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How fashion supply chains are being cleaned up

Written by Zachariah Glasser
on May 31, 2019

Recently, an article by the World Economic Forum focused on how business models in the fashion industry are gradually shifting as a result of changing values (influenced by social and environmental impacts); moving away from “fast fashion.” The “fast fashion” business model encourages the rapid consumption of apparel, which has resulted in the establishment of supply chains that put profits ahead of human welfare. 

This is supported by some very shocking stats, which we've highlighted below. You can read the full article here.

 

Environmental and social impacts of "fast fashion"

When it comes to waste production:

  • Every second, 1 garbage truck of clothes is burned or landfilled. This is enough to fill 1.5 Empire State buildings everyday.

When considering the environmental impacts:

  • It takes 2700 liters of water to make one cotton shirt.
  • Making a pair of jeans contributes the same amount of greenhouse gases as driving a car more than 80 miles.
  • Clothing that is not biodegradable can sit in a landfill for 200 years.

When considering the social impacts:

  • 80% of apparel is made by women between the ages of 18-24.
  • Garment workers in Bangladesh make about $96 a month, even though it is suggested that they need 3.5 times that amount to live a “decent life with basic facilities.”
  • The US Department of Labor reported evidence of forced and child labor in a host of countries, such as: Argentina, Bangladesh, Brazil, China, India, Indonesia, Philippines, Turkey, Vietnam and others.

 

Implications for global fashion brands

We can all acknowledge that certain laws likely need an overhaul in order to create an economy that protects the vulnerable - both people and the environment. However, until such time, how can multinationals ensure they are compliant with existing laws that impact their entire supply chain - as well as do their best to deliver more than the law requires?

Consider the implications for any global fashion brand.

Scott Tannen, CEO and founder of the first ‘Fair Trade’ certified company to sell luxury bedding products, wrote an article in which he provided greater perspective on the challenges of ensuring a “clean” supply chain: “Avoiding child labor and sweatshops is probably the minimum you can do. What about the middlemen who force local cotton farmers to sell their crop at an extortionate price? What about the factory that applies rancid chemicals to that and then empties those chemicals into the local water supply? If you set out to create an ethical supply chain, how do you succeed where multibillion dollar brands either fail or just don’t care?”

 

The start of an ethical supply chain

A great place to start when building an ethical supply chain is to ensure that suppliers over many different countries are up to date with local laws and international best practices applicable to environmental and social matters.

However, this is an almost impossible task as laws differ from one country to the next. Within each country, laws also vary by internal jurisdictions such as state, province or city municipality, With all of these complexities, how can companies ensure a “clean” supply chain?

 

Commitment to the rule of law

Although we can't take it for granted that laws in supplier jurisdictions will always protect the environment, workers and communities as one may hope, it's vitally important that suppliers know their legal provisions for a number of reasons: 

  • Often, local laws applicable to suppliers do protect the environment, workers and communities.
  • Commitment to lawful operation starts with a commitment to knowing applicable laws.
  • The promotion of the rule of law is an indication of sound supplier operations and of global brand commitment to them.
  • For any global brand, knowing that suppliers are committed to lawful operation is of paramount importance.

For these reasons, the first step to a sustainable future is for global brands to know the applicable regulations faced by suppliers in their supply chain, and equally for suppliers to know the applicable regulations they face within their operating context.

Knowing the applicable regulatory universe holds each supplier to account, and provides a framework from which ethical business practices can be supported by global brands.

 

Legal Technology bringing legal transparency to supply chains

The challenges around regulatory complexity highlighted above have, to date, meant that global brands have zero insight into the laws that apply to each of their suppliers and whether or not their suppliers are committed to the rule of law and are compliant. This is because legal services of this nature are offered:

  • Manually.
  • Expensively.
  • Often inaccurately.
  • Not in a way that integrates with management systems of global brands and their suppliers.

However, rapid advances in legal technology are resulting in law and regulations being transformed - into machine readable data and the use of legal metadata in sophisticated databases. Because of these innovations, knowledge of applicable legal provisions and what is required for sound and lawful operation of each supplier, is now available to global brands and their suppliers.

Global brands and their suppliers now have the ability, for the first time, to know what’s required and report against it. Furthermore, they can do this in a way that is not subject to the above shortcomings of manual legal compliance services.

The old adage of knowledge being power is true here too. Knowing the applicable legal obligations faced by each supplier empowers global brands and suppliers to work together to ensure sound and lawful operation. It’s not the whole solution, but it’s an important and very necessary step in cleaning global fashion supply chains.

 

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