Fashion Revolution Transparency Index 2020
Key takeaways:
High street fashion brands lead the way on transparency but must do more.
The majority of big fashion brands still lack transparency on social and environmental issues.
Luxury brands continue to score lower than high street brands.
The current global COVID-19 pandemic magnifies historical inequalities within the supply chain and unfortunately payment terms and honouring a living wage remain key issues in the supply chain.
In order for the fashion industry to be sustainable, we must collaborate in unprecedented ways and support each other to transition.
This year’s incredible digital Fashion Revolution Week has been packed with opportunities to engage and explore the state of fashion and the people driving change. Fashion Revolution week also signals the annual launch of Fashion Revolution’s Transparency Index. Following attending the virtual press conference, we share the Transparency Index findings and thoughts on what we can do next to push fashion towards sustainability.
Now into its fifth year of tracking major brands and benchmarking their performance against five key areas: policy and commitments, governance, traceability, supplier assessment and remediation, and spotlight issues.
The Fashion Transparency Index 2020 comprises of 220 indicators covering a wide range of social and environmental topics such as animal welfare, biodiversity, chemicals, climate, due diligence, forced labour, freedom of association, gender equality, living wages, purchasing practices, supplier disclosure, waste and recycling, and working conditions.
Heavy on the horizon is the spectre of COVID-19, now widely regarded as a major threat to the global fashion industry and potentially millions of workers in the fashion supply chain. The research was performed before the wider global lockdown and it is apparent that some of the brands featured are now facing criticism for enforcing force majeure clauses and cancelling clothing orders en-masse. The COVID-19 pandemic highlights the importance of transparency within the supply chain; it is critical that workers at the bottom of the supply chain are able to create financial security for their family, the question we have to ask is how can this be done with late payments and insufficient wages?
A key point to note is that the Transparency Index measures a brand’s transparency, in other words, the level and detail of public-facing information analysed against 220 indicators set by Fashion Revolution based around existing international standards and benchmarks. It is not within the scope of the Transparency Index to measure the environmental or social performance of a brand or examine a brand’s sustainability. The brands featured represent a large percentage of the global mainstream fashion sector, those who perhaps have the capacity and finance to produce the information required. Yet, we see that counterbalanced with the luxury brands who tend to share less transparency information. Therefore we must keep in mind that transparency is not the same as an indicator of the sustainability of a brand, but can be used to place pressure on brands to be more transparent, held accountable, and to work towards achieving a higher score. Which hopefully in the long term, means their practices become more sustainable as the information is analysed globally.
Fashion Revolution Transparency Index 2020 Key Findings
The Good
This is the first year that brands will have scored 70% or higher with the high street topping the chart; H&M lead the pack as the highest-scoring brand with 73%, C&A comes in second at 70%, Adidas and Reebok at 69% and Esprit at 64%, followed by Patagonia and Marks & Spencer both scoring 60%.
The top 5 brands remain the same as the 2019 report aside from M&S who have increased by 4%, however, the scoring positions have changed with the leading brands of 2019 being Adidas and Reebok and Patagonia tied on 64%. Interestingly this means that Patagonia, the popular responsible outdoor brand has dropped 4 percentage points from 2019 to 2020 whereas Adidas and Reebok have increased by 5%.
The brands who have seen the highest increase in their scores this year are Monsoon whose score has risen by 23 percentage points, Ermenegildo Zegna by 22 percentage points, Sainsbury’s by 19 percentage points, Dressmann by 17 percentage points and Asics, Urban Outfitters and Anthropologie by 15 percentage points.
The average score across all 250 brands is 23% which is up from 21% in 2019. The 98 brands which have featured in the Transparency Index since 2017 have seen an average score increase of 12% percentage points, highlighting the likely positive influence the Index is having to encourage improved disclosure and transparency.
Luxury Brands
Luxury brands continue to score lower than high street brands, however, there has been some improvement in scores; Gucci is the highest-scoring luxury brand up from 40% in 2019 to 48% in 2020, and is also the only brand to score 100% in the section on Policy and Commitment. Other Kering Group brands are scored slightly lower than Gucci, however ex-Kering and long term sustainability stalwart Stella McCartney is absent from the transparency Index due to the brand selection methods used.
Ermenegildo Zegna is not only one of the fastest rising brands, from 4% in 2019 to 27% in 2020, but also becomes the first luxury brand to publish a detailed list of its suppliers. Bar the impressive year-on-year improvement in transparency, what is striking from this is that previously no leading luxury brand published a detailed list of suppliers, illustrating just how far the industry has yet to go.
40% of brands are now publishing a list of their first-tier manufacturers (this means the closest link in the manufacturing chain to the brand, for example, clothing makers), this number is up from 35% in 2019. While showing a positive increase, this means that less than half of all brands are releasing details of even their closest manufacturers, and as you get further down the supply chain (ie. further away from the final product), transparency markedly decreases. 24% of brands publish “some of their processing facilities” for example factories that make their cloth or yarn, and only 7% publish some of their raw material suppliers (for example cotton fibre suppliers). While these results again are improvements on last year’s figures, the low figures are telling of the lack of transparency at the raw material end of the spectrum.
The Bad
Brands which fulfil the criteria set by Fashion Revolution are included in the Transparency Index whether they wish to participate or not and brands who choose to participate generally score higher than those who decline to participate. This year 45% percent of brands approached did not respond and 2% declined the opportunity to complete a questionnaire. It is important to note that this does not mean that they automatically score poorly, merely that the brand does not have the opportunity to highlight areas of publicly available information that may not have been included in the initial analysis. Although a 7% improvement on 2019’s respondancy rate, this highlights the lack of engagement still present within the fashion industry evident at all levels.
More than half of the brands reviewed scored 20% or less; the 10 lowest scoring brands, with a score of 0%, are Swiss luxury house Bally, Italian brand Max Mara, denim brand Pepe Jeans, the eponymous brands of Tom Ford, Elie Tahari and Jessica Simpson, Dutch high street brand Mexx and Chinese retailers Belle, Heilan Home and Youngor. All ten brands are either repeat 0% offenders or new to the 2020 list, demonstrating a continuing lack of transparency amongst some of the world’s biggest fashion brands.
Each year the Index takes a deeper dive into a few key issues. For 2020 the focus is on Conditions, Consumption, Composition and Climate as spotlight issues, and the average score in this section is just 15%.
The Ugly
The current global pandemic magnifies historical inequalities within the supply chain and unfortunately payment terms and honouring a living wage remain key issues in the supply chain.
Just 11% of brands provide details of how they isolate and ring-fence labour costs when negotiating the price they pay suppliers for products and most brands do not disclose any information about their purchasing practises.
This year’s Index reveals that only 6% of brands disclose a policy to pay suppliers within a maximum of 60 days and just 2% publish the percentage of orders with on-time payment to suppliers, according to agreed terms. Only 15% of brands publish a responsible exit strategy which details the progressive steps they take when they stop working with a supplier, rather than taking a cut-and-run approach which is particularly relevant given the current COVID-19 crisis.
Just 2% of brands disclose the percentage above the minimum wage which workers are paid within their supply chain and Patagonia are the only brand to reveal data on the number of workers in their supply chain who receive a living wage.
Summary
The Transparency Index is intended to award the detail and granularity of disclosed data and not measure the sustainable performance of a brand. The question is how consumers can best utilise the information provided in this brilliant resource and who, going forward, will hold brands to account for substandard performance?
Fashion Revolution Policy Director and report author Sarah Ditty says: “While we are seeing notable progress made on transparency, there is still much more fashion brands can do to provide credible and comprehensive data that enables consumers to make better decisions, unions and NGOs to help brands do better for workers and the living planet, and any other stakeholders to drive further progress.”
In order to build a more responsible fashion industry as we come out of the other side of this global crisis, brands and retailers must disclose much more information about their purchasing practices, their pricing model and how they work with their suppliers.
Unravelling the complexities of fashion sustainability is something that is vital to the future of the fashion industry and wider planetary implications. The problem is too big for one organisation to solve alone. Now more than ever, we must truly collaborate and importantly support each other to rebuild fashion.
With this in mind, we have been working hard to on a tech-enabled project that aims to make sense of sustainability and communicate in an easy to understand way. Which we will be sharing with you in the next couple of months.
In the meantime, if you haven’t already, listen to our podcast from 2018 with Orsola de Castro (Co-founder of Fashion Revolution) and Jocelyn Whipple (Fashion Revolution Country Coordinators Liaison).
Article by Laura Gibson, Sustainable Initiatives Lead, Black Neon Digital.
24.04.2020
