For the fourth time, nonprofit organization Remake has released its latest annual “Fashion Accountability Report 2024.” It measures the performance of 52 major fashion companies (with annual sales of more than $100) such as Fast Retailing, H&M, Inditex, Kering, LVMH and PVH in six key areas: traceability, wages and wellbeing, trade practices, raw materials, environmental justice and Governance.
This year, five new companies were added: the retail chain C&A, the US outdoor brand Cotopaxi, the US department store chain Macy’s, the US shapewear and clothing brand Skims and the Chinese online marketplace Temu.
While companies could score up to 150 points, the average score was just 14 out of those 150 points – the same as last year. Broken down by sector, average scores for traceability, wages and welfare, trade practices and governance remained the same at 1 out of 8, 2 out of 23, 1 out of 15 and 3 out of 42 respectively. The areas of natural resources and environmental justice improved by just one point this year to 3 out of 20 and 5 out of a possible 42, respectively.
Key results
Overproduction
Overproduction remains at the core of the problem: “Without a conscious reduction in annual product emissions, even the simultaneous implementation of circular economy initiatives, improving energy efficiency and using ‘preferred’ materials will not be enough to reduce the overall climate footprint of the product “The fashion industry and also the negative effects on working conditions can be sufficiently reduced,” is the sobering conclusion.
“No company can yet prove that it is replacing linear production; they simply run repair, resale and rental programs in parallel with the production of new goods. The few companies that disclose their annual production volumes all report a continuous increase compared to the previous year,” the report says.
Insufficient emissions reduction
Another problem is that the fashion industry is not meeting its emissions reduction targets: “Few companies have demonstrated that they are financing the decarbonization of their supply chains, and existing investments are not scaling up at the required pace. “The current initiatives also do not sufficiently take into account the specific needs of each individual sourcing country and each individual factory,” it concludes.
“Real partnerships between fashion companies and suppliers are essential. The latter should have a seat at the table when developing region-specific emissions reduction strategies, and brands and retailers with the appropriate resources must share the costs,” the report advises.
Address climate change
The report highlights the fact that there is a big difference between climate action, i.e. reducing emissions, and climate adaptation, i.e. supporting communities affected by climate change. “Both are critically important, but so far companies have done little to acknowledge, let alone address, the negative impacts of climate events such as extreme heat and flooding that garment workers and supplier communities in key manufacturing countries are already facing,” the report concludes together.
He advises companies to invest in climate adaptation as early as possible, otherwise they risk losing tens of billions of euros to suppliers and fashion companies. “Companies must therefore invest in the resilience of factories, workers and communities so that everyone can able to withstand and recover from extreme weather events.”
Fairer business practices
A company’s business practices include its relationships with procurement and other suppliers related to contracting, pricing, awarding and modifying contracts, managing conflicts and terminating relationships. “The imbalance of power and wealth in fashion supply chains allows companies to dictate (self-serving) contract terms and shift all risk to their manufacturing operations, which are expected to remain price competitive while keeping all costs in check connection with compliance with minimum labor rights and environmental standards,” the report summarizes and shows in the graphic above that 20 of the companies examined were not able to score points at all in this area.
“The resulting strong competitive atmosphere among suppliers and between supplier countries forces them to constantly cut costs and undermines their ability not only to pay their workers fairly, but also to implement the sustainability improvements they demand. Given the lack of progress in trading practices this year, it is clear that responsible contracts that provide for shared responsibility for preventing, accounting for and remediating negative impacts on the supply chain are necessary,” the report warns.
Living wages
Despite promises of living wages for more than a decade, garment workers continue to receive wages that do not cover even basic living costs, plunging them into debt and poverty. In a price race to the bottom, “unfair contract terms force suppliers to bear both the responsibility and the risks associated with the costs of wage increases. Price pressure exerted by fashion companies is leading to political pressure to keep minimum wages well below living wages so that manufacturing countries remain competitive,” the report explains. This also explains why ten of the 52 companies examined do not score at all in this area.
“Fashion companies have the power to enable fair pay or, conversely, to make it impossible for suppliers to pay and treat their workers fairly. Currently, companies largely avoid advocating for higher minimum wages and freedom of association in their sourcing countries, adopting fairer trading practices, and providing public accountability, for example in the form of region-specific wage data and living wage benchmarks. All of this is necessary for the industry to advance pay equity,” the report says.
Good legislation
Recalling more than three decades of failed voluntary corporate social responsibility efforts, Remake points to a global economic system that incentivizes growth based on overproduction, pollution and exploitation. “For broader, systemic change to truly occur, large and influential brands and retailers must support laws and binding agreements that hold fashion companies collectively accountable for human rights and environmental impacts along their supply chains.”
The organization advises putting workers at the center when drafting legislative proposals and ensuring that supply chain accountability mechanisms are built in from the outset.
“Remake’s 2024 Fashion Accountability Report provides a universal benchmark against which all companies can be measured. This leads to surprising findings and new guidelines. “It’s time to work with workers as we transition from producing new products to circular models for textiles and fashion of all kinds,” agrees Lynda Grose, founding member of the Union of Concerned Researchers in Fashion and professor at California College of the Arts.
Traceability
When it comes to traceability, it’s surprising to see that some of the biggest names like Inditex, Burberry, Kering, Primark, American Eagle Outfitters, Macy’s, Shein, Chanel, Disney, Forever 21 and JC Penney don’t score at all in this key area – overall 19 companies.
Although Remake evaluates each company holistically, ranking them based on their progress rather than their promises, does not separate social and environmental impacts, and is not funded by the fashion industry, as in previous editions, each evaluated company was given the opportunity to submit their evaluation form before publication check. With 24 companies Nearly half of the companies in the report chose to communicate, and many were able to improve their final score by publishing additional information.
These companies were Abercrombie & Fitch, Allbirds, American Eagle Outfitters, Bestseller, Boohoo, C&A, Cotopaxi, Everlane, Fast Retailing, Gap, H&M, Inditex, Levi Strauss, LVMH, Macy’s, Next, Primark, Puma, Reformation, River Island, Rothy’s, Shein, VF Corporation and Victoria’s Secret.
The full report can be viewed and downloaded on the Remake website.