Ethical Fashion 2020: A new vision for transparency?

Written by Richard Jones on 1 July 2015 in Opinion
Opinion
Disasters such as the collapse of Rana Plaza in Bangladesh have led to increased transparency around supply chains - but there is still further to go

From ground-breaking laws to agreements, guides and benchmarks – supply chains are attracting much-needed scrutiny.

This should help level the playing field, with good performers able to lead the way, acting as exemplars and poor performers motivated to improve. So, the Institution of Occupational Safety and Health (IOSH) was delighted to collaborate with politicians and Fashion Revolution to host a multi-stakeholder panel debate on this subject.

The event usefully explored transparency as a driver to improved health and safety in global supply chains and, importantly, what more needs to change.

It is encouraging that a growing combination of stakeholder demand, 24/7 rolling news, social media and digital information is causing new light to be shone into supply chains. Such demand has been prompted, in part, by corporate scandals and disasters including the tragic 2013 collapse of Rana Plaza in Bangladesh, which claimed more than 1,100 workers lives and injured many more. This drew worldwide attention to the dangerous working conditions of those in the garment industry and those supplying western brands.

Since this tragic incident, described as the worst in the garment industry, there have been a number of initiatives, including joint-retailers’ agreements – the Accord on Fire and Safety in Bangladesh and the Alliance for Bangladesh Worker Safety.

And, recognising the need for increased transparency, these programmes have published inspection reports for factories that supply to signatory companies and also ‘corrective action plans’. This is important because public reporting can help increase visibility and encourage action – potentially saving lives and improving the working conditions of millions of workers across the world.  

Supply chain influence should always be used to drive up health and safety standards, not only when under the media spotlight, but continually and into the future. Organisations need to be clear about who is supplying to them, so that they can properly manage their risks.

IOSH believes one way of encouraging companies to report on this and their social impact is to include meaningful health and safety and supply chain indicators in reporting requirements and sustainability ratings. We have been raising awareness of this for some time, teaming up with our American colleagues to create the Center for Safety and Health Sustainability (CSHS), representing over 100,000 safety and health professionals worldwide.  

This led to research by CSHS in 2013, which found a lack of transparency and crucial gaps in safety and health sustainability reports from 100 of the world’s ‘most sustainable’ corporations.

Some of the firms reviewed had more than 10 work-related fatalities and one reported 49 in one year. IOSH believes that this is unacceptable and that companies that are ranked ‘sustainable’ should be able to demonstrate adequate protection of workers’ safety and health, including in supply chains. Our findings prompted improvement, securing changes to the criteria used by the sustainability ranking organisation concerned and influencing the Global Reporting Initiative, which now plans to explore improved health and safety metrics in its reporting guidelines. CSHS is currently developing new guidance for businesses on including health and safety in sustainability reports.

Social reporting requirements have grown in recent years. In the UK, there are now narrative reporting requirements for certain listed companies to produce a ‘strategic report’ that includes human rights and social issues. And from Europe, the EU Non-Financial Reporting Directive means that eligible companies (around 500 in the UK) will need to report more on human rights and social issues, as well as anti-corruption and bribery measures. While earlier this year, the UK’s world-leading Modern Slavery Act gained Royal Assent and requires anti-slavery and human trafficking disclosures. Firms of a certain size will need to report the steps they have taken to prevent modern slavery in their supply chains or that no such steps have been taken.

This transparency requirement is critical, given a worrying CIPS-commissioned research finding that estimated 11% of business leaders with supply chains thought it likely that modern slavery was already playing a part in them.

In addition, a new Corporate Human Rights Benchmark (CHRB) was announced last year at the UN Annual Forum on Business and Human Rights. This aims to incentivise better performance and a race-to-the-top, through a transparent, publicly available and credible ranking scheme. The CHRB facilitates human rights reporting and such reporting will soon be standard for the largest companies under the EU Non-Financial Reporting Directive. As well as encouraging better business behaviour, the CHRB intends to create greater leverage for policy-makers, investors, communities and consumers.

A total of 500 of the top global companies from four key sectors (apparel, agriculture, ICT and extractives) will initially be researched and ranked. From 2016 the first companies will be able to track their performance on human rights with more businesses added in future. While, more recently, the UN Guiding Principles Reporting Framework and implementation guidance were launched and are available online.

So, there is welcome movement, but still much to do. It requires continued effort and vigilance to build on the progress made so far. IOSH is keen to work with decision-makers, helping them to upskill and reap the many benefits of effective risk management across supply chains – reducing human, economic and societal failure costs and ensuring business sustainability and success. And to fulfil stakeholders’ requirements for better transparency and accountability, we aim to help organisations produce corporate performance reporting that is both meaningful and comparable.

By 2020, we believe a new vision for transparency must ensure that for global supply chain health and safety – out of sight never means out of mind.

 

IOSH is client of Dods.

 

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