Labor violations in the retail sector are nothing new, but it’s easy to think their days are limited. Several companies have made public declarations of improving standards in recent years — however, a new report shows that many still aren’t up to par.
According to the Apparel & Footwear Benchmark Findings Report compiled by analysts of KnowTheChain, an organization that examines human rights abuses across the supply chains of various industries, the apparel and footwear industries are at at-risk levels due to pervasive incidents of forced labor within their lines of production. The report states that, while vast progress has been made since the 1990s — when several brands came under fire for unfair practices and abuse — there is still significant work to be done, particularly among luxury brands.
The International Labour Organization defines forced labor as “situations in which persons are coerced to work through the use of intimidation, or by subtler means such as accumulated debt, retention of identity papers or threats of denunciation to immigration authorities.” The study examined several publicly traded companies, selected based on size, and ranked them on a scale of 100 points across related categories. These included commitment and governance, traceability and risk assessment, purchasing practices, recruitment, worker voice, monitoring and remedy. In short, the higher the score, the better the conditions.
Adidas, Gap Inc. and H&M took the top three spots, coming in with scores of 81, 77 and 69 respectively. Kering and Prada were fourth and third to last respectively, with Kering receiving 27 points and Prada garnering a mere 9. The two brands only beat out Chinese retailer Shenzhou International Group and China’s top shoe company, Belle International Holdings.
The lowest scoring companies, the report states, are either using forced labor or have failed to take steps to prevent it through lack of supplier education and poor auditing systems. The full chart highlights the significant discrepancy between luxury brands, fast fashion companies including H&M and contemporary brands like Ralph Lauren.
KnowTheChain forced labor rankings
The poor performance of Kering Group — which owns Gucci, Balenciaga and Alexander McQueen — comes after the launch of its environmental profits and loss app in October, designed to measure the impact of fashion designs. The effort is an extension of the Group’s existing EP&L program, which tracks the monetary value of costs to the environment during production. While the app does not track human labor, it indicates a shift in the company to prioritize social issues.
Kering said in a statement that the reason for its low score in KnowTheChain’s report is a result of concerns around the company’s information disclosure practices. The statement said Kering would continue to work on improving its status, noting that its work in the human rights sector over the past year was not incorporated in the report, as it compiled 2015 findings.
Additionally, the company said human rights issues will continue to be a focus moving forward, noting the evolution of its code of ethics and supplier rules. “Kering reaffirms that the Group is strongly committed to fight all forms of negation of workers’ rights. The report acknowledges a number of initiatives that the Group has been implementing in this field for many years, notably putting into practice our Code of Ethics and our Suppliers Charter.”
Despite the shortcomings, KnowTheChain notes that transparency in the retail and footwear sector is markedly higher than other industries it examined. This year, Gap Inc. shared its list of global factories in a push for transparency, taking a cue from fellow retailers like UK-based Marks & Spencer. Similarly, companies like Levi’s expended its worker well-being program to a wider array of countries and offered more nuanced programs focused on financial literacy and health initiatives.
The report said high-scoring companies including Adidas stood out for initiatives like training programs that teach suppliers about forced labor. They also require workers to sign contracts to avoid exploitation through unjust recruitment agencies.