A new report from the Ethical Trading Initiative, authored by academics from the business schools of Kings College London and the University of Warwick has investigated how fashion’s plethora of business models are heaping immense pressure on labour standards across the industry’s vast supply chains.
It is difficult to isolate any one factor that has driven this, but a common thread is speed. “From shifts in shopping habits through to evolving technology affecting the production and manufacturing processes, supply chains are being transformed,” said the ETI spokesperson, Martin Buttle. “But too often this is at the expense of labour standards.”
Business practices have long been a focus for the ETI, which was created 20 years ago to tackle the problem of labour conditions across global supply chains, but there has been a subtle shift. “I think we’ve been increasingly conscious that the business model is part of the issue,” Buttle told Quartz.
The issue is that there is no one business model. In fact, the models have become the distinguishing feature of certain brands such as Zara (owned by Spain’s Inditex) or Uniqlo (owned by Japan’s Fast Retailing). In the case of the former, Inditex’s supply chain wizardry has found that greater speed to European markets comes from sourcing closer to home. For Uniqlo, the benefit has come from vertical integration of supply through to the retail stores.
Most companies are not like Uniqlo, the report explains. Most companies rely on a huge web of suppliers, typically in low-wage economies, that are able to bring them the scale and speed required for a social media-driven market. That speed is also the pain point for those suppliers, whose manufacturing offer brings in extremely low margins. When orders increase at speed, sometimes doubling overnight, these manufacturers then put extreme pressure on their workers to do unpaid overtime.
The report ultimately advocates collective-action agreements, pooling resources among brands and allowing multiple companies to put pressure onto suppliers to pay their workers better and ensure better conditions. This would also help to spread the cost of higher wages.
More broadly, the industry’s ethical problems go beyond labour issues. It is becoming increasingly important to consumers that the brands they buy are thinking about their environmental output. According to Fjord’s Mark Curtis, writing in Admap, 62% of consumers are attracted to companies that believe in reducing plastics and improving the environment.
Sustainability will be increasingly integral to the public perception of the brand, just as it will be to its business proposition in future. Recent research from The Numbers Lab, for example, suggested that 20% of young people’s fashion decisions in the UK are driven by perceptions of responsible behaviour.
Recent advances in recycling technology offer a new avenue. Whereas fast fashion has presaged a disposable mindset to clothes, apparel brand Marine Layer is now recycling old t-shirts and turning them into new garments, Fast Company reports.
Until recently, recycling apparel has been extremely difficult because of the mixture of natural and artificial fibres that go into modern clothes. Marine Layer began working with a Spanish factory, Recover, that has created a new way to break down textiles and re-spin the fibres into new yarns. Amazingly, this process requires no water.
Sourced from the Ethical Trading Initiative, Quartz, Admap, Fast Company; additional content by WARC staff