Call for transparency law covering supply chain worker pay

9 July 2021

Just 1% of brands have disclosed how many workers in their supply chains are being paid a living wage, according to a report

Fashion Revolution, in its Fashion Transparency Index, said only two brands – Patagonia and Italian clothing brand OVS – published the data, while almost all (96%) brands did not publish a roadmap on how they planned to achieve a living wage for all supply chain workers. 

The report also found that fewer than one in 10 brands published a policy to ensure suppliers were paid within 60 days, meaning clothes are often worn by consumers before brands have paid the garment makers. 

Sarah Dutty, global policy director at Fashion Revolution, said: “The impact of brands not disclosing information about how they're working to identify, mitigate and address forced labour risks, especially during the pandemic, is that we are left without a full picture of the hardships that workers have been facing.”

The annual report analysed 250 of the world's largest fashion brands and retailers according to their level of public disclosure on human rights and environmental policies in their operations and supply chains. 

The campaign group argued transparency was essential in ensuring accountability within supply chains, and a lack of transparency can lead to “exploitative” and “unsafe working conditions”.

The report said lack of transparency had left an “incomplete picture” of the negative socio-economic impact of the Covid-19 pandemic on workers as a result, after only 3% of fashion brands were willing to publicly disclose the number of workers in their supply chains laid-off due to Covid-19.

The group is now calling for legislation to ensure brands remain transparent about issues in their supply chains, and penalties should be enforced for companies that refuse to comply. 

Germany has recently introduced the Supply Chain Act, which aims to make companies accountable for human rights breaches within their supply chains. The European Parliament also recently backed a legislative initiative for a new EU directive on corporate due diligence and corporate accountability.

The report found government suspensions to gender pay gap reporting requirements, announced in response to Covid-19, had led to a decrease in brands releasing such data. The number of fashion brands willing to share data on their gender pay gap fell from 34% in 2020 to 30% in 2021. 

Dutty argued this pointed to the importance of legislation to ensure transparency, adding that “when brands were given an out, they took it”.

A spokesperson from the Cabinet Office’s Equality Hub responded: “Last year's decision to suspend enforcement action was taken to alleviate pressure on businesses during the Covid-19 pandemic.

“Separately the ONS continue to collect data on the gender pay gap, which fell to a record low in 2020, and we encourage all employers to take action to ensure that everyone has equal opportunities in the workplace.

“We are keeping the impact of the pandemic on businesses under review, with regards to GPG [gender pay gap] reporting this year.”

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