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Fashion brands face accusations of pollution and modern slavery in supply chains

Fashion brands face accusations of pollution and modern slavery in supply chains

Glamorous photographs from Paris' Haute Couture Fashion Week will be shared around the world
next week. But, behind the scenes, some of the world's largest fashion brands are facing ugly
accusations of pollution, unethical sourcing and modern slavery in their supply chains.

Recent reports have exposed fashion's supply chain failures

Viscose fabrics win rave reviews for their silky feel, soft drape and breathability, but after some
global fashion brands were recently accused of buying viscose from highly polluting factories,
consumers may have a change of heart. Investigators for the Changing Markets Foundation visited
ten manufacturing sites in China, India and Indonesia which allegedly produce materials for firms
including Marks & Spencer, Tesco, H&M and Inditex (which owns Zara). The report found evidence
of severe environmental damage, including water pollution from untreated contaminated waste and
air pollution. It said this is "destroying marine life and exposing workers and local populations to
harmful chemicals."

This revelation of supply chain failures in the fashion industry follows the publication of the 2017
Ethical Fashion Report by Baptist World Aid Australia. It investigated the workers' rights policies of
106 clothing companies which represent 330 brands, and graded them on how effectively they
address the risk of forced labour, child labour and exploitation in their supply chains. The report said
"transparency remains a challenge in the industry", noting that only 7 percent of companies knew
where all of their cotton came from. Yet children have reportedly been used to pick and process raw
cotton which ultimately provides clothing for high-end shops in the west. The lesson for brands is
clear: if you do not know who your suppliers are, you cannot ensure the workers making your
products are free from exploitation.

But many companies have tried to improve their supply chain transparency in recent years. The
Ethical Fashion Report found that 26 percent of companies published their full supplier lists this year,
compared to 16 percent last year. 67 percent of companies are making efforts to train suppliers,
buyers and factory managers to understand human trafficking, child labour, and forced labour risks.
77 percent of companies are working to actively improve leverage and relationships with suppliers,
through supplier consolidation and/or industry collaboration.

Long supply chains and seasonal trends have raised risk level

In the modern fashion industry, brands compete to quickly produce high volumes of affordable
clothing, with clothing ranges changing every season. The pressure leads companies to cut corners
and neglect sustainability concerns to maintain a competitive advantage. It's an approach that is
likely to backfire. The adverse media coverage following reports by the Changing Markets
Foundation and Baptist World Aid Australia should remind companies of the need for greater due
diligence on their supply chains.

The fashion industry poses a higher risk of unethical sourcing than many other sectors because of
the long and complex supply chains involved in manufacturing garments. For example, the overall
stages in the supply chain of a cotton piece of clothing are cotton seed, cotton harvesting, ginning,
spinning and weaving and the cut-make-trim stage. At each stage, there is a risk of pollution from
factories, unsafe working conditions and forced labour.

Major North American and European fashion firms tend to use factories in Asia during the garment
production process, which means it can be harder to track every stage in their supply chains. Many
brands faced scrutiny when the Rana Plaza building in Bangladesh collapsed in 2013, killing more
than a thousand workers. The building housed factories which supplied to firms including Primark,
KiK and C&A. These firms faced a media and social media campaign calling on them to pay into a
compensation scheme for workers in the building.

Actions Companies Should Take

1. Request a free demo of LexisNexis Entity Insight - our newest tool for proactive supply
chain and third-party risk monitoring.
2. Understand the links in your supply chain, and consider publishing your full supplier lists.
3. Train suppliers, buyers and factory managers to understand the risks of human
trafficking, forced labour and pollution.

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