H&M is leading the way on supply chain transparency but fashion brands are largely failing to disclose purchasing practices, as demonstrated by the coronavirus pandemic.
In the Fashion Revolution Transparency Index 2020, H&M ranked top for the first time with a score of 73% in a list of 250 global fashion brands.
Of a possible 250 points total, brands were given percentage scores based on the information they publicly disclose on supply chain policies. The criteria used to judge firms' performance ranged from the disclosure of human rights and environmental policies, commitments to traceability and how responsibility is governed throughout the business.
In 2020’s Index, retailer C&A came in second with a score of 70%, followed by Adidas and Reebok, the leaders of 2019’s Index, at 69%.
The average score by brands was 23%, up two percentage points from 2019.
More than half of the brands reviewed scored 20% or less, showing there is still a long way to go towards transparency.
Among the lowest ranking brands were Bally, Max Mara, Pepe Jeans and Tom Ford, all with a score of 0%.
Last year, H&M launched a ‘transparency layer’ initiative on its website, providing details such as country of production, supplier names, factory names and addresses, and the number of factory workers for clothing and homeware.
This year’s Index also highlighted the impact of brands' purchasing practices in light of the ongoing coronavirus pandemic, as some companies have been revealed to have cancelled orders or have invoked force majeure clauses.
Sarah Ditty, policy director at Fashion Revolution and author of the report said brands currently reveal “shockingly little” about their purchasing practices.
“Responsible purchasing practices go hand in hand with the ability of suppliers to pay workers’ wages, especially to pay living wages,” she said.
The Index revealed only 6% of brands disclose a policy to pay suppliers within a maximum of 60 days and 2% published the percentage of orders with on-time payment to suppliers, according to agreed terms.
Only 15% of brands have published a responsible exit strategy detailing the progressive steps taken if they stop working with a supplier, rather than taking a cut-and-run approach.
“This pandemic shows exactly why transparency in the fashion industry is so vital. It’s why we’re calling on brands and retailers to disclose much more information about their purchasing practices … so they can be held accountable for their buying behaviour, especially in a moment like this,” Ditty continued.
“It’s our view that the responsible companies, ones that are prioritising the wellbeing and livelihoods, not just of their staff but their suppliers and their supply chain workers, over protecting shareholder profit alone will be the ones that will win when this crisis is over.”
Fashion Revolution transparency index top performers:
1. H&M (73%)
2. C&A (70%)
3. Adidas and Reebok (69%)
4. Esprit (64%)
5. Patagonia and Marks & Spencer (60%)