Promises. Promises.
As brands have proclaimed their initiatives, often disclosed in their sustainability reports and/or displayed on their websites, the word of the moment, ‘rhetoric’, characterizes certain aspects of the apparel industry. With earnings paramount and the shift in consumers' mindset toward sustainability, for some, many brands have worked to capitalize on this growing sales base resulting in the sustainability competitive landscape potentially pushing brands to market themselves without ensuring the legitimacy of their claims.
For some time now, the industry has proceeded without caution, brands pledging to uphold standards, as they should. A few certainly have made strides, putting efforts into shifting their inputs to be more sustainable, working with factories to protect and build up workers’ rights, while others have seemingly used it as an opportunity to promote themselves as “sustainable” even without any efforts put forward. It has perhaps led to an ever-increasing landscape of greenwashing (recycled poly is still poly after all) as well as social washing with empty promises to protect workers rights.
The good news is that some countries have recently implemented legislation and regulations to combat greenwashing. In the United States, the Federal Trade Commission (FTC) provides guidance to businesses on making environmental claims through Green Guides which outline specific requirements for making claims about sustainability, recyclability, and environmental benefits. As for EU, the Green Claims Regulation has been proposed that would set stricter standards for environmental claims but in the Netherlands, a pioneer in addressing greenwashing practices within the fashion industry, a more proactive approach has been taken which involves investigations and sometimes legal action against companies making misleading sustainability claims through The Dutch Authority for Consumers and Markets (ACM).
As progress is imperative, brands now must be prepared to substantiate their environmental claims with credible evidence, but the ability to qualify social claims has been more challenging. Meanwhile, human rights issues continue to exist as the industry continues to pressure producers into lower costs. One example is Xinjiang in China, where regulation has led to the creation of the Uyghur Forced Labor Protection Act (UFLPA) utilizing Customs Border Patrol (CBP) to prevent the import of goods on an entity list of manufacturers flagged as potentially engaging in the use of forced labor.
Herein lies the challenge, as companies assume risk by engaging with a supplier that could be utilizing forced labor, they do so to take advantage of the low producer costs. Hypothetically if a supplier were to be flagged by the CBP and a brand then abruptly exited that supplier to reduce their risk profile, canceling orders or worse not relinquishing payment for product already produced (which unfortunately isn’t hard to imagine thanks to the pandemic), the impact could be catastrophic for the supplier depending on the volume of the order but most importantly for the workers.
In fact, human rights experts and legal scholars are calling for a responsible exit if an exit is necessary, as well as remediation.
There is, of course, the alternative side. Suppliers that engage with brands that promote their sustainability endeavors and commitments do so based on their belief that the relationship will reflect the brands commitments. So it was surprising to discover that a brand had potentially failed to honor their own commitments and pledges towards sustainability according to a recently filed amicus brief. The brief discloses that the named brand had promoted their alignment to the United Nations Guiding Principles (UNGPs) on Business and Human Rights on their website, which requires identifying potential human rights risks and taking appropriate action to avoid them, due diligence. The brief argues that the brand did not uphold its commitment to the UNGPs by canceling orders without considering the impact on workers before doing so, therefore acting in bad faith, violating their responsibility to respect human rights neglecting to consider the potential adverse impacts of canceling purchase orders.
For clarity, the original case brought on by the supplier was dismissed in court, but the brief serves as the reason for the appeal which has yet to be determined. As brands evaluate their environmental and social obligations, they must be willing to understand the associated risks. The case is challenging with the involvement of forced labor as a reason for exit, but what if it were simply due to the loss of sales, shifts in trends, or a pandemic perhaps?
As the industry continues to drive change, alignment with initiatives such as UNGPs is vital but brands must uphold their commitments especially when capitalizing on promoting them.
Purchase orders are commitments, they are promises to fulfill an obligation, and empty promises can lead to irrevocable harm.
Hopefully this shares as a wake-up call to brands that social washing might just be in the past, and there is a growing movement for social accountability especially regarding human rights.
Bio
Chana Rosenthal is the principal and founder of reDesign Consulting, an apparel focused sustainable business advisory firm. She works with clients on thoughtfully created strategies and frameworks that shift internal business operations to be more sustainable and drive impact across the supply chain. She's done extensive work with the NYU Stern Center for Business and Human Rights and the NYU Stern Center for Sustainable Business, as well as other organizations and businesses. Prior to consulting, she had a long career in apparel denim design with significant roles at several well-known brands like Ralph Lauren, Michael Kors, American Eagle/AEO.
She also serves on the associate council for Delivering Good, a non-profit that distributes excess inventory to those in need through a network of community partners. Chana has an Executive MBA from NYU Stern, specializing in Sustainable Business and Innovation, and Supply Chain Management, and is based out of Brooklyn, NY.
