Fashion Transparency Index 2019: Everything you need to know

This article was edited from a speech written by Fashion Revolution’s Policy Director, Sarah Ditty.

The fourth edition of the Fashion Transparency Index, released this week, reviews 200 of the world’s largest fashion brands and retailers and ranks them according to how much they disclose about their social and environmental policies, practices and impacts.

It is designed as a ratings methodology in which Fashion Revolution benchmark brands’ public disclosure across five key areas:
1. Policy and commitments
2. Governance
3. Supply chain traceability
4. Supplier assessments, remediation and grievances (Know, Show and Fix)
5. Spotlight issues (Pressing topics, which this year includes gender equality, decent work, climate action and responsible consumption and production)

The methodology focuses exclusively on public disclosure of supply chain information. This is because public disclosure allows for wider scrutiny by consumers and stakeholders and allows anyone to hold brands to account for their claims.

There are 250 possible points in total and the weighting of the scores is intended to reward granularity.

The brands reviewed are chosen based on annual turnover over $500 million. Brands are included in the Index whether they agree to participate or not. This year 46% of the 200 brands reviewed completed our questionnaire.

2019 RESULTS

Highest scoring brands

At the highest score of 64% this year, it shows that even leading brands and retailers still have significant room for improvement when it comes to sharing their social and environmental policies, practices and impacts with their customers and stakeholders.

The highest scoring brands this year are Adidas, Reebok and Patagonia, who each score 64% of the 250 possible points.

This is followed by Esprit scoring 62%, H&M scoring 61%, C&A at 60%, ASOS at 59% and Puma at 58%.

No major brands score above 70%. Although this year shows a marked improvement from 2017 when no brands scored more than 50% and in 2018 when no brands scored over 60% of the total possible points.

Fashion Transparency Index Averages

The average score amongst the 200 brands and retailers reviewed this year is 21%.

Among the 150 brands reviewed last year and again in 2019, their scores have increased by almost 4%.

Among the 98 brands reviewed in 2017, 2018 and again in 2019 — their scores have increased by almost 9% since 2017.

This progress suggests that inclusion in the Fashion Transparency Index has motivated leading brands to become more transparent.

Most improved players (in terms of transparency)

The brands that have made increased their scores by the most since last year include Dior by 22% – probably as a result of Dior being taken over by LVMH – Sainsbury’s by 21%, Nike/Converse/Jordan by 21%, New Balance by 18% and Marc Jacobs by 17%.

Notably, Chanel increased from 3% in 2018 to 10% this year, by publishing it’s first every Report to Society.

Desigual increased 7%, Sandro and s.Oliver increased 9% by publishing sustainability information for the first time.

Lowest scoring brands

Five major fashion brands score zero points, disclosing nothing at all. These are Elie Tahari, Jessica Simpson, Mexx, Tom Ford and Chinese menswear brand, Youngor.

Another 10 brands are disclosing almost nothing (less than 2%), including Longchamp, Max Mara and New Yorker.

What brands are revealing (and what they’re not)

Brands continue to publish the most information about their policies and commitments, with an average score of 48% of 49 possible points in that section of the methodology. [Note from ed: Easier said…]

But brands are disclosing significantly less information about the outcomes and impacts of their social and environmental policies and practices. [Note from ed: …Than done]

The average score amongst the 200 brands for the “Know, Show and Fix” section is just 14%, and 17% on the Spotlight Issues.

Where we are seeing the most significant progress is traceability. Many more brands and retailers are disclosing their suppliers than they were three years ago – 70 out of the 200 major fashion brands are publishing a list of their first-tier manufacturers, where clothes are cut, sewn and finished.

But only 38 brands are disclosing their processing facilities, where ginning and spinning, wet processing, embroidering, printing, dyeing and laundering typically takes place.

Just 10 brands are disclosing some of the facilities or farms supplying their fibres such as viscose, cotton and wool. However, this is a significant increase from 2018 where only one brand disclosed this information and no brands shared this information in 2017.

Lack of transparency

There is a surprising lack of transparency when it comes to Spotlight Issues.

Although 55% out of the 200 brands are publishing the annual carbon footprint in the company’s own sites, although only 19.5% disclose carbon emissions in the supply chain – and this is where Quantis reports that over 50% of the industry’s emissions occur.

Meanwhile, while 43% of brands are publishing a sustainable materials strategy or roadmap, only 29% are disclosing the percentage of their products that are made from sustainable materials.

Furthermore, for all the media scrutiny surrounding leading brands burning unsold stock over the past year, it’s surprising to see that only 26.5% of brands describe what they are doing to reduce pre-consumer surplus and waste. Just 23.5% of brands offer their customers in-store or online recycling schemes… and only 26% explain how they’re investing in circular solutions to reduce textile waste.

Human rights

Considering that millions of women work in the global fashion industry from factory to shop floor, major brands are sharing curiously little information about how they are addressing gender equality.

Just over one third of brands seem to have women’s empowerment projects in place for female workers in their supply chain.

Only 3 brands publish data on the prevalence of gender-based violations in the supplier facilities.

And… 63% of brands publish policies on equal pay but only 33.5% publish the annual gender pay gap within the company.

Given that major brands are expecting trust and transparency from suppliers, they too should share more information publicly about their own efforts towards being responsible business partners to their suppliers.

Only 6 brands disclose a method for calculating labour costs in their price negotiation process with suppliers. In other words, it’s hard to know whether the price they are paying for their products is high enough to enable the payment of a living wage to workers.

Just 13 brands disclose a policy to pay suppliers within a maximum of 60 days, a timeframe in line with the UK’s Prompt Payment Code standards.

Only 4 brands publish the percentage of supplier payments made on time and according to agreed terms — an issue supply chain experts repeatedly say can impact a factory owners’ ability to provide regular and fairly paid employment to workers.

And, just 18 brands disclose a formal process for gathering supplier feedback on the company’s purchasing practices, with less than half of those disclosing what that feedback is.

Next steps

Fashion Revolution plans to use the Index findings as a call-to-action for major brands and retailers going forward.

Although it is encouraging to see leading brands and retailers have become considerably more transparent
 since the first Fashion Transparency Index in 2016, all brands can and should be doing more towards increasing transparency.

In particular, they will be pushing brands to:
1. Disclose their manufacturers and suppliers, right down to raw material level.
2. Publish direct contact details for the company’s sustainability, corporate responsibility or other relevant department so there is an open line of communication with their customers and stakeholders
3. Share more information about their purchasing practices and the steps brands are taking to be responsible business partners to their suppliers
4. Disclose more environmental data about the amount
 of carbon emissions, water consumption, pollution and waste created throughout their value chain
5 Answer their customers’ #WhoMadeMyClothes requests with practical information and data, not just policies and principles.

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