ETHICS & SUSTAINABILITY
(Instagram ZARA 2020)
ETHICAL AND SUSTAINABLE CHALLENGES ZARA IS FACING
Berta Andres
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(Instagram ZARA 2020)
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CONTENTS ETHICS & SUSTAINABILITY
BUSINESS IDENTIFICATION ………………………...4-7 PESTEL……………………………………..……………. 8-9 Identification of actions taken by the retailer to be more sustainable……………………………….10-11 CORPORATE SOCIAL RESPONSABILITY…………12-13 RECOMMENDATIONS…………………………………14-17 References……………………………………………… 18
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BUSINESS IDENTIFICATION
The international fashion brand ZARA was founded 44 years ago during the mid-1970s, in A Coruña, Spain. Founded by the Spanish billionaire Amancio Ortega, nowadays also the owner of one of the biggest clothing retailer called Inditex. Zara follows a unique strategy based on its customer demand, the brand has the ability to develop new products and getting them into stores within two weeks, allowing the buyers to purchase the latest trends. According to the New York times, Amancio Ortega said “It depends on the customer and how big the demand is. We must have a dialogue with the customers and learn from them. It’s not us saying you must have this. It’s you saying it.” (NYTimes, 2012) But is their successful retail strategy ethic and sustainable? are they selling fair trade products?
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(Instagram raphi.perez 2020)
(Instagram ZARA 2020)
(Instagram ZARA 2020)
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Z
MISSION & VISION
STRATEGY
GOALS & OBJECTIVES
“We conceive our sustainability project as a work in progress. A never-ending task. In 2001, Inditex signed the United Nations (UN) Global Compact, showing our early commitment towards the UN approach to social and environmental sustainability.” (Inditex 2018) “Quality, traceability and sustainability are our model's keywords”(Inditex 2018) “We have the ambition to generate a positive impact in the industry through our programs, projects and practices. And that is our commitment.”(Inditex 2018)
“Sustainability Plans are being integrated into all phases of the product life cycle, including all stages of our supply chain, from design and sourcing to manufacturing and quality control, logistics and sales through stores and online. Through our ongoing focus on developing technological innovations, we have put into place policies and activities related to the continuous improvement of sustainability in the management of our supply chain from a social, environmental, and health and safety perspective.” Inditex 2018) “These plans also include investments in sustainability R&D to foster innovation in this eld and incorporate new technologies, processes and sustainable raw materials to our activities and our garments.” Inditex 2018)
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(Instagram ZARA 2020)
The retailer is developing different strategies to become more sustainable and eco-friendly, Zara’s Join Life collection and the eco-stores are two examples, of their sustainable commitment. According to the Guardian newspaper “The owner of high street fashion chain Zara has announced that all of its collections will be made from 100% sustainable fabrics before 2025” (the guardian 2019). The brand is making notorious efforts to achieve their goals, such as finding solutions to not throw any clothes to landfill, according to the Guardian newspaper “ “We believe that positive approaches are required to find outlets for waste textiles rather than simply imposing a landfill ban.” (the guardian 2019)
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PESTEL Political – the impact 1. The European Commission made four legislative proposals introducing new wastemanagement targets regarding reuse, recycling and landfilling, strengthening provisions on waste prevention and extended producer responsibility, and s t r e a m l i n i n g d e fi n i t i o n s, r e p o r t i n g obligations and calculation methods for targets. (Instagram ZARA 2020)
Political – the issue 1.
Over a quarter of municipal waste is still landfilled and less than half is recycled or composted, with wide variations between Member States.
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Consumers don’t have enough information on clothing labels to be available to make conscious sustainable purchases.
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Too much use of substances harmful to health and environment, pollution of water and air, as well as a short lifetime of clothes.
Economic- the issues 1.
thing underutilisation and the lack of recycling
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The sustainable clothing plan has faced significant funding cuts.
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UK citizens buy more clothes than any other country, without any environmental consciousness.
2. Textile Regulation of 2011 lays down rules for labelling and marking of all textile products, including an obligation to state the full fibre composition of textile products at all stages of industrial processing and commercial distribution, and rules on textile fibre names. 3. European standards are based on minimum performance requirements for textile products, such as Limited use of substances harmful to health and environment, reduction in water and air pollution, colour resistance to perspiration, washing, wet and dry rubbing and light exposure, certificated by the EU ECO LABLE guaranteeing all the European standards.
Economic – the impact 1. £140 million worth of clothing goes to the land field every year, more than $500 billion of value is lost every year. 2. Sustainable Clothing Action Plan does not currently include any commitments to reduce micro plastic pollution from synthetic garments. 3. A o n e p e n c e l ev y o n g a r m e n t s produced for sale in the UK could raise around £35 million for investment in clothing collection points, sorting and recycling.
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Social/ Cultural – the issues 1.
The pressure on suppliers to offer unrealistic low prices.
Technological – the issues 1.
Limited natural resources
Environmental – the issues 1. Businesses with a linear supply chain.
Legal – the issues 1.
Social /Cultural- the impact
Law enforcement is weak towards ethics and sustainability within the fashion industry.
1. Workers work long hours, on far beyond legal limits, for poverty wages and in conditions that breach Occupational Health and Safety (OHS) standards.
Technological – the impact 1.
Creation of new textile technologies that could reduce environmental impacts, such as apparel made from mycelium (mushroom roots), beautiful gowns made out of old plastic bottles, dresses made from reused army surplus, low-impact disposable paper dresses and many others.
Environmental – the impact 1.
93 billion cubic metres of water used in textile production each year, 1.7 billion tonnes of greenhouse gas (GHG) emissions emitted by 2015 textile production and 26% of the global carbon budget will be used by fashion by 2050.
Legal – the impact 1.
Violation of the law, by not paying minimum wage to workers.
(Instagram ZARA 2020)
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Cotton is the raw material most widely-used textile fibre in the world
Identification of actions taken by the retailer to be more sustainable
Zara is collaborating with other agents in the sector on initiatives that promote the sustainability of cotton, for example, Better Cotton Initiative (BCI), Textile Exchange and Organic Cotton Accelerator. The traceability system of Inditex allows to only use cellulose fibres from sustainably-managed woods, On the other hand, for raw materials of synthetic origin like polyester is made of recycled material. Inditex Zara’s retailer has a solid animal Welfare Policy, also is the second-largest consumer in the world of the sustainable Lyocell fibre, the Fourth company in the world for organic cotton consumption and Fourth in the world for consumption of other
GLOBAL RESOURCES Knowing where their articles are produced is what they refer to as traceability, to allow them to know the conditions in which they are produced. Raw materials are chosen carefully, with knowledge of their origin, for the brand to choose the most sustainable options.
(Zenbird 2019)
cellulosic fibres of sustainable origin.
GLOBAL SUPPLY BASE Their supply chain is based on traceability, transparency and innovation key facts to ensure a responsible model of both production and consumption.
( Zara factory 2019)
PRODUCT
PROMOTION
Sustainability Plans are being integrated into all phases of
Sustainable fashion is also a trend within the
their product life cycle, including all stages of the supply
industry. the retailer created a new fashion
chain, from design and sourcing to manufacturing and
line made entirely from environmentally-
quality control, logistics and sales through stores and
friendly materials, launched on social media
online. Inditex is the second largest consumer in the world
creating a campaign using the hashtag
of the sustainable Lyocell fibre, the Fourth company in the
#JoinLife. Nowadays the brand is keeping its
world for organic cotton consumption by volume and
promises and working on improvement.
Fourth in the world for the consumption of other cellulosic
Inditex Group announced corporate
fibres of sustainable origin. The most sustainable raw
sustainability commitments, that include
materials and processes are labelled under the Join Life
switching to 100% organic, sustainable or
concept. The retailer promotes the use of sustainable raw
recycled cotton, linen, and polyester by 2025.
materials such as organic cotton, recycled polyester and
Some critics are calling the move
Tencel TM Lyocell, and aims to reduce water and energy
“greenwashing� due to their fast-fashion
consumption.
business model.
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Principles of sustainability are applied throughout their whole supply chain, with 1,866 suppliers and 7,235 factories. Nowadays Inditex has 2 million people working for over 1,800 suppliers and 7,000 non-exclusive factories, Strategic Plan for a Stable and Sustainable Supply Chain, will continue developing over the next four years.
Zara has nearly 3,000 stores, including its kids and home stores. It has stores in 96 countries and is the flagship brand of the Inditex Group. The Company’s eco-efficient stores programme is one of the most visible aspects of its commitment to the efficient use of resources.
GREEN INITIATIVES
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GLOBAL STORES
The Join Life labelling is a clothing line of garments produced with the most sustainable raw materials and with the best manufactured and most efficient production processes. The Join Life collection and the eco stores are two examples that underline the brand commitment on sustainability and improvement of customer experience. the brand is also Committed and transparent through the Zero Discharge of
RECYCLING INITIATIVES - Reduce GHG emissions by 30% by 2030. - Collection points in all stores. - Commitment to the Global Fashion Agenda is extending this programme to 2,000 stores in 2020. -88% of Inditex waste has been sent for reuse and recycling.
Hazardous Chemicals Programme.
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(Website ZARA 2020)
PROCESSES Their supply chain is based on traceability, transparency and innovation key facts to ensure a responsible model of both production and consumption, their supply chain is linear, the company keeps working on developing a circular supply chain. Zara, one of the world’s largest clothing retailers, says it will eliminate all discharge of hazardous chemicals from its supply chain and products by 2020, following a Greenpeace campaign pressuring the brand to end the use of toxic chemicals in its products.
(Website ZARA 2020)
PROJECT
PLANNING - By 2020, commitment to Zero Discharge
Most Zara stores in the UK feature clothes collection points. Customers can use these to donate items of clothing they no longer need to the British Red Cross. Sorting clothes and recycle fabrics to raise funds, also selling and donating items through charity shops.
of Hazardous Chemicals for its supply chain. - By 2023, ensuring the use of 100% sustainable cellulosic fibres - Absolute eradication of single-use plastics, and complete adoption of green-only packaging. - By 2025, collections created out of 100% sustainable cotton and linen and 100% recycled polyester. - Zero landfill waste from its facilities. - 80% of renewable energy use for its HQ, distribution centres, and stores.
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CORPORATE SOCIAL RESPONSABILITY Zara requires to all suppliers and manufacturers to follow a code of
PEOPLE
conduct about sustainability, According to their CORPORATE SOCIAL RESPONSIBILITY report “Sustainability is understood as the offer of a range of fashion products that strictly observe Human and Social Rights throughout the production line and that meet the most exacting environmental and health and safety standards, all of which is based upon transparency and continuous dialogue with the Company’s stakeholders.” Nevertheless, the brand hasn't been always an example of good labour conditions. According to the European CEO website “In June 2018, the workers’ rights campaign group Global Labour Justice revealed that instances of physical and sexual violence, as well as verbal abuse, had been reported at 540 factories across India, Bangladesh, Cambodia, Indonesia and Sri Lanka, many of which supply the clothing brand Gap. Other European brands including Primark and Zara have been at the centre of their own labour scandals over the past few years, with claims of employees doing unpaid work in squalid conditions running rife.” (Europeanceo 2019))
(Instagram mirenaloss 2020) Inditex has developed a program called “Closing the loop”
PLANET
offering customers the opportunity to drop off their used garments in-store or through the post for their clothes to gain a second life. Zara produces only limited amounts of the same piece to not have much overstock products, this is a strategy to keep the selection fresh, and also to encourage the customer to buy, knowing that next week the store may not have the same stock. The retailer also uses the Greenhouse Gas Protocol to control and reduce their carbon emissions and the “Master Action Plan” to reduce its water wastage. Inditex is part of the G7 Fashion pact, 32 brands joined the sustainable movement focused on 3 pillars: Climate, Biodiversity, and Oceans as well committed to the Global Fashion Agenda by creating a Circular Fashion System. Since 2012, ZARA has committed to reduce its carbon footprint by Zero Discharge of undesired chemicals by 2020, reduce by 15% the energetic intensity of own operations for each garment placed on the market, decrease the use of energy in stores by 10% for each garment placed on the market and Make 100% of ZARA stores eco-friendly by 2020. Overall the brand recognises that going green will be profitable
(Instagram raphi.perez 2020)
for their business in the future
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PROFIT
The group consumers are more interested than ever in sustainable fashion, Inditex could rapidly respond to the consumer demand, named the most sustainable retailer by the Dow Jones sustainability index from 2016 to 2018. According to Teen Vogue “81% of people feel strongly that companies should help improve the environment, with millennials, Gen Z, and Gen X being the most supportive. A recent report by Lyst also showed that online searches for sustainable fashion terms such as ethical brands and eco-friendly have seen a 66% increase since 2018. These numbers emphasise the weight sustainability has in the fashion world, while also underscoring the need for smarter and better ecological solutions.” (teenvogue 2019) Overall the brand considers sustainability a never-ending task, Their commitment to help the planet limited resources is part of their philosophy and at the same time,
(Website ZARA 2020)
is their strategy to fit in the edge of environmentalism.
“We are highly focused on making clothes in a responsible, sustainable way, that limits the impact on the environment and which challenges ourselves to continually work as hard as we can to improve how we manufacture.” (Marta Ortega 2019)
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RECOMMENDATIONS (Instagram ZARA 2020)
STRENGHT - All headquarters and logistic platforms are eco-efficient - 100% of Zara stores will be eco-efficient - Zara launched in-home garments collection programme in Spain, Beijing and Shanghai, China
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100% of our stores in China are eco-efficient All furniture and paper products have sustainable forest certification Commitment to Zero Discharge of Hazardous Chemicals by 2020, promoted by Greenpeace The new environmental evaluation process for the supply chain. New programme to reuse and recycle our own factories waste Zara launched Join Life label - Collaboration with OrganicCotton Accelerator to encourage the growth of organic cotton in India.
- Inditex, the most sustainable retailer according to DJSI for the third year in a row. - Inditex ranked fourth among the companies who “change the world”, according to Fortune’s Make the World Great Again list
- G7 Fashion pact - Global Fashion Agenda
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OPPORTUNITIES Decrease wastefulness Improving the conditions of factory workers - Became a sustainable brand by not promoting such rapid consumption to their clients. - Offering the ‘latest fashion trends’ every 30 days, not every 13 days, to reduce fast fashion impact. 80% of renewable energy in all our facilities -100% sustainable cotton and/or recycled cotton 100% recycled polyester / 100% sustainable linen
WEAKNESSES -Wastefulness is an ineradicable feature of any business model predicated on responding to trends that quickly -sustainability plan makes no mention of improving the conditions of Zara’s many factory workers. -The business model that is actively harmful to the environment puts out a sustainability plan that doesn’t include a massive overhaul of that model. When will fashion brands offer their customers carbon-neutral capsule collections -Zara’s announcement doesn’t address the human rights concerns unsustainably high turnover rate
THREATS Younger consumers, according to McKinsey “Generation Z, is seriously concerned with social and environmental causes, They increasingly back their beliefs with their shopping habits, favouring brands that are aligned with their values and avoiding those that don’t.” (Mckinsey 2019) In consequence, ZARA started recognizing this and placed CSR at the centre of its strategy. Without their fast reaction to customer demand, the brand would be accused of not being a fair trade business, decreasing sales as a result. Nowadays, this idea of giving the appearance of sustainability is a powerful marketing strategy, known as greenwashing. The worldwide retailer has adapted into society demand, offering the consumer what is asking for, and consequently increasing sales.
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(Instagram ZARA 2020)
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ast fashion is an industry which damages the environment in multiple ways. The Spanish International fast-fashion retail brand, Zara; currently offers on-trend garments every 13 days at competitive prices around the world, This type of business has a massive impact on the environment. Therefore Nowadays according to Inditex Zara priorities are “Bringing attractive and responsible fashion, and improve the quality of customer service, are Zara's priorities� ( Inditex 2019). The brand is also making many changes to become more sustainable and eco-friendly, Zara’s Join Life collection and the eco-stores are two examples, of their sustainable commitment. Nevertheless, the brand is being questioned about its sustainable commitment and worker conditions.
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References AMED, I., et al., 2019. The influence of Gen Z on fashion | McKinsey [viewed May 1, 2020]. Available from: https://www.mckinsey.com/industries/retail/our-insights/theinfluence-of-woke-consumers-on-fashion CLARA, 2016. ZARA – How to reduce carbon footprint in fast-fashion, one of the most polluting industry in the world. [viewed Apr 30, 2020]. Available from: https:// digital.hbs.edu/platform-rctom/submission/zara-how-to-reduce-carbon-footprint-infast-fashion-one-of-the-most-polluting-industry-in-the-world/ CONLON, S., 2019. Zara clothes to be made from 100% sustainable fabrics by 2025. The Guardian, jul 17, DUCKBILL, M., 2019. How Ethical Is Zara?[viewed Apr 30, 2020]. Available from: https://goodonyou.eco/how-ethical-is-zara/ ENVIRONMENTAL AUDIT COMMITTEE, 2019. Fixing fashion: clothing consumption and sustainability. FASHION REVOLUTION, 2019. The G7 Fashion Pact: What it is and what it’s missing [viewed Apr 30, 2020]. Available from: https://www.fashionrevolution.org/the-g7fashion-pact-what-it-is-and-what-its-missing/ GLOBAL FASHION AGENDA, 2017. 2020 Commitment [viewed Apr 30, 2020]. Available from: https://globalfashionagenda.com/commitment/ HAMPTON, R., 2019. Zara’s New Sustainability Plan Reveals the Limits of Fast Fashion [viewed May 1, 2020]. Available from: https://slate.com/human-interest/2019/07/ can-zara-be-sustainable.html HANSEN, S., 2012. How Zara Grew Into the World’s Largest Fashion Retailer [viewed Apr. 27, 2020]. Available from: https://www.nytimes.com/2012/11/11/magazine/how-zaragrew-into-the-worlds-largest-fashion-retailer.html HOLGATE, M., 2019. As Zara Announces Its Latest Sustainability Goals, Three of Its Design Team Weigh In on Going Slower and Creating Responsibly [viewed May 2, 2020]. Available from: https://www.vogue.com/article/zara-sustainable-initiatives INDITEX, 2018a. ANNUAL REPORT 2018. [viewed Apr 27, 2020]. Available from: https://static.inditex.com/annual_report_2018/pdfs/en/Inditex%20Annual%20Report %202018.pdf INDITEX, 2018b. OUR COMMITMENT TO SUSTAINABILITY. [viewed Apr 27, 2020]. Available from: https://www.inditex.com/documents/10279/249245/ Dossier_JGA_2019_EN.pdf/1664de2f-ca77-3a40-2b78-cace74c06c82
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INDITEX, S.A., 2015. CORPORATE SOCIAL RESPONSIBILITY POLICY. Inditex [viewed Apr 30, 2020]. Available from: https://www.inditex.com/documents/10279/240918/ Inditex+Corporate+Social+Responsibility+Policy/b7441b41-e378-4f90-95a3-1bc6cc542fc3 MCKINSEY & COMPANY, Feb. The influence of Gen Z on fashion | McKinsey [viewed May 1, 2020]. Available from: https://www.mckinsey.com/industries/retail/our-insights/theinfluence-of-woke-consumers-on-fashion PERRIER, S., 2019. Fashion industry seeks to shake bad reputation with CSR initiatives. In: https://www.europeanceo.com/business-and-management/fashion-industry-seeks-toshake-bad-reputation-with-csr-initiatives/. 12 Apr [viewed Apr 30, 2020]. Available from: https://www.europeanceo.com/business-and-management/fashion-industry-seeks-toshake-bad-reputation-with-csr-initiatives/ PITCHER, L., 2019. Zara’s Sustainability Plan Isn’t Perfect — But It Could Have Big Implications for the Industry [viewed Apr 30, 2020]. Available from: https:// www.teenvogue.com/story/what-zaras-sustainability-efforts-could-mean-for-the-fashionindustry Amancio Ortega dona 300.000 mascarillas y podría fabricar batas sanitarias 2020. [viewed May 3, 2020]. Available from: https://www.woman.es/lifestyle/salud/inditex-coronavirusdonacion-mascarillas-fabricas ONG, R., 2019. 5 Organic cotton fashion brands to discover in Japan | Sustainability from Japan. [viewed May 3, 2020]. Available from: https://zenbird.media/5-organic-cottonfashion-brands-to-discover-in-japan/
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