Full transparency might still be a pipe dream for politics, but the fashion industry is edging closer to that realization.
Next month several hundred leaders — from government, NGOs, designer houses, fast-fashion labels and other sectors — will converge in Paris for a two-day forum hosted by the United Nations Economic Commission for Europe. “Measuring Impact” will be the theme of the event on Due Diligence in the Garment and Footwear Sector at the OECD in Paris. After an exploratory meeting last year that attracted nearly 500, the upcoming forum aims to answer such questions as, “Where are my clothes coming from?” and “How are they done?” according to UNECE’s acting head of Sustainable Trade and Outreach Unit Maria Teresa Pisani. “The objective of the project is to have consumers, as well as manufacturers, brands and others answer the question, ‘Where is this coming from? How is this made?’”
Adopted in 2017, the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector is designed to help companies meet the due diligence expectations laid out in the group’s Guidelines for Multinational Enterprises. Developed through a multi-stakeholder process, the Guidance was approved by all governments adhering to the OECD Guidelines and endorsed by business, trade unions and civil society.
Despite plenty of reports detailing and analyzing the known risks to the environment and to workers caused by the fashion industry’s lack of sustainability, “the value chain remains very opaque not only for the final consumers but also for the brands,” she said. A recent survey of 130 international brands, manufacturers and other companies showed that more than 50 percent of them don’t know how and where clothes are produced up to the first tier — their immediate supplier, Pisani said. “But the value chain in the fashion industry is very long. We know there are more than 12 steps involved, because we have been mapping the supply chain. Very often, companies have no clue where the raw material is produced, how it is produced and processed. [But] vertical companies are far more knowledgeable about the various elements of their production and what that impacts.”
Pisani added, “Often brands have no clue where their super-expensive clothes are made [or anything about the suppliers that the agent chooses]. They sign contracts with agents, and then bring it up to the agent to find providers.”
As one of the most polluting industries, fashion generates more than 1.7 million tons of CO2 emissions and 90 million tons of waste annually. In addition, only 13 percent of clothing is recycled after its use, with merely 1 percent being recycled in a closed-loop into new clothing. Never mind dermatological diseases caused by the chemicals in clothing and footwear we wear, the escalating rates of production and consumption, will continue to intensify by 2030.
In addition to NGOs, academics, government officials and representatives from other agencies, next month’s event is expected to attract executives from H&M, Kering, Gucci, Marks & Spencer, Hugo Boss and other luxury fashion brands and fast-fashion companies. The focus will be enhancing the traceability and transparency of the value chains in the fashion industry and to improve working conditions, Pisani said. Funded by the EU, the project aims to be global in its scope by developing tools and guidelines that can be used throughout the world. Pisani said, “Manufacturing is mainly taking place in Asia. There are emerging economies like Ethiopia that are developing manufacturing capabilities for textiles and leather. I was there recently. They are increasingly looking at the compliance of sustainability standards. So the aim is to go beyond Europe and North America to engage as much as possible with Asia, Africa and Latin America. We have a lot of interest from China, Argentina, Brazil, Ethiopia and also cotton-producing countries.”
The aim of the project is to give concrete tools to companies and brands to collect and get information about sustainability risks along the entire value chain. The project’s objective is to create a system for the exchange of information and data from the raw material producer to the final consumer, Pisani said.
Pisani recalled how 100 chief executive officers from major brands supported a sustainability agenda at the Copenhagen Fashion Summit last year and identified eight priorities with advancing traceability and transparency being at the top of that list.
As for what the hold-ups are, some companies have indicated to Pisani that they lack the time and manpower to input the information, and to share that with suppliers, other production entities and clients. Having a standardized tool that allows everyone to exchange information in the same way that would be a great help and it would reduce the cost of creating one for smaller companies, she said. “The problem right now is that every big multinational company basically has its own system. That is extremely costly and cumbersome for a small company. And the fashion industry has mostly small companies. More than 60 percent are small and medium companies.”