While significant strides have been made, footwear and apparel firms around the world still have a long way to go when it comes to adequately addressing labor practices across their supply chains.
According to a benchmark study released today by business consulting and research firm KnowTheChain (KTC), despite the international attention generated by tragedies such as the 2013 collapse of Bangladesh’s Rana Plaza, many Western retailers still show minimal commitment to addressing labor issues within their factories and across supply chains.
KTC ranked 20 large apparel and footwear companies — including Nike, Adidas, Ralph Lauren and Prada — on their efforts to eradicate forced labor and human trafficking from their supply chains and found that only a small group of companies seriously address exploitation.
Adidas, Gap, H&M and Lululemon were the top four performing companies, achieving scores above 60/100 on the index, while luxury Italian fashion house Prada (9/100) joined several China-based firms in scoring the lowest.
The researchers highlighted the work of Germany-based sports brand Adidas, in particular, for its efforts in addressing labor issues at all levels of its supply chain. “Adidas, which ranked highest in the benchmark (81 out of 100), works in partnership with its first-tier suppliers to support training for second-tier suppliers and subcontractors, as well as develops models to address risks of forced labor in its third-tier supply chain,” the study noted, adding that many firms fail to extend their efforts beyond the first tier of their chain.
Across seven measurement areas, the average company scored 46 out of a possible 100. Adidas competitor Nike scored just above average at 49 out of 100; while Vans and Timberland holding company VF Corp scored 43/100.
Generally, KTC said luxury brands including Hugo Boss, Kering (parent of Alexander McQueen, Gucci, Stella McCartney and others) and Ralph Lauren scored significantly lower than high-street apparel retailers (such as H&M), with none achieving an above-average score.
KTC evaluated the 20 publicly traded firms based on their performance in key areas related to fair labor practices: commitment and governance; traceability and risk assessment; purchasing practices; recruitment; worker voice; monitoring; and remedy.