The latest KnowTheChain benchmark found that on average, companies did not score even 50% in their efforts to address some of the worst forms of exploitation in their supply chains – including Kering, LVMH, Amazon and Walmart.
Of serious concern were the low scores on the most worker-centric indicators.
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Topline findings
- Supply chains are rife with allegations of abuse, worsened by the treatment of workers in the pandemic, and companies largely do not demonstrate how they work to ensure abuses against workers are remedied.
- There is a substantial gap between policy and practice, suggesting company efforts to end forced labour are ineffective. This allows companies to take credit while disregarding the plight of workers.
- Luxury brands are among the poorest performers, indicating a higher price tag doesn’t translate into stronger transparency and respect for workers’ rights.
“In this third KnowTheChain apparel and footwear benchmark companies have recorded better scores, but the findings also indicate that advances in company policies, alone, are not effective,” says Felicitas Weber, project director of KnowTheChain at the Business & Human Rights Resource Centre.
“Companies continue to create an environment in which abuse can thrive, revealing disregard for the workers upon whom their profits rely. Companies are unwilling to address root causes of exploitation and retain purchasing practices that often prevent decent work and living wages to be paid.
“To achieve a just recovery from the pandemic the immense power and wealth imbalances between workers and companies must be addressed, and, crucially, companies need to adopt a worker-centric approach to prevent abuse. Disappointingly, our findings indicate the apparel sector is far from achieving this.”
Among the key findings were that luxury brands are among the poorest performers, with Italian fashion house PRADA worsening over time.
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By GlobalDataAllegations of forced labour were identified in the supply chains of 54% of companies benchmarked. Yet, only four out of 37 companies (11%) could demonstrate several remedy outcomes for workers, such as repayment of unpaid wages or recruitment fees.
Half the companies (49%) scored zero on the most worker-centric indicators, which focus on worker participation and concrete outcomes for workers, including the three largest companies in the benchmark (Amazon, Walmart, and LVMH).
The benchmark also found a gap between policy and practice. Almost all companies (97%) disclose a supplier code of conduct that prohibits forced labour and a monitoring process of suppliers. Yet they are neither effective in preventing forced labour nor in ensuring remedy outcomes for workers.
And while 28 companies (76%) disclosed migrant worker policies, only two companies (5%) disclosed several positive outcomes for migrant or other workers in vulnerable conditions.
“We uncovered a shocking lack of will to remedy human rights abuses,” Weber adds. “At a time when forced labour allegations are skyrocketing and when millions of workers in apparel supply chains are waiting for their legally owed wages to be paid, only four out of the 37 benchmarked companies (11%) could demonstrate several remedy outcomes for workers, such as repayment of recruitment fees or reimbursement of unpaid wages.
“KnowTheChain operates under the assumption that forced labour likely exists in all large global supply chains. Many companies in the sector still cannot demonstrate where they source from – let alone demonstrate an understanding of who the workers in their supply chains are. If they do not know, they cannot be sure they do not have forced labour within their supply chains, and therefore in the wardrobes of their customers.
“We expect companies to use these findings to make good on their policy pledges by stepping up and adopting purchasing practices that ensure decent work and living wages and investing in bottom-up approaches that support workers.”
Kering, Prada, and Amazon, did not return a request for comment at the time of going to press.
A spokesperson for Walmart said: “Across our markets, we hold suppliers accountable to our company standards. Our Standards for Suppliers prohibit forced labor in our suppliers’ facilities and supply chain, and we regularly remind suppliers of their obligation to comply. We have risk-based compliance programs that monitor suppliers’ compliance with our Standards and we hold them accountable for remediating issues. Any supplier that fails to comply with our standards may face consequences up to and including termination of their business relationship with Walmart.”
A spokesperson for LVMH told Just Style that its low score is due to the company not updating regularly with external parties its Code of Conduct, which dates back to 2017 and bans forced labour.
“This is precisely one of the objectives of our LIFE 360 programme, which engages all our stakeholders around its targets, including training of our Maisons and suppliers around our key principles, among which our Code of conduct.”
Click here to access the report in full.
