The year 2020 saw businesses fighting for economic survival with the global garment and fashion industry being one of those hit hard during the coronavirus outbreak.
The world’s 50 million garment workers lost wages that totalled $5.79 billion between March and May, according to data from the International Labour Organisation. Many suppliers in the Asia Pacific region were reported to have had most of the orders placed by buyers cancelled. Thousands of retailers worldwide closed their stores for a period of time. And data from the Australian Bureau of Statistics said in Australia, retail foot traffic went down to about 71.7 per cent during the height of the pandemic and hours worked by Australians declined by 9.5 per cent.
How have the biggest names in the fashion industry stepped up to support their teams during the global crisis?
According to Carola Tembe, program manager for the H&M Foundation, the retailer directly supported women garment workers and their families in Bangladesh when the pandemic struck, giving cash assistance for food, medication and other necessities.
“Bangladesh has been identified by WHO as one of the 25 most vulnerable countries to be affected by the Covid-19 pandemic, with a high population density, poor infrastructure, weak health systems and low awareness of basic preventive measures,” Tembe said.
“We directly support women and their families with for example cash assistance for food, medication and other necessities, provide Covid-19 awareness raising and testing, hygiene materials and handwashing facilities.”
“We hope to see more donors show their support in different ways.”
As a first step, the H&M Foundation donated SEK 12 million SEK (US$1.3 million) to WaterAid, CARE and Save the Children to provide 26,700 young women and their families in and around Dhaka with emergency relief, also reaching one million people with messages on Covid-19 and hygiene practices.
While some apparel brands and retailers may have cancelled or postponed their orders during the imposed lockdowns worldwide to stem the spread of the coronavirus, risking the livelihood of millions of garment workers, there were those who went out of their way to reassure workers and suppliers that they would be paid for orders placed. H&M was one of those retailers.
The global fast fashion giant is part of the Worker Rights Consortium (WRC) list of companies who have committed to pay suppliers and workers in full for orders completed and those that were already in production.
Other fashion companies on the list included:
Marks & Spencer
VF Corporation (Vans, Timberland)
Levi Strauss and Co
Tommy Hilfiger and Calvin Klein owner PVH Corporation
Cotton On Group.
Supporting the garment industry’s recovery
Global fashion giant Inditex, which also owns Pull & Bear and Massimo Dutti, signed an agreement in August with global union IndustriALL to support the garment industry’s recovery from the crisis created by the pandemic.
“Our priority through this crisis has been and continues to be the health and safety of our people, the workers in our supply chain and our customers,” said Inditex executive chair Pablo Isla. “Our longstanding and fruitful work with IndustriALL for over 13 years makes our framework agreement a strong tool to keep working to protect and promote workers’ rights and well-being, while supporting the global garment industry during these unprecedented times.”
According to Isla, manufacturing suppliers and garment workers need stability and predictability now so that employment and income can be preserved. And that’s what the commitment with IndustriALL entails.
The WRC said Levi Strauss & Co. was previously on their list of brands that have not made sufficient commitments to pay for orders on time and in full because the company had delayed payments to all suppliers relative to agreed terms. This delay had put at risk the suppliers’ ability to pay wages to their workers.
Levi’s provided low-cost financing to a portion of its supplier base through a program involving the International Finance Corporation (IFC), but many suppliers were ineligible for the program and were unable to have access to the guaranteed low-cost financing to protect their cash flow in the face of payment delays.
According to WRC, Levi’s suppliers were already given access to low-cost financing, guaranteed by the company, to help them weather payment delays. The denim retailer provided this access via an expansion of its IFC loan program and the creation of a new loan facility designed to accommodate those suppliers that were ineligible for the IFC program.
Levi’s move resulted in the protection of the cashflow of all its suppliers, despite its extension of payment terms.
“Covid-19 has meant a huge drop in demand for apparel,” the WRC said. “We recognise the financial challenges this creates for brands and retailers; at the same time, corporations have a responsibility to manage the crisis responsibly and honor obligations to suppliers and workers.”
“To their credit, some brands and retailers have committed to pay in full for all apparel orders already in production or completed, greatly reducing harm to suppliers and workers,” the organisation stated. “Others have not made this commitment and are either canceling all orders or imposing cancellations or rebates on a supplier-by-supplier basis.”
The Covid Fashion Report
International aid organisation Baptist World Aid Australia (BWAA) also kept a close eye on companies that took immediate action to protect their workers and suppliers when the pandemic hit.
Every year, the BWAA releases its Ethical Fashion Report in Australia and New Zealand, focusing on how businesses are operating sustainably & ethically in the region.
“Our regular Ethical Fashion Survey encompasses around 50 questions across five different areas including policies, transparency and traceability, auditing and supplier relationships, worker empowerment, and environmental sustainability,” said Peter Keegan, director of Advocacy at BWAA.
But this year, the survey was adjusted to specifically highlight and research six key areas where companies made the greatest contribution to the wellbeing of their workers: Are the companies supporting workers’ wages by honouring supplier commitments? Have the organisations identified and supported their workers at greatest risk? Did they listen to the voices and experiences of their people? Have these institutions ensured workers’ rights and respected their safety? Have the companies collaborated with others to protect vulnerable workers? And have the companies planned to re-build in a better way for workers and the world?
The top scorers in 2020 were the brands that could demonstrate action across all of BWAA’s six key areas or Covid fashion commitments.
According to BWAA’s Fashion Report 2020, 70 per cent of the companies surveyed this year demonstrated they had taken positive action towards supporting vulnerable garment workers during the height of the pandemic.
Kathmandu, Country Road, Hallenstein Glasson Holdings, David Jones, the Cotton On Group, and City Chic Collective were among the top scoring ANZ brands featured in this year’s report.
Rip Curl, Zimmermann, Lorna Jeans, The Warehouse Group and Brand Collective were among the companies that only covered some areas of the Covid fashion commitments.
According to BWAA, because some companies did not provide information for all areas, they were assessed on public information only. These included Seafolly, the PAS Group, Decjuba, Sussan Group, Ben Sherman Australia, Jeanswest, Boardriders and Showpo.
BWAA’s survey revealed that no company was able to provide evidence of covering all commitments across their entire supply chain; 59 per cent were unable to provide evidence for multiple criteria areas and 14 per cent of companies have projects to improve wages in the majority of factories.
Forty-three per cent of the companies surveyed adjusted orders in negotiation with suppliers; 13 per cent made advance payments for orders or materials; and 20 per cent assisted suppliers with financing.
“We try to cover the brands that have the greatest impact on workers and are most accessible to consumers,” Keegan said. “This means we primarily cover the larger brands that are best known in the marketplace and have supply chains that touch the greatest number of workers.”
According to Keegan, the fashion companies usually included in the surveys have an annual revenue in excess of $50 million, although smaller companies are still invited to take part.
Eva Barrett, chief customer officer of outdoor retailer Kathmandu, told Inside Retail they are committed to protecting human rights and improving the wellbeing and working conditions of their workers throughout the supply chain.
“To achieve this, we’ve evolved our approach to focus on transparency and partnerships, both working together to improve our ethical fashion initiatives,” Barrett said. “We created a QR code and posted it in our overseas factories. Factory workers can scan the code using WeChat and their complaints are sent directly to us. All of this drives transparency within the supply chain and protects the rights of our workers.”
In recent years, consumers have increasingly demanded more information around where and how their products are manufactured.
This is where surveys like BWAA’s annual ethical fashion reports come in handy. Keegan said the organisation started conducting the surveys because of the knowledge gap between consumers and the reality of fashion supply chains.
“Transparency has been one of the biggest areas of change since the launch of our report seven years ago,” Keegan told Inside Retail. “In 2019, 39 per cent of companies included in our research had publicly available supplier lists. This was up from just 18 per cent in 2013.”
When Covid struck, Keegan said BWAA feared that the progress they had achieved with companies in the areas of social and environmental sustainability would stagnate or move backwards.
But companies with serious sustainability plans in place proved his fears wrong.
“Society’s greatest problems cannot be solved by governments and non-profit organisations alone,” Barrett said. “As a publicly-listed company, we have a role to play as well. By educating consumers on where their clothes come from, what they are made from and how we treat our workers in the supply chain, we hope they ask more questions from all the other brands they purchase as well.”
According to Barrett, apparel companies with traditional business models create the product, sell it to consumers, who then discard them, ending up in landfill.
“This is not a sustainable model,” she said. “We’re working with our partners right now to change this model. We want people to wear their Kathmandu gear for longer, we want them to pass it down to their friends and prolong its life cycle, but most of all, we know that recycling alone is not the answer. We believe we can build a sustainable business with strong circular principles. It’s a journey for us and we have some exciting plans in the pipeline.”
Keegan said it has always been part of their organisation’s strategy to empower consumers to advocate for the change they want to see.
“This year we’ve seen the collective power of people coming together for causes they believe in – such as climate rallies and social justice issues,” he said. “The fashion industry must pay attention because these issues are deeply embedded in the fabric of the garment industry, and action to address them is directly relevant to supply chain sustainability.”
Keegan added the growing focus on environmental sustainability and workers rights is largely the result of growing consumer awareness and pressure for greater transparency.
“If companies are to maintain the trust and engagement of consumers, it’s essential that they invest in social and environmental improvement strategies,” he said.
“It not only benefits workers and the planet but ensures the company’s business model is sustainable in the long term.”
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