The Fashion Transparency Index 2023: The Urgent Call for Accountability & Transparency in the Fashion Industry

bonyadi magazine 

The Fashion Revolution has released its annual Fashion Transparency Index for 2023, analysing 250 leading global fashion brands and retailers. The report offers insights into public disclosures about human rights, environmental policies, operational practices, and supply chain impacts. Here are the key findings

The Major Conclusions

• Slow Progress: Despite ongoing annual reports since 2017, transparency within the global fashion industry remains limited. The fight against climate change, social inequality, and environmental devastation seems to be progressing slowly.
• Persistent Opaqueness: Some of the richest companies do not readily disclose their operations, maintaining the status quo and indirectly endorsing issues such as wage theft, excessive waste, and environmental degradation

• Policy Evolution: Policymakers worldwide, notably in the US, EU, Japan, and other European countries, are proposing laws to regulate multinational companies and hold them accountable for their global supply chain actions

• Vision of the Future: The fashion industry must incorporate the experiences and expertise of individuals involved in clothing manufacture, waste management, and those affected by the industry’s consumption practices. The Fashion Revolution envisions a world that respects culture, provides fair pay, and upholds dignified work conditions

• Living Wages and Climate: The 2023 Index emphasized the need for brands to be transparent about their efforts to pay living wages and tackle climate change

• New Indicators: In association with European Climate Foundation, Actions Speak Louder, Stand. Earth, and Changing Markets Foundation, new metrics related to coal-phase out and emissions reduction have been introduced

• Decarbonisation Goals: Current targets for decarbonization set by brands are inadequate for addressing the climate crisis, ecosystem damage, and global water pollution

• Degrowth Movement: This year, the ‘degrowth’ concept was introduced, highlighting the need for societal and ecological well-being over corporate profits and excessive consumption. This movement advocates for radical redistribution, reduced material economy, and shifting common values towards care, solidarity, and autonomy

• Zero Point Indicators: Some new indicators, such as energy consumption disclosure by facility, worth zero points were added to avoid penalizing brands for non-disclosure

Additional Key Insights

• Uneven Scores: Italian brand OVS and luxury brand Gucci scored highest, with 83% and 80% respectively. Contrastingly, 18 major brands scored 0%, demonstrating a wide range of transparency levels

• Declining Participation: Participation from major brands dropped slightly from 62% last year to 61%. Some brands, particularly those acquired by Authentic Brands Group, showed a significant decline in transparency scores

• Luxury Sector Improvement: Brands such as Gucci, Armani, Jil Sander, Miu Miu, and Prada demonstrated significant improvements in transparency scores

• Supplier Disclosure: Over half (52%) of major fashion brands disclosed their first-tier supplier lists. However, full supply chain traceability is still a challenge

• The Wage Gap: A widening wage gap between fashion CEOs and garment workers was observed, and transparency in executive pay tied to sustainability targets remains low

• Exploitative Practices and Tax Evasion: Brands are offloading responsibilities for human rights and the environment onto their suppliers. Also, only 12% of brands publish a responsible purchasing code of conduct, and just 45% publish their responsible tax strategy

• Overproduction and Waste: An alarming 88% of brands do not disclose their annual production volumes, contributing to a massive volume of clothing waste

• Just Transition to a Circular Economy: 95% of brands disclose no information on workforce upskilling for a Just Transition, and only 12% of brands have a measurable commitment to zero deforestation

• Lack of Comprehensive Renewable Energy Commitment: While 21 brands are committed to RE100, a global initiative for 100% renewable electricity, most brands focus only on their operations, often overlooking the supply chain’s renewable energy commitments

Final Thoughts

While positive shifts towards transparency and sustainability are apparent, the industry still has a long journey ahead. Brands need to be more active in disclosing their environmental and social impacts and investing in greener and ethical supply chains

These findings emphasise the pressing need for improved transparency and accountability in the fashion industry. The lack of substantial progress implies a necessity for stronger measures to endorse responsible practices within the industry

In essence, transparency is crucial for driving systemic change within the fashion industry. The 2023 Fashion Transparency Index paints a clear picture that substantial efforts are required from brands and retailers to assume responsibility for their human and environmental impacts. It’s an urgent call for the fashion industry to step up transparency and accountability for a more sustainable future