FFFU0050

Written evidence submitted by Abigail Morris, Co-founder and CEO at Compare Ethics

 

About Compare Ethics

Compare Ethics is the leading technology that verifies the responsible product claims made by brands and retailers. For citizens, we empower them to know the product impact of the choices they are making. We work with over 50+ brands and thousands of consumers every month.

 

At the platforms core our algorithms use third-party data sources and machine learning to identify and assess a product's responsible status. The technology assesses products across ten categories – spanning supply chains, governance, circular economy, certifications and more. The algorithm is based on over 10 years of research and a project with support from Imperial College London.

 

The technology is aligned to national and global standards – including the U.K’s Advertising Standards Authority Code of Conduct, United Nations Sustainable Development Goals, as well as over 150+ other product standards.

 

Key Issues

The British fashion industry is failing to adopt to the measures necessary to become authentically sustainable. Without a robust set of agreed product labelling standards set out by the U.K Government on environmental management, modern slavery and responsible governance structures, the fashion sector will fall short of meeting the United Nations 2030 Sustainable Development Goals.

 

Compare Ethics seeks to provide support and evidence for industry to create a legislative framework for standardised environmental product labelling. We have seen in other verticals, such as food safety, of the benefits for the consumer to have agreed standards and labelling in place.

 

Agreed labelling must be coupled with strong data systems with third-party verification at the core. For to long fashion has been marking its own homework on responsibility and so many times it has failed stakeholders and misled the U.K public.

 

Our inaugural research illuminates the negative impact of the fashion industry in creating misleading sustainable claims and unstandardised information.

 

Our research found:

 

 

 

The power that third-party data systems and verification can play a key role in bringing transparency and legitimacy to the industry. Our evidence justifies why integrating these tools backed by legislation will be critical for long-term meaningful system change.

 

Systemic change is possible, and standards can improve, but until we create and implement third party verification systems tied to government legislation, we will continue to see brands operate with a huge cost to human beings and the planet. 

 

We need strong compliance and data systems

Robust supply chain data systems and business compliance standards are critical to build a more ethical and environmental industry.

 

Building regulations that place the true cost of labour and environmental impacts is crucial. By creating data systems that collect information across the industry, we will be able to better understand where malpractice is occurring in factories and supply chains.

 

The recent Boohoo scandal highlights that there is no effective penalisation for publicly listed companies that break the law or have a lack of good data systems in place. Evidence of this is the fact that Boohoo’s profits surge despite confirmation of allegations of endemic abuse at every single step of their supply chain. Whilst QC Alison Levitt ruled that the company had not committed criminal offences, senior board members were found to be aware of worker mistreatment and wage exploitation[1]. The evidence demonstrates a continuation of unlawful commercial practices, clear breaking of the Modern Slavery Act and is reflective of fast fashion giants’ failure to take meaningful responsibility to put an end to modern slavery.

 

We need trustworthy third-party verification as a key mechanism to deliver sustainability standards

 

Using third-party verification – the process by which products and services are assessed objectively by a non-biased standards organisation – gives retailers the chance to fully back-up their claims of being sustainable and anti-slavery.

 

The implementation of third-party verification systems alongside legislative measures is crucial to deliver sustainability standards. This is because fashion ­brands are not trusted by the public to deliver truth in their sustainability claims. The Changing Markets & Clean Clothes Campaign revealed that only 18% of consumers would trust sustainability information directly provided by clothing brands themselves[2].

 

Our own research published in the Compare Ethics ‘Building Consumer Trust in Sustainability Report’ found that 83% of consumers would be more likely to trust a product’s sustainability claim if it had been verified by a third party[3]. What’s more, even consumers less engaged on sustainability issues still want to see proof. Our research found that for the demographic that only identify with shopping from sustainable brands 10% or less of the time, a significant 80% still would want to seek third party verification.

 

 

We need clear legal guidance for labelling

The appetite for sustainable fashion and ethical products is growing, yet retailers have cottoned on to this as we have witnessed a pervasive rise in greenwashing. Consumers currently struggle to separate the legitimate sustainable options from the dishonest, ambiguous claims of ‘all natural’, ‘recycled’ and ‘conscious’ which are frequently taken out of context. The misleading environmental and social claims made by retailers reemphasises the need for clear guidance on labelling. This includes details on environmental impacts, provenance of garments and fair labour practices. New guidance on labelling would also positively influence consumer behaviour as what gets measured, gets managed.

 

Creating stringent measures that complement the Advertising Standards Authority Green Claims code, Defra’s Green Claims Guidance and UKCPI Green Claims Guidance would be welcome.

 

Ethical and environmental labelling must ensure that the full life cycle of the advertised product is included when marketed. We want to see environmental labelling as a standard across the industry in a bid to educate citizens and hold businesses to account.

 

We would also like to stamp out greenwashing and have regulations that depict what can be called ‘circular’. For example, retailers who claim to embrace a circular economy through recycled fibre collections but do not offer clothing take back schemes should be penalised as this is misleading.

 

Q1. What progress has been made in reducing the environmental and social impact of the fashion industry since the Fixing Fashion report came out?

Since the Fixing Fashion report was first published, the devastating impact that the fashion industry can have on livelihoods and the environment has hit the mainstream media.

Whilst little attention has been paid to the suggestions made in the report at a Government level, cross-industry collaboration and commitments to building better practices has come to fruition. Evidence includes the Climate Action Roadmap by the British Retail Consortium, WRAP UK Circular Clothing Action Plan and the Fashion Pact signed by leading brands.

COVID-19 has acted as an inflection point in making tangible progress in eliminating injustices in the fashion industry. For example, the recent Pay Up campaign has forced brands to pay for wrongly cancelled orders during the pandemic and provide financial support to their workers who have received unfair treatment.

 

Q3. What impact has the pandemic had on the relationship between fashion retailers and suppliers?

The pandemic has illuminated the fragile relationship held between retailers and suppliers. It has underscored the vulnerability of workers across second and third tier supply chains. The outbreak of COVID-19 has distinguished the leaders from the laggards when it comes to authentic sustainability as many brands have failed to fulfil their payments, creating a new wave of ‘cancel culture’.

 

Using Bangladesh as a case study; despite contractual obligations,by the 7th of April, approximately 950 million garments, worth $3 billion had been cancelled by global fashion brands[4].

 

The subsequent impact of this meant that72% of buyers refused to pay for raw materials already purchased by their suppliers – withthe majority also refusing to shell out for cut- make-trim costs. As a direct result of these order cancellations and no payments, over one million of Bangladeshi garment workers were fired or suspended from their workplaces,80% of whom were forced to leave without severance pay[5].

 

This has broken trust between retailers and suppliers but also between consumers and retailers. This is because shoppers had previously trusted brands to do the right thing, but without legislation, there is no one to hold them to account.

 

At Compare Ethics, we see a clear definitive value in correct purchasing practices anda strong business case that to repair trust, forward thinking brands will adjust their supplier lists, contracts and payment terms to guarantee increased transparency and traceability of their products. Third party verification, in combination with legislative measures will be key to implementing this. The pandemic has entrenched this notion.

 

Q6. What would be the most effective measures industry or Government could put in place to ensure that materials or products made with forced or prison camp labour are removed from the supply chain?

To tackle the systemic issues of slavery across fashion’s supply chain, we need verification systems backed by legislation, agreed industry standards and a rapid development of sustainability labelling.

 

The mass adoption of technology is a critical first step to make effective changes in the supply chain. This includes active promotion of third-party verification technology as well as providing funding to businesses in this space to enhance their capacity to share software and products to the industry at scale.


Effective measures also include the encouragement of blockchain technology, digital twinning and the use of standards such as Oritain which trace fibres completely along the supply chain. The level of granular detail that verification technology can provide will help to uphold human rights standards and identify future areas of opportunity to reduce carbon and water footprints.

 

Additionally, whilst industry certifications and standards are a key component to fixing the fashion industry, we need Government led social and environmental auditing that occurs regularly throughout the year.

 

To truly eradicate forced labour in the fashion industry the Government must develop strict laws that penalise businesses for wrong doing. This must include malpractice that occurs deeply within the supply chain and also through sub-contracted labour.

 

Finally, fashion players and the Government must collaborate to deliver a robust set of measures that places the correct place on environmental impacts. This will enable the country to achieve net zero, the preservation of eco systems and conservation of natural resources including water and energy. Policies must account for the true cost that fashion has on people and planet.

 

November 2020

 


[1] Fashion Revolution - https://www.fashionrevolution.org/fashion-revolution-responds-to-alison-levitt-qcs-independent-inquiry-into-boohoo-group-plc/

[2] Changing Markets Foundation & Clean Clothes Campaign -Ipsos MORI 2019 Survey

[3] Compare Ethics - Building Consumer Trust in Sustainability Report

[4] Compare Ethics - Building Consumer Trust in Sustainability Report

[5] Compare Ethics - Building Consumer Trust in Sustainability Report