This is the 3rd article in a bimonthly series where we will look at the most selling brands in the fashion industry in the year 2016-17. Interbrand, a global brand consultancy, reported Best Global Brands of 2017. Ten luxury and apparel companies made their mark in the top 100. Each blog post would probe into these companies for environmental and social performance by highlighting their progress. Stay tuned for this bimonthly series looking into their sustainability efforts.
Ranking on Best Global Brands of 2017: Zara is at 24 out of 100.
Fashion Transparency Index Final Score: 76-100% Only three companies have scored in this range. Levi Strauss & Co scored highest with 77. They are doing more than most other brands to communicate publicly about their supply chain practices. They seem to have many robust systems in place for tracking, tracing, monitoring and improving labour and environmental practices across the supply chain. The other two companies to score a top rating are H&M and Inditex both come in just one percentage point behind Levi's at 76%. However all the companies in this section still have a long way to go towards being fully transparent. POSITIVE STEPS TAKEN: All areas ROOM FOR IMPROVEMENT: More stakeholder engagement; better tracing of products down to sources of raw material; and even more transparent communications with the public.
Third party verification of report: Yes. SGS ICS Ibérica, S.A.
Reporting Standard: This Report has been prepared in accordance with the GRI Standards: Comprehensive Option. Organizations have the choice between “in accordance – core” and “in accordance – comprehensive”, depending on the comprehensiveness of the disclosures made.
Insights from the its sustainability report:
Inditex is present in 94 markets -45 of them online- in all five continents, with more than 7,000 stores. Zara is one of their brands. In 2016, the Dow Jones Sustainability Index (DJSI) named Inditex the most sustainable retail company in its industry, awarding it the gold medal with a total of 97 points out of 100 in a environmental category. Inditex’s supply chain comprises over 6,900 factories which employ over 1.5 million people.
- Inditex has invested €40 million in social programmes worldwide in the last year.
- Inditex has a Code of Conduct for Manufacturers and Suppliers that is binding for its entire supply chain, which establishes standards such as the prohibition of child labour, prohibition of forced labour or freedom of association, among others.
- Inditex not only verifies that all the workers in the factories with which it collaborates have the same opportunities and working conditions regardless of gender, but that the factories also conduct programmes for women’s empowerment.
- A project was launched in China in collaboration with Ethical Trading Initiative and other industry brands for the development of training and awareness materials to ensure that the wages and benefits of workers are complied.
- In 2016 a pilot project was started in Turkey with a factory of 250 workers. In this initial phase, analyses have been carried out to understand the possible causes of gender discrimination in this country. With the findings obtained, the second phase of the programme will be launched in 2017 with the aim of improving the quality of life and working conditions of working women and achieving a full awareness by the factories’ managers.
- During 2016, Sakhi Project was conducted which is structured in two parts: Sakhi Health and Sakhi Gender Equity. Both cover two fundamental aspects of the situation of women in the Asian country: health and the prevention of situations of harassment or abuse.
- As part of Inditex's women empowerment projects in southeast India, on specific actions against Sumangali, an abusive work practice that is deeply rooted in the region’s rural culture, Inditex regularly performs specific audits to verify that its suppliers in India do not use the Sumangali system in their facilities.
- In 2016, programmes were established for internal migrants in China, focused on ensuring that they understand and receive the social benefits to which they are entitled.
Programmes and standards
- Clear to Wear & Safe to Wear: These are health and safety standards for products by the Inditex Group, of obligatory application for all of garments and incorporating the most strict and up-to-date legislation in this area.
- Picking Programme; This is an inspection and analysis instrument designed by Inditex and adapted to its production and logistic model. Its objective is to ensure that all items that we sell comply with product health and safety standards.
- Ready to Manufacture (RtM): a code of good manufacturing practices for textile and leather products for facilities that undertake wet processes (dyeing, washing, tanneries and printing) and that guarantees compliance with the demanding health standards of Inditex.
- Green to Wear: This is a standard that guarantees that production processes are environmentally responsible, including criteria for evaluation and control of the supply chain.
- Inditex supports the Partnership for Cleaner Textile in Bangladesh (PaCT). This initiative works in collaboration with the World Bank in order to improve competitiveness of the textile sector through adopting the better practice in the management of water, energy and chemical substances.
- In 2016 Inditex joined is the Clean by Design (CBD) programme, together with the Natural Resources Defence Council (NRDC), to promote sustainability in textile production in China.
Training & employee engagement
- Within the framework of the UK Modern Slavery Act of 2015 and the California Transparency in Supply Chains Act of 2010, activities were carried out to sensitize and train internal teams on the prohibition of forced labour. Those are part of regular training in Human Rights that the Inditex purchasing team receives. In 2016, 64 buyers were specifically trained in the prohibition of forced labour.
- 729 buyers trained in responsible purchasing practices.
- 164 new employees trained in sustainability.
- 112 employees of subsidiaries trained in sustainability.
- India: 5,951 schoolchildren have been trained in their rights.
- India: 36 employment agencies have been trained in awareness to prevent abusive practices.
- India: 327 volunteers have been trained to prevent abusive employment practices.
- Turkey: Raising awareness in a factory with 250 workers.
- China, Turkey: 18 members of the sustainability team trained in Occupational Health and Safety.
- In 2016, the EHSA Centre of the University of Ling’nan in Guangzhou (China), specializing in environment and occupational health and safety, gave various trainings to the China sustainability team in: - Legislation on Occupational and Environmental Health and Safety - Ergonomics and occupational health and safety management systems - Electrical and machinery safety.
- In 2016, Inditex’s Turkish sustainability team took part in advanced technical training, given by mechanical engineers linked to the Fair Labour Association Turkey.
- In 2016, training of suppliers in aspects such as freedom of association and collective bargaining, traceability, improvement of workers’ conditions based on changes in factory production management systems, health and safety, children’s rights or systems of self-monitoring of the supply chain by the supplier was noteworthy.
- Inditex is the only company in its sector that provides this information to a union and facilitates union access to all suppliers, which is a sign of commitment to transparency and respect for freedom of association and collective bargaining.
- The Australian Fashion Report 2016 shows the valuation of different retailers in several aspects, including transparency. The report places Inditex in category 'A', the highest level, achieved by only seven of the 87 companies evaluated worldwide.
- In 2016 important advances were made in raw material traceability, with new initiatives specifically aimed at the traceability of cotton. In this regard, a pilot programme has been launched involving 50 strategic suppliers in five countries with the aim of gaining visibility and more knowledge about the production processes involved, from cotton growing to fabric manufacture.
- Different programmes and initiatives were developed with suppliers of raw materials (including cotton) to trace production and to cooperate with renowned international organizations such as Better Cotton Initiative, Textile Exchange or Organic Cotton Accelerator (OCA), a multisectoral initiative created to promote the prosperity of the organic cotton sector.
Waste and resource conservation
- Zara became the first Inditex brand to eliminate physical receipts in its stores and for orders placed on Zara.com in Spain in 2016. It is also introducing this initiative in the United States and the United Kingdom. This new paperless system will be gradually expanded to all other brands and markets in 2017.
- Inditex maintains a long term strategy to integrate the vision of a circular economy into their business model. For this reason, projects were developed for the end of the product’s life cycle, such as Closing the Loop, which reaches employees and customers through the installation of containers for collecting garments. 100% implemented in Zara stores in Spain, Portugal, the United Kingdom, Ireland, Holland and Denmark.
- Inditex has partnered with MIT-MISTI (International Science and Technology Initiatives) in order to conduct research to improve recycling of textile fibres from used garments. The aim is to reduce the impact on natural resources and promote circular economy.
- Green to Pack programme aims to reduce the consumption of raw materials in packaging and to improve shipment density, increasing the amount of products transported in each shipment. Additionally, the use of more sustainable materials in packaging was encouraged, improving reuse and subsequent separation and recycling.
- In order to lengthen the useful life of garments, a project was developed for the reuse or recycling of garments in partnership with the third sector, recycling companies and textile manufacturers.
- Inditex incorporates recycled polyester, wool and cotton in its garments, fibres where manufacturing consumes less water, energy and natural resources than the production of new fibres. Moreover, the Group has initiated new lines of research to improve the recycling of textile fibres together with the Massachusetts Institute of Technology (MIT). And through the collaboration with Austrian company Lenzing, in 2016, Refibra™Lyocell was developed, from cotton waste generated by Inditex and wood originated from forests that are managed sustainably.
- All paper products (bags, labels, office paper, etc.) and furnishings used in activities are certified under the PEFC or FSC standards, guaranteeing that the entire process of forestry management is carried out in a sustainable and accountable way.
- To enable customers to quickly identify the products that stand out as environmentally friendly, some Inditex brands have launched specific collections of more sustainable products. Zara identifies these products with the Join Life label, whereas in Oysho, the use of raw materials such as organic cotton, TENCEL®Lyocell or recycled materials is recognised from the Wear the Change label.
- In 2016, the brand made progress with the commercialisation of these products, launching specific collections of these garments in all sections. In total, Zara put 42.3 million Join Life items on sale this year, representing over 5% of the entire brand collection over the year.
- The sustainability and energy efficiency measures implemented in stores contribute savings of 20% in the case of electricity, and 40% in water consumption compared to conventional stores.
- Clean energy sources supply 30% of worldwide energy consumption - 520 million KWh of electricity used at facilities comes from renewable sources - 89% of the electricity consumed in Spain is renewable. The use of clean electricity in facilities has grown by a factor of 10 since 2013.
- In 2016, 520 million kWh of renewable energy was procured for offices, logistic centres and stores. This combined with the renewable generation, tri-generation and co-generation at facilities means that 30% of the energy consumed is clean, avoiding emissions derived from the production of energy using fossil fuels.
- Increased the use of electricity from renewable sources in facilities tenfold since 2013. In Spain, where the Inditex Group is headquartered, 89% of the electricity consumed comes from renewable sources.
- 729 buyers have received in 2016 the socalled PrINciples training, which continues in 2017 with the IN Practice workshops, designed ad hoc for the Inditex purchasing teams. Thanks to this, the purchase from suppliers with the highest social ratings (A or B), in 2016 accounted for 95% of the total, which shows how the purchase has been oriented correctly in favour of suppliers with a highest degree of sustainability compliance
- In the development of garments, focus is on incorporating textiles that allow reduction in environmental impact and to protect biodiversity, such as organic cotton, which does not require fertilisers or chemical pesticides, or TENCEL®Lyocell, a fiber originated from wood from forests that are managed in a sustainable way
- Since 2013, Inditex has been a member of the Fur Free Retailer Programme by the Fur Free Alliance. Also, in 2015, it definitively rejected the production and sale of angora wool after an agreement with PETA (People for the Ethical Treatment of Animals).
- Prevention programmes such as Clear to Wear standard and the programme The List By Inditex were updated in 2016, increasing the number of chemical substances regulated by these initiatives.
- Commitment to reach Zero Discharge of Hazardous Chemicals (ZDHC commitment) allows contribution to the sustainability of water. In 2016, led the work team of the ZDHC initiative in order to improve the management of wastewater, publishing the Wastewater Guidelines as a result.
- Complete elimination of the use of PFCs in items, studying and promoting the adoption of safe alternatives.
- Implementation of the clean factory strategy for the elimination of the use of APEOS, chemical substances mainly used in the removal of oil stains.
- Since 2014, compliance was verified with PFC Free policy so that all of products are free from perfluorocarbons (PFCs), compounds used in the waterproof and water repelling finishes. Given that this is of obligatory compliance in supply chain, in 2016 160 direct suppliers were provided alternative sustainable solutions for these unwanted substances.
- The List by Inditex; A pioneering global programme to improve the quality of the chemical products used in the manufacturing of textile and leather products.
- Through manufacturing and product analyses audits and later classification, improvements in the use of these chemical substances are implemented with two objectives: Zero Discharge of Hazardous Chemicals (environmental) and Clear to Wear (product).
Zara in the news:
Environment & Social Sustainability Specialist