Every week, The Interline rounds up the most vital talking points from across the landscape of fashion technology news. We provide our take on what matters, and why. This roundup is also delivered to Interline Insiders by email.
As sustainability goes straight to consumers, the future of intermediaries is uncertain.
After being slightly extended, The Interline’s sustainability focus is soon coming to an end. Fittingly, this has been a week of scrutiny-worthy developments in the area of transparency and sustainability, featuring a few stories that could indicate the way attitudes to the environmental and human cost of fashion are evolving.
First the positive. Yesterday saw Mango become the first Spanish brand to publish names of its complete, global roster of tier 1 suppliers – i.e. direct manufacturing contractors. The list includes 800 factories in almost 20 different countries, and is fully accessible and searchable by consumers.
Mango are, to be clear, certainly not the first company to do this globally. Disclosing suppliers has been a pillar of many mission-led brands, and indeed the “radical transparency” label that Everlane popularised in fashion, but which former hedge fund manager Ray Dalio coined much earlier as shorthand for “[taking] things that people would normally hide, and [putting] them on the table”, is founded on that very idea. And of course The Interline published an op-ed from the Co-Founder of the Open Apparel Registry recently that explained why open, standardised supplier data matters so much in the modern supply chain.
All of these cases have a common theme: they are removing the layer of abstraction that normally sits between the consumer and the retailer. In an ideal world, of course, that layer would not need to exist, but it has sustained itself for so long because, to put it bluntly, the retailer often had something to hide. Removing it is, therefore, a bold statement; it says the retailer can afford to be honest. At least as far as the first tier of its supply chain – but we’ll get to that limitation in a moment.
The key theme here is that the information a shopper needs to make an informed choice about what they buy and who they buy it from is now coming straight from the party selling to them, rather than through an intermediary or third party certification or inspection body.
And this level of exposure is quickly emerging as the new face of sustainability. This week saw H&M unveil a “garment-to-garment” closed loop recycling system in one of its Swedish stores. Bringing together systems that are typically kept separate, and rarely shown to consumers, Looop (the three “Os” are intentional) not only pulls the veil aside on the techniques that can be used to give a garment a second life, but also brings the microfactory concept we have written about before into the public eye – including whole-garment knitting.
All of this comes at a precarious time for apparel sourcing. Questions abound on The Interline and elsewhere about whether the retail industry’s eventual recovery from COVID will see a return to the out-of-sight, offshore sourcing paradigm that has persisted for so long, or whether a more permanent shift to more sustainable, closer-to-home supplier partnerships could replace it.
Right now, it seems as though things could go either way.
On the one hand, new data published yesterday revealed that apparel shipments from Bangladesh to the United States had officially shown growth for the first time in 2020 for the month of August. A few other countries shared similar positive year-on-year results, but notably China, India, and Vietnam did not.
On the other, previously unpublished figures tallied yesterday showed the full scope of the payment-withholding that tainted many brand-to-supplier relationships in the early days of the pandemic. Between April and June, Western brands cancelled payments to their suppliers to the tune of $16 billion, a large-scale behaviour that one of the authors of the study referred to as businesses in Europe, the UK, and the USA “essentially robbing their developing country suppliers”.
In this context, the resumption of trade is clearly great news for the Bangladeshi export economy, and for the millions who rely on it for their livelihoods. But it present a thorny issue for brands and retailers, since their pre-existing relationships with manufacturers, material suppliers and so on are now fraught with even more reputational and operational risk than they might have been before. In addition to the uncertainty surrounding subcontracting and other invisible issues, these relationships will now be further strained by economic uncertainty, increasing the odds that brands that cannot properly visualise their supply chains will end up working with a manufacturer that does not meet the standards they publicly promote.
And all eyes will be on the ethical and environmental profiles of supply chains, as demonstrated by an announcement earlier this week that the UK Environmental Audit Committee is reopening its 2018 enquiry into sustainability in fashion.
The traditional route to solving the problems that a lack of visibility into the supply chain causes would be to employ the services of an intermediary or certification body, of which there are hundreds across industries. But as more brands and retailers have opened their books and revealed their sustainability credentials directly to consumers, the role of the independent body has become less secure. Last year The Guardian ran an extensive examination of the history of the Fair Trade label, which is still active in fashion as well as food, consumer goods, and other sectors. In that article, they asked whether Fair Trade was “finished”. Evidently not, given that it is still synonymous with equitable labour practices for many customers, but if the continued trend of brands speaking openly to consumers continues, Fair Trade and bodies like it could have their relevance rapidly eroded.
At least part of the reason for this is that many independent bodies’ methods are opaque or unclear. So what the consumer thinks a certification means may be different to what it actually means, and the processes by which that certification is arrived at may not always be open to material suppliers and their customers to inspect.
This was exemplified in an open letter released yesterday by leather industry body The International Council of Tanners, which is asking the Sustainable Apparel Coalition to suspend its scoring of leather in its entirety due to what it sees as “the use of inappropriate methodologies and out of date, unrepresentative, inaccurate and incomplete data”.
The SAC, of course, is the body behind the Higg Index – originally an open standard proposed by some of the most prominent names in ethical fashion, and now a suite of tools made available to brands, retailers, and their suppliers. Of all the voluntary sustainability initiatives in fashion retail, the Higg Index is perhaps the best known, but this week is not the first time it has come under fire. A far-ranging (and fascinating) report published by Changing Markets in 2015 criticised the Higg Index – among many other certification bodies – for having “a reliance on self-assessment and a lack of transparency, which would be a real incentive for fashion brands to continuously improve.” In that report, the authors note that the SAC was promising greater transparency by 2020 – something that this week’s open letter would suggest has not been achieved.
The same report summarises the problem of third party certification as follows: “rather than being an accelerator for positive change, this ‘flood’ of certification creates confusion for consumers and the industry and is standing in the way of genuinely sustainable consumption”.
In this context, it’s little wonder that Amazon’s new sustainability pledge – as detailed in an Interline Insiders news roundup from a fortnight ago – aggregates a selection of third party accreditations and adds its own interpretation and badge, rather than branding products directly with labels from independent bodies whose processes can lack the clarity that an increasing number of brands and retailers are self-reporting.
So what does the future hold for third party sustainability certifications in a world where consumer demand for sustainability is growing, but where shoppers’ trust in voluntary labels is likely to be on a downward trend?
One avenue would be for the certifiers to differentiate themselves by solving the problem of supply chain transparency at the source. The largest obstacle facing brands and retailers that wish to make comprehensive sustainability statements is that the data they can currently disclose is limited to tier 1 manufacturing partners, or in some cases tier 2 finished material suppliers. Beneath those tiers is a lot of hidden data to collect, and a lot of hidden risk to expose, and while there are patchwork solutions for systematising the collection and communication of those risks, this is an area that independent certification bodies (and more than likely auditors and technology suppliers) could step into. Even here, though, technology has the potential to disrupt things very soon – which is something we’ll be examining when we shift our attention to blockchain in the middle of this month.
Another avenue would be for certification bodies to evolve more towards NGO status, or to work as industry-specific advocates in partnership with charitable organisations to inform how money is spent towards improving garment manufacturing as a source of gainful employment, and the lives of the people who sit at the sewing stations. But this also begs the question of why brands and retailers would continue to give to third party charities if they can prove, in an open way, that they are not causing harm. And like a lot of things in fashion retail today, that proof is going to have to be digital in nature.