is not the end goal, it is a starting point to address all of the problems in fashion we are seeking to solve - from gender inequality, forced labour, environmental degradation to poverty pay and more."

Nearly 85 per cent of major fashion brands publish policies outlining their commitment to freedom of association, the right to organise and collective bargaining at the supply chain level.

However, only 39 per cent of brands disclose how they are implementing these policies and a mere 1.0 per cent of brands reveal the number of collective bargaining agreements providing wages higher than required by local law.

Only 15 per cent of brands disclose the number or percentage of their supplier facilities that have independent, democratically elected trade unions.

Across the industry, legislation is playing a vital role in pushing brands in the right direction. The latest index shows that 68 per cent of brands disclose their approach to human rights due diligence - an increase from 61 per cent in 2022, and 49 per cent disclose how they address environmental due diligence - up from 39 per cent in the previous year.

Some 88 per cent of brands choose not to disclose their production volumes, thus obscuring the true scale of overproduction.

Merely 1 per cent of brands reveal the number of garment workers in their supply chains who earn a living wage.

Citing an Oxfam paper, it said a top fashion CEO earns what a garment worker in Bangladesh will earn in their entire lifetime.

The minimum wage in Bangladesh has not been revised for five years, which essentially means that workers' purchasing power has decreased over the past five years because of inflation and the rising cost of living. The situation in other countries is similar: workers' wages don't rise as quickly as inflation.

Only 5 per cent of brands disclose information on how they upskill workers, in the context of a just transition, the report showed.

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