December 12, 2018
Today, KnowTheChain released its final benchmark of 2018, covering the apparel and footwear sector, which remains at high risk of forced labor despite decades of stakeholder and public scrutiny. The benchmark finds that 28 of 43 companies score below 50/100 in addressing the risk of forced labor in supply chains, and 10 companies score below 10/100.
This benchmark is KnowTheChain’s second for the apparel and footwear industry. The Human Thread finds this assessment very helpful in evaluating the supply chain in apparel and footwear. We wrote about the 2016 assessment here. While some companies have improved their scores since the first benchmark in 2016, the industry overall needs to do much more in order to protect vulnerable workers at all levels of supply chains.
“Workers in the apparel and footwear sector are particularly vulnerable to exploitation, with women and migrant workers making up the majority of the labor force,” said Kilian Moote,project director for KnowTheChain. “Companies and their investors have a responsibility to ensure workers are treated fairly and humanely.”
Notably, Adidas sits atop the benchmark with a score of 92 out of 100 possible points, the highest seen yet in any of KnowTheChain’s benchmark reports, and the company remains in the top spot from 2016. Lululemon (89/100) secured second place overtaking Gap Inc. (75/100) since 2016.
The lowest scoring companies include several consumer-facing companies, such as Prada (5/100), Skechers (7/100) and Foot Locker (12/100). Other low-scoring companies are large apparel suppliers, including Eclat Textile (1/100) and Pou Chen Corporation (6/100) but they have the same responsibility to their workers, and are held to the same standard.
“Nobody should have to pay to have a job, yet responsible recruitment efforts remains the least developed area of work for the industry,” said Moote. “More than half the companies we looked at had no policy to stop employers from keeping workers’ passports, and only four could show that they had reimbursed workers for recruitment fees.”
The report provides good practice examples and recommendations for companies. In addition, it evaluates corporate commitments and compliance with relevant regulations such as the UK Modern Slavery Act and the California Transparency in Supply Chains Act and provides considerations for investor action.
The KnowTheChain Investor Statement is supported by over 100 investors with over USD 3.5 trillion assets under management, including Seventh Generation Interfaith Coalition for Responsible Investment (The Human Thread is a a project of SGI) and numerous of its members.
Read the full 2018 Apparel and Footwear Benchmark Report.
December 12, 2016
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.
The complete report can be found here: http://www.humanthreadcampaign.org/wp-content/uploads/2016/12/KTC_AF_ExternalReport_Final.pdf