The Human Thread

December 12, 2016

Author: editor

Category: Assess

New Scorecard on Forced Labor in Apparel Sector

Know the Chain scorecard

Know the Chain rankings for 20 companies

While every scorecard comes with a caveat that none are perfect, we here at The Human Thread think that this scorecard is very important. Know The Chain, a San Francisco-based company that works with businesses and investors (including the Interfaith Center for Corporate  Responsibility) on issues of labor abuse, ranked 20 large apparel and footwear companies based on their efforts to eradicate forced labor and human trafficking from their supply chains.

This study shines light on the apparel brands that are making the greatest efforts to address exploitation. On topm footwear giant Adidas scored 81 points out of 100. Among apparel companies, Gap Inc. leads the way, scoring 77 points out of 100. Swedish fast fashion behemoth H & M and Canadian athletic apparel retailer Lululemon tied for third on the list, both scoring 69 points.

The rankings employed a sophisticated methodology of seven areas of measurement. The average score was 46 out of a possible 100. Sadly, luxury brands including Hugo Boss, Kering (holding company of Gucci, among others) and Ralph Lauren scored much lower than fast fashion retailers like H&M, Inditex or Primark. Three companies scored less than 25 out of 100 points: China’s number-one shoe retailer Belle International Holdings (0), Chinese clothing manufacturer Shenzhou International Group Holdings (1), and Prada (9).

Two areas of particular concerns are under the study’s headings of “Recruitment” and “Worker Voice and Remedy.” On the latter topic, the rankings also underscore that only four companies on the survey were rated as efficiently magnifying worker’s voices to upper management, and only five companies were found to engage workers outside of the context of their workplace in a manner that gives them more voice.

In the area of “Recuitment,” a place of major risk in forced labor and trafficking, companies fall short in their recruitment practices. Only six companies require that no fees be charged during any recruitment process conducted throughout the supply chain, and only two companies encourage direct hiring of workers in their supply chains. Poor recruitment practices, including excessive fees, leave workers vulnerable and open to exploitation, particularly through debt bondage.

The report suggests that these fundamental areas that leave workers vulnerable have yet to be addresses in significant ways by the retailers.

According to the International Labour Organization (ILO), around 21 million people are victims of forced labor globally, with the apparel and footwear industry an ‘at-risk’ sector, especially as it is a rapidly growing field of employment. While in 2000 the global garment industry employed around 20 million workers, this has at least tripled to 60- 75 million workers in 2014, three-quarters of whom are women.

Again, recalling the caveat that no scorecard is perfect, Know The Chain based the study on “assessed information available on each company’s own website, as well as additional public disclosure that 80% of the companies provided in response to engagement questions.” The information used to compile each company’s rank was self-supplied by the companies that were ranked. Thus, the reliability – or lack thereof – of the information provided by the ranked companies is a critical factor in terms of gauging the ranking’s accuracy.

Know the Chain is an initiative led by Humanity United, and maintained through partnerships with the Business & Human Rights Resource Centre, Sustainalytics, and Verité,

The complete report can be found here: http://www.humanthreadcampaign.org/wp-content/uploads/2016/12/KTC_AF_ExternalReport_Final.pdf