The Lululemon storefront on Fifth Avenue.

KnowTheChain, a supply chain resource for businesses and investors, said it ranked Adidas AG, Lululemon Athletica Inc. and Gap Inc. as the top-scoring companies in its 2018 Apparel and Footwear Benchmark Findings Report. Its data is focused on 43 of the world’s largest apparel and footwear companies and homes in on whether they’ve yet taken steps to eradicate forced labor from their supply chains.

The apparel and footwear sector, a $3 trillion industry, is “characterized by globally complex and opaque supply chains and competition for low prices and quick turnarounds,” the report said. An estimated 60 million to 75 million people are employed in the textile clothing and footwear sector around the world, and more than two-thirds are women, the same report noted.

Its scoring system, ranked out of 100, is based on seven metrics, including Commitment and Governance; Traceability and Risk Assessment; Purchasing Practices; Recruitment; Worker Voice; Monitoring, and Remedy. Its report said, “As precarious employment increases, vulnerable workers, including women and migrant workers, are hit the hardest. Workers in the sector are likely to become even more vulnerable as migration flows continue to grow rapidly.” And as the apparel and footwear sectors are “increasingly reliant on migrant workers,” the report notes, “it is crucial that companies have the right policies and processes in place to address the dynamic nature of forced labor risks in their supply chains, including the risks to migrant workers.”

gap stores

Outside a Gap Inc. store. 

Additional top-scoring companies that reached 50/100 or above on its benchmark include PVH Corp; VF Corp.; Nike Inc.; Hugo Boss; Ralph Lauren Corp. and Burberry Group. In contrast, companies such as Skechers USA Inc., Prada SpA, Shenzhou International Group Holdings Ltd. and Eclat Textile Group, scored below 15/100 on its benchmark.

And brands are responding to consumer-led demand for supply chain transparency. The report also found that a subset of 19 companies that were benchmarked in both 2016 and 2018 show “significant improvements,” as their average scores increased from 49/100 to 56/100. Of those 19 companies, Adidas, Hugo Boss, Kering, Lululemon, Nike, PVH, Ralph Lauren and VF Corp. increased their scores by more than 10 points, the report said. Regarding labor, only four companies provided evidence to show their reimbursed recruitment fees to workers in their supply chains — Adidas, Lululemon, Primark and Ralph Lauren — and seven companies supplied evidence to support supposed ethical recruitment in their supply chains, all according to the report.

KnowTheChain is a partnership of Humanity United, Business & Human Rights Resource Centre, Sustainalytics, Verité and Thomson Reuters Foundation.

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