Fashion Transparency Index Mexico 2020 by Fashion Revolution

FASHION INDEX 2020 EDITION A review of 20 of the biggest Mexican fashion brands and retailers ranked according to how much they disclose about their social and environmental policies, practices and impacts.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

CONTENTS 02 03

FOREWORD EXECUTIVE SUMMARY

08 09 10 12 13 14 17 18 19 19 20 21

ABOUT THIS REPORT Why transparency matters What do we mean by transparency? We recognise that achieving systemic change requires more than transparency. Purpose of the research About the methodology Weighting of the scores How the research is conducted Scope of research Research process How brands and retailers are selected The 20 Brands selected

22 23 24 25

THE FINAL SCORES A guide to the scoring The final scores Quick findings

26 27 28 33 34 38 39 44 45 49 51 58 59

THE FINAL SCORES ACROSS THE 5 SECTIONS Average scores across the sections 1. Policy & Commitments Viewpoint: Mónica Elizabeth Salazar 2. Governance Viewpoint: Annabelle Sulmont 3. Traceability Viewpoint: Humberto Muñoz Grandé 4. Know, Show, Fix Viewpoint: Lorena Cortés 5. Spotlight Issues Viewpoint: Federico J. Arce N. Viewpoint: Juan Martín Pérez García

60 61 61 62 62 63 64 65 66 67 68

FINAL THOUGHTS AND RECOMMENDATIONS Take Action on Transparency Brands and Retailers Governments and Policymakers Citizens Thank You ANNEX 1 References ANNEX 2 Definitions & Abbreviations Disclaimer About Fashion Revolution About Arlenica

The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution. © Fashion Revolution CIC 2020. All rights reserved. This document is not to be copied or adapted without permission from Fashion Revolution CIC.

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FOREWORD:

CARRY SOMERS FOUNDER AND GLOBAL OPERATIONS DIRECTOR FASHION REVOLUTION

“In a post-pandemic world, we want to see more sustainable business models, mature industrial relations and workers who are paid fairly and treated with dignity. Transparency is vital and urgent because it will help us to hold brands to account when they evade responsibility and its associated costs in situations like this.”

In physics, the observer effect is the theory that the mere observation of a phenomenon inevitably changes it. Today, we are seeing something similar happening in fashion. Brands are under scrutiny. They know we are watching them and, as a result, they are starting to change their behaviour, to tell us more about where our clothes are made, who made them and what materials they are using. But they are still not telling us enough. Too much remains unsaid, invisible, or overlooked. Our clothes still conceal the vulnerable and the exploited, the polluted rivers and the plastic oceans. The global pandemic has shown us that the need to hold brands and retailers to account is more pressing than ever before. It has brought to light the impact of decades of price reductions, unfair wages and irresponsible purchasing practices and we have seen the devastating impact of cancelled orders on some of the most vulnerable workers in fashion supply chains. We need major brands and retailers to use this moment to reinforce their strategic commitment and practical actions and shift towards even greater transparency. In a post-pandemic world, we want to see more sustainable business models, mature industrial relations and workers who are paid fairly and treated with dignity. Transparency is vital and

urgent because it will help us to hold brands to account when they evade responsibility and its associated costs in situations like this. And with Covid-19 dominating the news stories, we must not let progress on climate change and halting biodiversity loss be jeopardised by a lack of attention. We need to keep our eyes fixed on these interconnected issues that will have a profound longterm impact on our lives and our planet, and be persistent in letting brands and retailers know that they remain under scrutiny. The observer effect shows how we all act differently when we know we are being watched. This is why it is so vital to ask the questions #whomademyclothes and #whatsinmyclothes all year round. This is also why the Fashion Transparency Index Mexico is being launched at a crucial time for the industry as we deal with the ongoing impact of Covid-19 and the climate crisis. Being watched will influence companies’ behaviour and let them know that we expect better. The Index will also allow brands and retailers to observe the progress of the rest of the industry and benchmark their transparency against that of their peers. This, in turn, will push them towards greater disclosure in the future.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

EXECUTIVE SUMMARY The inaugural Fashion Transparency Index Mexico We are pleased to present the first Fashion Transparency Index Mexico for 2020, a national iteration of the annual Fashion Transparency Index; a flagship initiative of Fashion Revolution CIC. Fashion Transparency Index Mexico 2020 reviews and ranks 20 of the leading brands and retailers operating in the Mexican market according to how much they disclose about their social and environmental policies, practices and impacts. The 20 brands selected for the 2020 report represent a mix of leading footwear, apparel and multi-brand retailers with the largest presence at the national level (according to the number of shops located throughout the country), the positioning of the brand or retailer among the purchasing preferences of Mexican consumers and size of annual turnover. C&A and Leviâ&#x20AC;&#x2122;s are two multinational brands with significant

presence in the Mexican market, which is why they have been included in our review. According to their annual turnover, we classify three groups: the first made up of two brands with an average annual turnover of 7.7 billion dollars, the second made up of three brands with an average turnover of 1.5 billion dollars and the other 15 with an average annual turnover of 368 million dollars.1

animal welfare, biodiversity, chemical management, carbon emissions, due diligence, employee development and wellbeing, forced labour, freedom of association, gender equality, living wages, purchasing practices, supply chain disclosure, waste and recycling and working conditions, among others. The weighting of the scores is intended to emphasise increasing levels of detailed and granular disclosure.

The annual global Fashion Transparency Index has been conducted since 2016 and now reviews and ranks 250 of the world largest brands and retailers according to how much they disclose about their social and environmental policies, practices and impacts. Fashion Revolution Brazil launched the Brazil edition in 2018.

The Fashion Transparency Index Mexico methodology has been created by Fashion Revolution CIC and adapted for local context by the Arlenica, Art, Language and Research for Social Change and Fashion Revolution Mexico.

The Fashion Transparency Index Mexico 2020 is comprised of 219 indicators covering a wide range of social and environmental issues such as

In many ways, the big companies in the fashion industry, in Mexico and in the world, have played - and continue to have - an important role in accelerating

Why do we focus the analysis on major brands and retailers?

1. Information collected from Euromonitor and ExpansiĂłn, The turnovers reflect date form 2018, exchange rate used: 18.92 mexican pesos per dollar.

the climate crisis and are responsible for many of the human rights abuses that persist in global supply chains. The reason we focus on large corporate brands and retailers is because they are powerful and strategic players in the sector. The current prevailing business model based on high volume production impacting millions of lives (positively in that it provides people with jobs but also negatively in that those jobs are typically precarious, very low paid, exploitative and lacking the protection of basic fundamental labour and human rights) and overconsumption depleting precious natural resources, polluting ecosystems and degrading the health of our planet. But this can and should change and large companies have an outsized responsibility and role to play, given that where there are big negative impacts, there can be big transformation.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

The Fashion Transparency Index can be a useful tool to encourage greater transparency from large brands and retailers The global Fashion Transparency Index, and the Brazil edition have both been a useful tool to create dialogue with some of the largest brands and retailers globally. We believe that publicly highlighting the need for transparency, via the Index, pushes large brands and retailers to publicly account for their policies, practices and social and environmental impacts. For Fashion Revolution, transparency is the beginning and not the end, that is, it is the first step in a journey that leads to greater accountability and accountability that, in turn, leads to changes in practice. We know that transparency alone will not solve the industry's many systemic issues but it does help to reveal the structures in place so that we can understand how to change them. Transparency does not mean sustainability, but it is an important tool that sheds light throughout the value chain of the fashion industry from the extraction of raw materials

to disposal. Only by seeing the social and environmental challenges and problems present behind the scenes of the industry, will it be possible to act effectively in order to protect human rights and our living planet. It is very difficult to hold companies and governments accountable if we cannot see what is really happening. That is why transparency is so important. For example, the disclosure of supplier lists is essential to ensuring human rights, as a necessary step towards accountability when violations occur. Supply chain transparency allows workers, their unions and other labor rights advocates to know which brands workers are producing for, giving them the opportunity to raise complaints directly with brands and seek immediate and adequate remediation and improvements. In addition, as a consumer, you have the right to know that your hard-earned money is not supporting exploitation, human rights abuses and environmental destruction. But there is no way to hold brands and governments to account if information about what we buy is kept secret.

This is not a shopping guide. The Fashion Transparency Index does not evaluate which brands and retailers are the most sustainable, but rather who reveals the most information. We are not recommending or endorsing any of the brands and retailers reviewed, regardless of their scores. The purpose is to understand how much social and environmental information is shared by Mexico’s largest brands, to drive greater disclosure from them and to use this information to hold them to account when needed. Transparency is not the same as sustainability; however, it is an essential element of sustainability as without it we cannot see and protect vulnerable people and natural resources, nor can we hold companies accountable for the actions derived from their business.

Importance of the Fashion Industry in Mexico In Mexico, the fashion industry contributes approximately 2.4% of the GDP manufacturing sector, equivalent to $73,632 million pesos.2 In 2018 alone, the clothing sector employed more than

2. Colección de estudios sectoriales y regionales. Conociendo la industria del vestido 2019. INEGI, CANAIVE. 3. Colección de estudios sectoriales y regionales. Conociendo la industria del vestido 2019. INEGI, CANAIVE. 4. Cámara de la industria del calzado de guanajuato, 2018. Estadísticas a propósito de la industria del calzado, INEGI 2014. 5. Colección de estudios sectoriales y regionales. Conociendo la industria del vestido 2019. INEGI, CANAIVE. 6. Cender Equality and the Empowerment of Women for Inclusive Growth in Mexico. OECD 2020. https://www.oecd.org/about/secretary-general/gender-equality-and-empowerment-of-women-for-inclusive-growth-mexico-january-2020.htm

half a million people, mostly women.3 With regard to the footwear sector, Mexico is the ninth largest producer in the world, led by the state of Guanajuato, where 7 out of every 10 pairs of shoes are manufactured in the country.4 The fashion industry in Mexico contributes substantially to economic growth and stability, it generates millions of jobs, with 6 out of 10 of those jobs occupied by women.5 Mexican women carry out three quarters of all unpaid work in the home, including childcare.6 Providing decent and equitable employment opportunities for women can support gender equality, poverty alleviation and increased access to education.

International brands are currently disclosing more information than the Mexican Brands but there is still a long way to go 90% of the 20 brands included in the Fashion Transparency Index Mexico scored below 10%. In total, 11 brands scored 0%, meaning they disclose no information about their supply chain.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

Among the 20 brands reviewed, the international brands, C&A and Levi's, scored the highest by a significant margin at 68% and 48% respectively. Whilst the top scoring Mexican brand, El Palacio de Hierro, scored only 9%. The significant difference in the levels of transparency presented by international brands compared to national companies is an indication of how these brands have been influenced by international bodies, legislation and consumers over the past seven years, in large part as a response to the Rana Plaza factory collapse in Bangladesh. This was a watershed moment that highlighted the grave conditions in which the people who make our clothes so often work and how a lack of supply chain transparency can cost lives. When it comes to the environmental impacts of fashion, action by international brands has been triggered by the adoption of the Sustainable Development Goals (SDGs) in 2015, the Paris Agreement in 2016 and both the UN Fashion Industry Charter on Climate Action and the G7 Fashion Pact, which each aim to combat climate change and reduce global greenhouse gas emissions. International brands have increasingly been subject to public scrutiny on their social and environmental practices and impacts in ways that perhaps national brands in Mexico have not yet been.

C&A features in the top 5 highest scoring brands in all 3 reports, global, Mexico and Brazil, in 2020. Whilst C&A's leadership in transparency and public disclosure of information clearly stands out they still have a long way to go in achieving meaningful transparency, that translates into improved practices. During 2020, C&A showed little commitment to upholding their public policies and supply chain pledges in walking away from their suppliers and their workers by canceling orders during the onslaught of the COVID-19 repercussions across the industry. Our Index findings show that C&A discloses little about their purchasing practices and how the company works to ensure that the prices they pay allow for the protection of workers wages and benefits. C&A also does not disclose the percentage of retrospective changes made to orders or payment terms after the original purchase order agreement was made, and this is precisely the action that C&A was reported to have taken as a result of the pandemic. This further highlights that whilst increased disclosure is certainly a step in the right direction, what can often be most telling is the information that a brand chooses not to disclose. We hope that the Fashion Transparency Index Mexico will encourage meaningful and holistic disclosure from leading brands, and that they will not shy away from more egregious and salient issues such as purchasing practices.

Mexican brands and retailers are on a long road to transparency The top 5 scoring brands evaluated are: C&A with 68%, Levi's with 48%, El Palacio de Hierro with 9%, followed by Liverpool and Suburbia, tying at 7%, and in fifth position the shoe brand Flexi with 6%. The average score of the 20 brands reviewed this first year is 7% with the following averages scores per section.

Section 1

13%

Section 2

12%

Section 3

Section 4

Section 5

If we compare our findings with those of the global and Brazilian Indexes in their initial year we see that there is a significant difference in the total average score, and the average scores per section, showing little effort from the Mexican brands to publicly disclose their policies, practices and impacts on social and environmental issues. This begs the question, are these brands doing work behind these scenes that they have not communicated publicly? Or worse, are they not working to ensure that their value chains uphold human rights and protect the living planet

FTI 2017

FTI Br. 2018

20%

17%

FTI Mx. 2020

We found that the Mexican brands and retailers communicate more about the company values and policies than how these are carried out in practice. On average, companies scored 13% in section one, which analyses the information they publish in relation to their policies and commitments. While information regarding their due diligence processes, supplier assessments and remediation of labour and environmental issues had the second lowest level of disclosure at 6% average for Section 4. The information related to our spotlight issues which addresses topics such as working conditions, overconsumption and waste, material composition and climate change with an average percentage of only 5%.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

Traceability in the supply chain remains an unknown issue for national brands Much is hidden within the fashion supply chain, largely because of its scale and complexity, and we know that labour and environmental exploitation can thrive most easily in areas that we cannot see; such areas that may not yet be visible to the brands themselves, areas that remain invisible within their supply chains due to lack of information or because they consider them to be outside their sphere of responsibility. In order to take responsibility and identify, remediate and prevent salient human rights and environmental issues a company must first be able to find and see them. Whilst companies continue to lack complete oversight of their supply chains they can not be sure - nor assure their stakeholders and customers whether or not they are perpetuating human rights and environmental abuses. Citizens increasingly want to know that the products they buy have not contributed to human or environmental exploitation. They want to know both the origin of a product’s raw materials and the conditions under which their garments are made. At present, there is still very little information to be found about these issues. This year, we found that only 3 brands disclose the names of their first tier suppliers where their clothes are being manufactured: C&A, Levi’s and Flexi (who

is the only Mexican brand that discloses this information). In Flexi’s supplier list, they detail the names of the facilities, addresses, the parent company that owns the facility and the types of products or services that take place at the facility. While this is a positive start, no Mexican brand discloses any supplier list beyond tier 1 or for raw materials. C&A and Levi’s both publish a supplier list for their processing facilities beyond tier 1, but only C&A publishes a list of a small number of raw materials suppliers, receiving the points for disclosing their viscose suppliers.

The impact of COVID-19 on the people who make our clothes Since the start of the COVID-19 pandemic, business-as-usual has collapsed throughout the fashion industry. With retail shops closed and online sales slowed by the global economic downturn, fashion brands have had an extremely challenging year in 2020. Yet, as is too often the case in times of crisis, many of the hardships of this pandemic have fallen on the most vulnerable members of the supply chain: the workers. Brands have been cancelling their orders from factories and suppliers, withholding payments of finished and in-production goods, with some brands yet to pay and others that are demanding discounts. This first year we found that none of the 20 brands that were evaluated publish a policy to pay their suppliers within 60

days, nor do any brands publish data on the percentage of orders paid on time and according to the agreed terms. And, no brands yet publish data on the percentage of changes made to orders or payment terms after the original purchase order agreement was made. These pieces of data would tell us a lot about the steps that brands are making to ensure their purchasing practices are enabling suppliers to plan ahead and avoid cutting costs that most negatively impact their workers.

of discrimination, unequal pay and opportunities - are endemic and require urgent action to increase women's protection and treatment and to empower women through equal pay. However, we found that only one brand, Levi’s, discloses the actions they are taking to ensure equal pay for their own employees and suppliers as well as publishes the distribution of job roles by gender in their own operations and discloses their annual gender pay gap.

COVID-19 highlights why brands must stop keeping their purchasing practices secret. By remaining untransparent on this issue, brands can continue to routinely change order terms or cancel orders at the last minute, delay payments and demand payment terms of 90 to 180 days after delivery, leaving their suppliers to bear the upfront costs of materials and workers' wages, especially in the exceptional circumstances we are facing now due to the pandemic.

Meanwhile, no brands publish data on the prevalence of gender-based labour violations in supplier facilities. This is particularly pertinent at this time, when complex systems of violence continue to impact millions of women living in Mexico, a salient issue not just for the fashion industry but for our entire country. The systemic structures that uphold these issues within the fashion industry and the wider context of Mexico are similar and one should not be addressed or remediated without the other.8

Structural violence, decent wages and gender equality are not yet being addressed by Mexican brands

Environmental impacts and resource depletion caused by the industry are still on a disastrous trajectory

An estimated 70-80% of employees in the ready-made garment sector in production countries are low-skilled female workers and frequently minors.7 In an industry where the majority of the workforce are women, genderbased labour rights violations - such as sexual harassment, various forms

Issues such as overconsumption, resource depletion and climate degradation are all impacted heavily by brand's business models and production habits. Efforts to slow down the consumption of finite resources or implement circular systems to reuse waste and maximise resource use appear

7. Salarios y tiempo de trabajo en los sectores de los textiles, el vestido, el cuero y el calzado. Documento temático para el debate en el Foro de diálogo mundial sobre los salarios y el tiempo de trabajo en los sectores de los textiles, el vestido, el cuero y el calzado (Ginebra, 23-25 de septiembre de 2014), OIT. 8. “El 26.6% de las mujeres que trabajan o trabajaron han experimentado algún acto violento en el ámbito laboral”, María Luis Alcalde, Secretaria de Trabajo y Previsión Social, 6 de marzo del 2019.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

to be absent from the agendas of Mexican brands. No brands included in the Index publish the quantity of products they produce per year, while only 2 brands, C&A and Levi’s, disclose any evidence of developing circular solutions to enable textile-textile recycling, and even this information is vague and the outcomes are not yet disclosed. When it comes to environmental objectives on energy and carbon emissions, more brands are disclosing this information; 5 brands (25%) publish an energy and carbon emissions policy for their own operations. However, only 2 brands (10%) publish how they put this policy into action, and only 2 brands are publishing an annual carbon footprint for both their own operations and in the supply chain. Mexico is one of the largest suppliers of jeans to the United States.9 The denim industry is renowned for its contribution to issues such as chemical use and management, water use and contamination, soil and biodiversity degradation and dangerous working conditions. In San Mateo Ayecac alone, located south of the state of Tlaxcala, 40,000 jeans are manufactured per week.10 This leaves a significant water footprint and high levels of pollution in rivers such as the Atoyac, located precisely in Puebla and Tlaxcala. Given this, it is surprising that only one brand

publishes its annual water footprint for its own operations, suppliers and raw materials, and only 2 brands disclose a commitment to eliminating the use of hazardous chemicals from their supply chain and their progress towards achieving it. These issues in our country require immediate attention and remediation, without brands’ public disclosure of these efforts, we cannot see if or how they are taking responsibility. Economic advancement through such export industries has come at the expense of the Mexican land and people for too long.

Employment situation and opportunities 80% of the brands in this Index did not publish any policies on labour rights, such as holidays, employment contracts, wages and benefits, maternity/paternity rights, working hours, overtime and freedom of association, for employees or suppliers. These are issues that are in urgent need of transparency, after figures have revealed that Mexico is a country with a high level of precarious employment. 71.7 million people do not have access to social security, which is equivalent to 57.3% of the total population11 without the possibility of covering basic health needs and pensions for disability or old age. CANDOR: Alex, maestro tejedor © Impulso Región, José Reyes

9. Cotton Incorporated, 2008, 2011 10. Deshilando etnográficamente la mezclilla: materialidad y entramados socio ambientales paradójicos, Febrero 2017. Redylac.org. UAEM: https://www.redalyc.org/jatsRepo/747/74753721008/html/index.html 11. Consejo Nacional de Evaluación de la Política de Desarrollo Social (CONEVAL).

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ABOUT THIS REPORT

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

WHY TRANSPARENCY MATTERS Lack of transparency cost lives In the aftermath of the collapse of the Rana Plaza factory in Dhaka, Bangladesh seven years ago, local organisations had to physically search through the rubble to find clothing labels and check which brands were producing there. In some cases, it took weeks for brands to determine why their labels were found in the ruins and what sort of purchasing agreements they had with those suppliers. This is because the vast majority of today’s fashion brands and retailers do not own their manufacturing and supplier facilities, making it challenging to control and monitor building and fire safety, working conditions and environmental management across a highly globalised and fragmented supply chain. Brands and retailers may work with hundreds or even thousands of factories at any given time – and that is just the suppliers that cut, sew and assemble our garments in the final stage of production.

There are many suppliers and facilities further down the chain that weave, dye, print and finish fabrics, spin yarn, and farms that grow fibres used in our clothing. Since Rana Plaza, tragic and fatal factory fires and accidents, poor and exploitative working conditions, pollution and environmental degradation remain rife throughout the global fashion supply chain. If we don’t know where and by whom our clothes are being made, it is difficult for relevant stakeholders to work together to fix problems before they end in tragedy. Transparency matters because, simply put, a lack of transparency costs lives. Without transparency we cannot see or protect vulnerable people and the living planet. With increased transparency, trade unions, NGOs, journalists and customers can make the connection between corporate social responsibility policies and their impacts on the ground.

Disasters like Rana Plaza have also occurred in Mexico The earthquake of 19 September 1985 destroyed more than 800 mostly clandestine garment factories, where more than 40,000 seamstresses lost their jobs and hundreds more died after not being able to escape, as the managers were said to have locked the doors to prevent theft. The catastrophe brought to light the labour situation: toilets without water or paper; empty water bottles; piece-rate pay; working days of more than ten hours, and salaries below the law.12

However we believe that brands’ social and environmental responsibility goes beyond the doors of their own establishments, and it is necessary for them to seek greater understanding of what they do and the impact that their business activities have on workers, communities and the planet throughout the entire value chain.

As a result of this incident and the union of the workers to demand the payment of their settlements and compensation for the victims, the first National Union of Women Workers in the Garment, Clothing, Similar and Related Industries was created on September 19, 1985. About 8,000 workers from Mexico City and the states of Estado de Mexico, Morelos, Coahuila and Guanajuato joined this union. However, 30 years later, the collapse of the Chimalpopoca garment factory, on 19 September 2017 - due to another earthquake - showed that garment workers in Mexico are still working in deplorable conditions. Many brands remain unaware of the working conditions that prevail in the factories where the clothes they sell are produced. This is

12. información recopilada de diversas medios de comunicación: https://cimacnoticias.com.mx/noticia/costureras-ejemplo-de-lucha-sindical/ https://www.dememoria.mx/nacional/el-sindicato-que-dejo-el-terremoto-cuando-las-costureras-pelearon-por-sus-derechos/ https://www.sinembargo.mx/20-09-2015/1491773

because brands tend to believe that they are only accountable for their direct business relationships and not their entire supply chain.

[TOP] After the earthquake, the seamstresses got together to demand payment of compensation © Fabrizio León [BOTTOM] National Union of Sewing, Dressmaking, Clothing, Similar and Related Workers September 19 © SemMéxico

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

WHAT DO WE MEAN BY TRANSPARENCY? For Fashion Revolution: Transparency means the public disclosure of credible, comprehensive and comparable information on companies' social and environmental policies, practices and impacts throughout their value chain.

Transparency means public disclosure Transparency is more than just sharing the good work that brands are doing. We often see brands talking about their business values and positive progress without sharing much about the systemic challenges they face and the honest and real results of their efforts to protect human rights and the environment. This is what many would consider greenwashing.

It is also not enough to disclose crucial supply chain information internally or selectively to certain stakeholders only. This is how brands have operated for a very long time, yet widespread abuses remain endemic across the industry. True transparency requires public disclosure that shows a full picture of a brand's risks, actions and results.

TRANSPARENCY

ACCOUNTABILITY

If done well, transparency can enable accountability Transparency allows all parties involved to see and understand what is happening, who is responsible and how to fix it. Transparency enables others to scrutinise what companies say they are doing to address human rights and protect the environment. It means that there is information available for which others (consumers, investors, lawmakers, journalists, NGOs, trade unions, workers themselves) can hold brands and retailers to account for their policies and practices, especially when things go wrong like it did that day at Rana Plaza.

CHANGE

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

Being transparent doesnâ&#x20AC;&#x2122;t mean that companies are behaving in a responsible and sustainable manner. A brand may publish a considerable amount of information about its policies, practices and impacts and still be contributing to poor working conditions and environmental degradation. On the other hand, brands may be doing excellent work behind the scenes to make improvements, but if they donâ&#x20AC;&#x2122;t share this information publicly then no one may know about it and this learning cannot be shared more widely with others who may find it useful. To enable a more sustainable fashion industry, one that takes accountability, upholds human rights and protects the environment, we need a radical paradigm shift and mass consumption needs to be transformed. This means that the business models of these large corporate fashion companies will have to change and multiple solutions will likely be needed. Transparency alone does not represent the kind of structural and systemic change we need, but it is a first step to help us collectively achieve it.

There are business benefits of greater transparency Consumers, investors and other stakeholders are increasingly expecting brands and retailers to be more transparent about where, how and under what conditions their products are made.

But there are also benefits to companies of pursuing greater traceability and transparency, including:

T R A N S PA R E N C Y

1. Enables brands to more easily track unauthorised subcontracting and better understand their risks 2. Enables collaboration with other brands sourcing in the same facilities 3. Helps brands comply with an increasing numbers of national and international standards and regulation

FA I R T R A D E W E L L- B E I N G L I V I N G WAG E S EMPOWERMENT

4. Enhances brand reputation, demonstrating that they're willing to be open, honest and make improvements 5. Allows brands to receive speedy and credible information from worker rights and environmental groups in turn helping mitigate risks and address issues more quickly 6. Identify bottlenecks and inefficient processes throughout the supply chain to improve workflows and save money

GENDER EQUALITY BUSINESS ACCOUNTABILITY S U S TA I N A B L E L I V E L I H O O D S GOOD WORKING CONDITIONS E N V I R O N M E N TA L S U S TA I N A B I L I T Y

A FAIRER, SAFER, CLEANER FASHION INDUSTRY

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WE RECOGNISE THAT ACHIEVING SYSTEMIC CHANGE REQUIRES MORE THAN TRANSPARENCY.

Change is a process

Inclusivity is key

More information is needed

Turn data into action:

Systemic and structural change is not going to happen overnight. To end labour exploitation and environmental degradation, many incremental but transformative steps are required, and we believe that the first step is greater transparency. This will need brands and retailers, governments and citizens each taking action. It will require a change of culture that makes us understand that access to information is a powerful tool for positive change but not the only one.

Millions of people are employed throughout the supply chains of big corporate brands, and we must aim to create a future for the fashion industry that is able to provide decent work, sustainable livelihoods, hope and dignity for everyone employed in it, from farm to retail. This means that workers should be included in and at the centre of transformative and systemic change.

Many people continue to shop from big corporate brands, but want more tools to understand how products are made, where they are made, by whom, under what conditions and at what environmental cost. Each year our #WhoMadeMyClothes and #WhatsInMyClothes campaigns grow with more people asking these questions of the brands they love, and this is becoming increasingly visible in Mexico, especially among certain socioeconomic groups. This report is one tool that helps consumers and other stakeholders better understand what major brands say they are doing to address their human rights and environmental impacts.

Data and information shared by companies must be accessible and detailed enough to provide a clear path for action. What we each do with publicly available supply chain information, how we use it to drive positive change, is what will count most in achieving transformative, systemic change. .

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PURPOSE OF THE RESEARCH Fashion Revolution has been campaigning for greater transparency throughout the fashion industry since 2013 and our #WhoMadeMyClothes social media campaign has inspired millions of people to take action. To build upon this question, the Fashion Revolution community asked for support in better understanding the social and environmental information being shared by major brands and retailers. Our community wants to know what information they should expect to find disclosed by major brands, what it means, how to put the information they find into a wider context and how to make use of this information to drive change. We created the Fashion Transparency Index for this purpose.

The Fashion Transparency Index is designed to: •

Compare the level of transparency among Mexico’s largest fashion brands and retailers;

•

Incentivise major brands and retailers to disclose a greater level of credible, comparable and detailed information year-on-year by leveraging their competitive tendencies;

•

Analyse trends in transparency across the national fashion industry;

•

Use the findings to help shape our ongoing campaigning efforts;

•

Strengthen a culture of transparency among strategic actions in the Mexican fashion industry.

The Fashion Transparency Index is not a shopping guide The Fashion Transparency Index is not an indication of whether particular brands are ‘good’ or ‘bad’. We are not recommending or endorsing any of the brands and retailers reviewed, regardless of their scores. The purpose is to understand how much social and environmental information is shared by the world’s largest brands, to push brands to disclose more about their social and environmental activities and to use this information to hold them to account when needed.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ABOUT THE METHODOLOGY The Mexico 2020 Fashion Transparency Index uses a ratings methodology, which awards increasing levels of detail and disclose across five areas: 1. Social and environmental policies and commitment

How brands and retailers are scored Brands receive points for information that has been publicly disclosed through the following channels: •

Brand/retailer website;

•

Parent company or group website(where there is a link to the company’s website);

•

Another external third party website (e.g.online data platform, NGO partner, data sharing initiative, another benchmarking disclosure - so long as the weblink is made available via the brand’s own website);

2. Governance 3. Supply chain traceability 4. Know, Show and Fix (supply chain due diligence and remediation) 5. Spotlight Issues (working conditions, consumption, 6. Product/material composition and climate)

•

Documents available to the public andwhich can be freely and easily downloaded through the brand’s website.

The methodology is also based upon alignment with existing international standards and benchmarks such as the United Nations’ Guiding Principles, the Sustainable Development Goals, OECD Due Diligence Guidelines, International Labor Organisation conventions, Know The Chain, Corporate Human Rights Benchmark, the Transparency Pledge and various national laws and standards.13 The methodology was designed in 2017 through a four-month consultative process. Fashion Revolution relied upon the pro-bono input of a diverse group of industry experts and stakeholders from academia, the trade union movement, civil society organisations, socially responsible investment, business consulting and journalism. In consultation with the expert advisors, each year the global methodology is updated in order to clarify language, select new annual Spotlight Issues and ensure that it stays current and acts as a driver of industry best practice on transparency. Our global consultation committee includes, among others:

•

Dr. Mark Anner, Director of Centre for Global Workers’ Rights at Penn State University

•

Aruna Kashyap, Human Rights Watch

•

Kate Larsen, SupplyESChange Initiative

•

Neil Brown, Liontrust Asset Management PLC

•

Dr. Alessandra Mezzadri, SOAS, University of London

•

Professor Ian Cook, University of Exeter

•

Katie Shaw, Open Apparel Registry

•

Subindu Garkhel, Fairtrade Foundation

•

Francois Souchet, Ellen MacArthur Foundation

•

Christina Hajagos-Clausen, IndustriALL Global Union

•

Joe Sutcliffe, Advisor - Dignified Work, CARE International

•

Kristian Hardiman, Good On You

•

Ben Vanpeperstraete, human rights expert

13. Federal Law on Animal Health. Federal Labour Law, General Law of Ecological Balance and Environmental Protection. General Law of Sustainable Forest Use. Federal Law to Prevent and Eliminate Discrimination. Federal Law on Women's Access to a Life Free of Violence. Convention on the Elimination of All Forms of Discrimination against Women. Migration for Foreigners Act. Convention on the Rights of Migrant Workers and their Families General Law for the Inclusion of Persons with Disabilities General Law on Climate Change. Federal Law on Energy Efficiency. Convention C100 on Equal Remuneration for Men and Women Workers, among others.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ABOUT THE METHODOLOGY Indicators for Mexico: For the contextualisation and adaptation of the methodology to the Mexican context, we sought input from an Advisory Committee composed of representatives of the Textile and Footwear Chambers, civil society organizations, academia, fashion designers, representatives of design platforms and industry opinion leaders within Mexico. This committee collaborated in the analysis and selection of indicators that will show urgent issues to be addressed by the Mexican industry. It was decided to include issues related to the health, well-being of employees and capacity to increase their quality of life through their work in the mexican garment industry. Topics such as emotional wages linked to mental health, life skills training, provision of nutritious meals, support with day care centres and flexibility of working hours are acknowledged. This is in line with the new NOM-035 law, which came into force in October 2019 and requires employers to identify, analyse and prevent psychosocial risks.

Professional skills training along the entire value chain of the Mexican fashion industry is a priority issue to be addressed. The leather-footwear chain, one of the most important sectors in our country, continues to develop in a traditional way in small family workshops without access to credit or training. To increase the industry's competitiveness, investment is required in textile engineering, technological engineering and personnel training. For this reason, we have integrated topics related to what companies are doing to support the development of new talents, professional growth and skills training for employees. Due to the presence in the country of national and state associations and chambers linked to the textileclothing and leather-footwear industry and the increase of their narrative towards sustainability; we ask brands for evidence of membership in one of these organizations with the intention of knowing the collaborative efforts they make for the benefit of the industry.

Our Advisory Committee includes: •

Abril Appel, General Director, National Chamber of the Textile Industry, CANAINTEX.

•

Alejandro Gómez Támez, Executive President of the Footwear Chamber of the State of Guanajuato, CICEG.

•

Anabelle Sulmont, Coordinator of the Project Public Policies with a focus on Human Development and Inclusion of the United Nations Development Programme in Mexico, UNDP.

•

Carlos Lara, Founder Artículo 27 A.C.

•

Elena Hurtado, General Director Intermoda.

•

Federico Arce Navarro, Master in Environmental Law, Professor at UNAM.

•

Humberto Muñoz Grandé, Director of the Doctorate in Corporate Social Responsibility, Universidad Anáhuac .

•

Joanna Ruíz Galindo, Founding Partner, Abierto Mexicano de Diseño

•

Jorge Plata, Founder and General Director, Argentum Textil

•

Marisol Conover, Directora de la Maestría en Moda, Universidad Anáhuac.

•

Mónica Salazar, General Director, Dignificando el Trabajo, A.C

•

Rodrigo Olvera, Human Rights Defender and Member of the Organization, Maquila Solidarity Network.

•

Shula Atri, General Director, Fashion Group México.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ABOUT THE METHODOLOGY

In total, there are 250 possible points over 219 indicators across 20 brands. This means we have researched and analysed over 4000 individual data points. The weighting of the scores is intended to emphasise increasing levels of detailed and granular disclosure. In other words, we reward disclosure that enables external stakeholders to meaningfully use that information to hold brands to account; for example, supplier lists, audit findings, wage data, etc.

How we calculate the findings: â&#x20AC;˘

All scores have been calculated to two decimal places (in the complete data set) and then rounded to the nearest whole percentage point (what you will read in this report).

â&#x20AC;˘

All averages in this report represent the mean.

Some brands publish annual reports that span over 300 pages, with footnotes and appendices. It is quite possible our research team (or even brands themselves) may have missed relevant disclosure. However, we have been as thorough, meticulous, objective and fair as possible. This is why we urge you to focus on the ranges in which brands score rather than their individual scores. The ranges reveal patterns of industry disclosure rather than precise measurements. It is also important to note that there could be different information for brands included in the global version and the Mexican version, due to the time of year when the research was carried out for each report. Each analysis used the most recent information available when the analysis was conducted, and this could have led to differences in the final scores of the brands reviewed in both indices. The data in this report captures a moment in time and is only as current as of 5th July 2020. Brands may disclose or retract information at a later date.

For more information, please click here to download the template of the Mexican questionnaire sent to the brands.

We recognise that the methodology is not perfect and can always be improved. We welcome any feedback on how to make it better:

mexico@fashionrevolution.org mfranco@arlenica.org

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

WEIGHTING OF THE SCORES 1.

POLICY & COMMITMENTS This section explores brandsâ&#x20AC;&#x2122; social and environmental policies for both their own employees and workers in the supply chain, how these policies are implemented, how the company prioritises issues, what goals it has in place and if theyâ&#x20AC;&#x2122;re reporting annual progress.

TOTAL POSSIBLE POINTS (250) WEIGHTING (%)

GOVERNANCE

TRACEABILITY

Here we look at who on the executive board has responsibility for social and environmental performance, how this is implemented, how social and environmental improvements are linked to employee, CEO and supplier performance, and whether the relevant department and person in charge can be easily contacted by the public.

In this section we look for brands to publish supplier lists at three levels: manufacturing, processing facilities and mills, and raw materials. We also look for extra details such as supplier address, number of workers, gender breakdown, number of migrant workers, union representation and when the list was last updated.

KNOW, SHOW & FIX Here we review what brands disclose about their due diligence processes, how they assess suppliers against their policies, what are the results of these assessments, what do they do when problems are found, how workers can file complaints and how these are addressed.

SPOTLIGHT ISSUES In this final section we explore what brands are doing to address forced labour, gender equality, living wages, freedom of association, waste, circularity, overproduction, use of more sustainable materials, microplastics, deforestation, climate change and water use.

18.8%

4.8%

31.6%

25.2%

19.6%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

HOW THE RESEARCH IS CONDUCTED The research was a collaboration between the Fashion Revolution CIC, Arlenica and Fashion Revolution México. It was a joint effort of:

Fashion Revolution CIC

Fashion Revolution México

ARLENICA

Sarah Ditty

Efraín P. Martínez

Lorena Cortés

Global Policy Director

Country Coordinator

Executive Director

Carry Somers

Christian Stefanoni

Magali Franco

Global Operations Director

PR and Communications

Project Coordinator

Ilishio Lovejoy

Mireille Acquart

Luis A. Mosqueida

Policy and Research Manager

Strategic Alliances Coordinator

Sienna Somers Policy and Research Coordinator

Researcher

Julio Martínez Researcher

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

SCOPE OF RESEARCH The Fashion Transparency Index has been designed to give an illustrative look at how much brands know and share about their policies, practices, impacts and supply chains. We have deliberately chosen to focus specifically on transparency through public disclosure and not on everything that brands and retailers are doing internally through their companies and supply chains. Brands and retailers may well have excellent internal policies and programmes, but if they are not shared publicly they are not considered in this research.

What is beyond the research The Index does not provide an in-depth analysis of the credibility, authenticity or accuracy of brands' policies, procedures, performance and progress in any given area. Verification of claims made by brands and retailers is beyond the scope of this research. We have designed the methodology to provide insights that reveal patterns of disclosure that are comparable over time and allow brands to see where they stand in terms of transparency compared to their peers.We hope you use this information to query their claims.

RESEARCH PROCESS December 2019 - February 2020 Methodology updates: Industry research and consultation process informs how we select new Spotlight Issues, devise new indicators and tweak any others. The brand questionnaire is prepared and translated. During this time, we also research and select the 20 brands and retailers to be reviewed.

Aril - May 2020 Research the selected brands and retailers: Our researchers review each brand and pre-populate their questionnaire with evidence of the relevant public disclosure and award them preliminary points. Researchers reviewed and quality checked the data during this time. At this time, brands are notified of their inclusion in this yearâ&#x20AC;&#x2122;s Index and are invited to participate.

Early June 2020 Brands workshops: Virtual workshops are held in coordination with the brands in the Index to explain the methodology.

June 2020 Brands receive questionnaires to complete: Brands are given approximately one month to fill in the gaps on their brand questionnaires, alerting us to information our researchers may not have found.

July 2020 Brands return completed questionnaires: Brands that choose to participate return their completed questionnaires. Our research team reviews responses and awards additional points where sufficient disclosure has been made.

August - September 2020 Questionnaire responses reviewed and quality assurance check: The research team conducts several rounds of data quality assurance checks before finalising each questionnaire and the scoring.

October - November 2020 Data is compiled, analysis completed and report prepared: Data from each brand questionnaire is collated into one large complete dataset, which is used to analyse final results, determine yearon-year progress and pull out interesting findings. Brands are notified of their final scores and progress shortly before publication.

December 2020 The results of the report are published: on the Fashion Revolution website

www.fashionrevolution.org and on the Arlenica website

http://www.arlenica.org/indice_moda_MX20

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

HOW BRANDS AND RETAILERS ARE SELECTED The 20 brands and retailers have been chosen on the basis of their annual turnover, and representing a spread of market segments including high street, footwear and retailers with their own brands.According to their annual turnover, we classify three groups: the first made up of two brands with an average annual turnover of 7.7 billion dollars, the second made up of three brands with an average turnover of 1.5 billion dollars and the other 15 with an average annual turnover of 368 million dollars.14

We have chosen to list brand names in this report rather than by parent company or group because consumers will be most familiar with brand names. However, please note that for some of the brands that are part of a group, such as Liverpool and Suburbia Group, which are both subsidiaries of El Puerto de Liverpool, Verochi, Mariscal and Milano wich are subsidiaries of Famsa Group, Bamex Group and Kaltex Group respectively, their scores, in some cases reflect the information provided via the parent company website.

The brands that make up this index come mostly from national capitals, except C&A which has also been part of the global index with significant progress year after year in its levels of transparency which allows us to have a reference of what international brands are disclosing in comparison with Mexican and Levi`s brands whose selection criteria responds to the importance of the denim industry in our country.

This first year, 5% of brands participated by returning a completed questionnaire. We include brands in the Index regardless of whether they participate or not. However, brands that participate typically receive higher scores than they would otherwise because they are able to identify relevant disclosure that our researchers may have missed. We hope that the indexes to come will have a strong increase in brandsÂ´ participation. Just a quick note: we often use the term 'brands' as shorthand for both brands and retailers.

14. Information collected from Euromonitor and ExpansiĂłn, The turnovers reflect date form 2018, exchange rate used: 18.92 mexican pesos per dollar.

H OW M A N Y B R A N D S PA R T I C I PAT E D T H I S Y E A R ?

95%

did not respond

of brands completed and returned a questionnaire

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

THE 20 BRANDS SELECTED • Aldo Conti

• Liverpool

• Andrea

• Long Beach Polo Club

• C&A

• Mariscal

• Charly

• Milano

• Cklass

• Oggi

• Coppel

• Price Shoes

• El Palacio de Hierro

• Sears

• Flexi

• Suburbia

• Julio

• Verochi

• Levi Strauss de México

• Yale de México

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

THE FINAL SCORES To access the complete data set click here

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

A GUIDE TO THE SCORING 0—5%

6—10%

11—20%

21—30%

There are 250 total possible points. Final scores have been converted into percentages and rounded to the nearest whole number. Please focus on the range in which brands score rather than their individual scores as this gives you a more accurate picture of trends in transparency across the industry.

31—40%

41—50%

51—60%

61—70%

ABOVE

71%

TRANSPARENCY Brands that get a score of between 0 and 5% disclose no or very little information about policies that are often related to brands own practices for hiring workers, or local community engagement activities.

Brands with a score between 6 and 10% publish some policies, commitments and procedures on social and environmental issues for both their employees and their suppliers. Those closer to 10% are likely to publish a basic code of conduct and some detailed information on the approach to assessing suppliers.

Brands scoring between 11-20% are likely to be publishing many policies, some procedures and some information about their supplier assessment and remediation processes. These brands are unlikely to be publishing supplier lists and won’t be sharing much information, if anything, about our Spotlight Issues. No brand in the Index scores in this range.

Brands scoring between 21% and 30% are likely to be publishing much more detailed information about their policies, procedures, social and environmental goals and supplier assessment and remediation processes. These brands may be publishing a supplier list but with few details other than the facility name and address. The brands will not be sharing information about the outcomes of their supplier assessments or grievance channels. These brands will not widely be disclosing information on the Spotlight Issues but may touch upon a few. No brand in the Index scores in this range.

Brands scoring between 31% and 40% are the brands that are publishing lists of suppliers as well as detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes. These brands are also more likely to be disclosing information on a few of the Spotlight Issues such as gender pay gap, use of more sustainable materials, textile waste and their carbon emissions at company level. No brand in the Index scores in this range.

Brands scoring between 41% and 50% are those that are most likely to be publishing more detailed supplier lists. Many will be publishing processing facilities as well as manufacturers – in addition to detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes and some supplier assessment findings. These brands are also more likely to be addressing the Spotlight Issues such as gender equality, collective bargaining, use of more sustainable materials, textile waste, circularity, and their carbon and water footprint at company level. Only one brand in this Index falls in this range.

Brands scoring between 51% and 60% are disclosing all of the information already described in the other ranges and will be publishing more detailed lists of suppliers, from manufacturers to raw materials. They will be publishing some detailed information about the findings of their supplier assessments and tend to be addressing many of the Spotlight Issues such as forced labour, gender equality, use of more sustainable materials, textile waste, and their carbon and water footprint at company level and in the supply chain. No brand in this Index scored in this range.

Brands scoring between 61% and 70% are disclosing all of the information already described in other ranges and will be publishing detailed supplier lists, which include manufacturers as well as processing facilities and some suppliers of raw materials such as cotton or viscose. These brands will be sharing relatively more information than any other brands in the Index on the Spotlight Issues. In 2020, only one brand scored in this category.

No brands score above 71% but if they did these brands would be disclosing all of the information already described as well as publishing detailed information about supplier assessment and remediation findings for specific facilities. They would also be sharing detailed supplier lists for at least 95% of all suppliers from manufacturing right down to raw materials. These brands would be mapping social and environmental impacts into their financial business model and disclosing ample data on their use of sustainable materials and would provide sex-disaggregated data on job

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

THE FINAL SCORES 0—5%

6—10%

Coppel

Price Shoes

Verochi

Aldo Conti

Andrea

Charly

Cklass

Julio

Long Beach Polo Club

Mariscal

Oggi

Sears

Yale de México

11—20%

El Palacio de Hierro

Liverpool

Suburbia

Flexi

21—30%

31—40%

41—50% Levi Strauss Co

51—60%

61—70% C&A

* Brands ranked in numerical order by score out of 250, but shown as rounded-up percentage. Where brands have the same percentage score, they are listed in alphabetical order and grouped with others from same parent company

ABOVE

71%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

QUICK FINDINGS

NO. OF BRANDS

0-5

6-10

11-20

21-30

31-40

41-50

51-60

61-70

71-80

81-90

91-100

FINAL SCORE (%)

TRANSPARENCY

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX 2020 MEXICO 2020

THE FINAL SCORES ACROSS THE 5 SECTIONS

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

AVERAGE SCORES ACROSS THE SECTIONS 13% 1.

12% 2.

6% 3.

6% 4.

5% 5.

POLICY & COMMITMENTS

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

14 brands (70% of brands) scored in the lowest range in this section, 0-5%, meaning they disclose nothing, or next to nothing about their policies and procedures relating to their social and environmental impacts. While C&A and Levi’s scored 93% and 88% retrospectively, the top scoring Mexican brand was El Palacio de Hierro, who scored 26%.

Of the 20 brands assessed, 15 brands (75% of brands) do not publish any information in this section. C&A was the only brand to score 100% in this section, meanwhile the Mexican brands Liverpool and Suburbia both scored 33% in this section.

Only one Mexican brand publishes a list of their first tier manufacturers, Flexi, scoring 16%. Meanwhile, 17 brands (85% of brands) do not publish anything in this section.

90% of brands scored between 0 to 10% in this section, while 15 brands (75% of brands) do not publish any information in this section. El Palacio de Hierro was the highest scoring Mexican brand in this section, scoring 10%. The international brand C&A was the highest scoring brand (59%).

This is the section with the lowest average score this year, with 13 brands scoring zero and 18 brands scoring in the 0% to 10% range. The highest scoring Mexican brands were Suburbia and Liverpool, with 6%. In this section only the two international brands score above 30%, C&A (49%) and Levi’s (33%).

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

1. POLICY & COMMITMENTS APPROACH What human rights and environmental policies and procedures do major brands and retailers publicly disclose? In this section we reviewed what policies and procedures brands disclose both at company level (as related to the company’s own operations in head offices, stores, warehouses, and owned production facilities) and at supplier level (Code of Conduct or supplier guidance document).

We looked at the following issues:

Social and environmental priorities, including measurable, long-term goals

•

Animal Welfare

•

Harassment & Violence

•

Annual leave & Public Holidays

•

Health & Safety

•

Anti-bribery, Corruption & Presentation of False Information

•

Living Conditions/ Dormitories

•

Maternity Rights / Parental Leave

•

Biodiversity & Conservation

•

Child Labour

Notice Period, Dismissal & Disciplinary Action

•

Community Engagement

•

Overtime Pay

•

Contracts & Terms of Employment

•

Restricted Substances List

•

Discrimination

•

Diversity & Inclusion

Sub-contracting, Outsourcing & Homeworkers

•

Energy & Carbon Emissions

•

Equal Pay

•

Forced or Bonded Labour

Wages & Financial Benefits (e.g. bonuses, insurance, social security, pensions)

•

Foreign & Migrant Labour

•

Freedom of Association, Right to Organise & Collective Bargaining

•

Waste & Recycling (Packaging/Paper)

•

Water Effluents & Treatment

•

Water Usage & Footprint

•

Working Hours & Rest Breaks

We looked to see whether brands and retailers are disclosing their key human rights and environmental priorities (typically in the form of a materiality assessment). Some issues will be more relevant and timely for each brand, and we wanted to understand how they decide upon these priorities and what these priorities are. We also looked to see whether brands are publishing their goals or a strategic roadmap for improving social and environmental impacts across the value chain. We only counted these goals if they were time-bound, measurable and set for 2020 or later. We also awarded points if brands are reporting on annual progress towards achieving these goals.

Verified information Finally, we looked to see if the human rights and environmental data reported by brands is audited by an independent third party organisation, typically this is conducted by a large global accounting firm.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

1. POLICY & COMMITMENTS RESULTS 0—5%

6—10%

Coppel

Verochi

Cklass

Flexi

Milano

Price Shoes

Aldo Conti

Andrea

Charly

Julio

Long Beah Polo Club

Mariscal

Oggi

Sears

Yale de México

11—20%

21—30%

31—40%

El Palacio de Hierro

Liverpool

Suburbia

41—50%

51—60%

61—70% Levi´s

ABOVE C&A

71% 93

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

1. POLICY & COMMITMENTS FINDINGS H OW M A N Y B R A N D S D I S CLO S E T H E I R P O L I C I E S ?

Company policies

Animal Welfare

Waste & Recycling (Product/Textiles)

Restricted Substance List

Diversity & Inclusion

Provider policies Administrative procedures

2 8

Community Engagement Maternity Rights & Parental Leave

Biodiversity Annual Leave & Public Holidays

Foreign & Migrant Labour

Waste & Recycling (Packaging/Office/Retail)

Notice Period, Dismissal & Disciplinary Action

Energy & Carbon Emissions

Sub-contracting, Outsourcing & Homeworkers

Wages & Financial Benefits (e.g. bonuses, insurance, social security, pensions)

Working Hours & Rest Breaks

2 5

Anti-bribery, Corruption, & Presentation of False Information

Freedom of Association, Right to Organise & Collective Bargaining

3 3

Equal Pay

Water Effluents & Treatment

Overtime Pay

Contracts & Terms of Employment

Living Conditions/Dormitories

Water Usage & Footprint

4 2

Discrimination

Harassment & Abuse

Child Labour

Health & Safety Forced & Bonded Labour

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

1. POLICY & COMMITMENTS FINDINGS

Implementation of policies These charts indicate the difference between the number of brands that disclose their policies versus those that disclose how their policies are implemented. We consider this important because it speaks to the congruence (or lack thereof) between what brands say they care about and what they actually do.

I M P L E M E N TAT I O N O F P O L I C I E S

BIODIVERSITY & CONSERVATION

15%

20%

Publish a company policy

Disclose procedures that address this topic

DIVERSITY & INCLUSION

30%

Publish a company policy

Publish supplier policies

25%

Publish a company policy

COMMUNITY ENGAGEMENT

10%

Disclose procedures that address this topic

ENERGY AND CARBON EMISSIONS

15%

Disclose procedures that address this topic

25%

Publish a company policies

Disclose procedures that address this topic

40% Publish supplier policies

Publish a company policy

10%

Publish supplier policies

HARASSMENT AND VIOLENCE

25%

10%

Disclose procedures that address this topic

Publish a company policies

Disclose procedures that address this topic

(e.g. bonuses, insurance, social security, pensions)

10%

40%

10%

WAGES & FINANCIAL BENEFITS

CHILD LABOR

40%

DISCRIMINATION

10% Disclose procedures that address this topic

SUB-CONTRATING, OUTSOURCING & HOMEWORKERS

40%

Publish supplier policies

10%

Disclose procedures that address this topic

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

1. POLICY & COMMITMENTS ANALYSIS This section, which seeks to publicise the information that brands disclose about their environmental and human rights policies throughout their supply chain and how these policies are implemented, has the highest percentage in this index at 13%. 18 brands scored below 30% and only 5 brands scored above 10%. Of the Mexican brands, El Palacio de Hierro, shares the most information in this section with 26%, disclosing some of their social policies for their direct employees and their suppliers, including policies on discrimination, harassment and violence and health and safety. However, El Palacio de Hierro only publishes one policy on an environmental issue, biodiversity and conservation, but doesn’t describe how it puts this policy into action. Liverpool and Suburbia scored 17%, whilst 15 brands scored 5% or less; Coppel with 5%, Verochi with 4%, Cklass, Flexi and Milano with 2% and Price Shoes with 1%. The remaining 9 brands (45% of

brands), do not publish any information in this section. Only two brands score more than 30% in this section; The international brand C&A scored highest in this section with 93% followed by Levi’s with 88%. This means they are publishing the majority of the relevant social and environmental policies and procedures, as well as materiality assessment procedures and outcomes, and some social or environmental goals. It is worth mentioning that these international companies (C&A and Levi's), have published the translation of their Codes of Conduct in Spanish for the knowledge and dissemination of the workers who work in the factories that manufacture some of their inputs. The policy and procedure which was most frequently published by brands was Community Engagement, which refers to the activities or programs to engage and benefit the local communities where their own operations are based, 40% of brands publish this information.

15. Consejo Nacional de Evaluación de la Política de Desarrollo Social (CONEVAL). 16. Documento temático para el debate en el Foro de diálogo mundial sobre los salarios y el tiempo de trabajo en los sectores de los textiles,el vestido, el cuero y el calzado (Ginebra, 23-25 de septiembre de 2014), Departamento de Actividades Sectoriales. OIT.

30% of brands then described how they put this Community Engagement policy into action. However, only 2 brands (10%) publish a Community Engagement policy for their suppliers. 30% of brands publish a diversity and inclusion policy for their own operations with half of those brands (15%) disclosing some information on how they put these policies into practice. Anti-Bribery, Corruption and Presentation of False Information also scored a relatively high score for this section, with 25% of the brands publishing a company policy for this topic and also describing how they put this policy into action. With regard to information on environmental impacts, 25% of the brands share their policy on Energy and Carbon Emissions but only 2 brands (10%) describe how they are putting this policy into action to tackle the climate crisis. Meanwhile, only 3 brands describe how they are working to address Waste & Recycling (packaging, office or retail), their Water Usage and Footprint, and Biodiversity and Conservation. 80% of the brands in this Index did not publish any policies on labour rights,

such as holidays, employment contracts, wages and benefits, maternity/paternity rights, working hours, overtime and freedom of association, for employees or suppliers. These are issues that are in urgent need of transparency, after figures have revealed that Mexico is a country with a high level of precarious employment. 71.7 million people do not have access to social security, which is equivalent to 57.3% of the total population15 without the possibility of covering basic health needs and pensions for disability or old age. As with all previous editions of the global Index, brands tend to disclose more about their policies than they do about how they put those policies into action and the results of their efforts to address social and environmental issues.

According to the United Nations Industrial Development Organization (UNIDO), the global average wages in the clothing and textile sectors are, respectively, 35% and 24% lower than the average wage in manufacturing.16

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT:

THE CRITICAL STRUCTURE OF THE MEXICAN TEXTILE INDUSTRY

lose their jobs, to which some employers had take the view that: “those of you who don’t want to do it can go home”.19 BY DIGNIFICANDO EL TRABAJO AC HUMAN DIRECTION: MÓNICA ELIZABETH SALAZAR

According to Alejandra Martinez, General Secretary of the National Union of Sewing, Dressmaking, Clothing and Other Workers 19 de Septiembre (Sindicato Nacional de Trabajadores de la Industria de la Costura, Confección, Vestido, Similares y Conexos 19 de Septiembre), the 1985 earthquake “brought to the light the exploitation”17 under which female dressmakers and workers in the clothing industry in Mexico City lived. Not only did it shed light on their precarious working conditions, wages and excessively long working hours, but it also showed the fragility and instability of labour in the textile sector, in which many women were unable to feed their families because their incomes depended on their daily production. Shortly after the earthquake, many of them, “with or without fear”18 went back to work under high-risk conditions so they would not

Workers in the textile industry are now raising similar concerns as a result of the COVID-19 pandemic, reiterating concerns that had been highlighted some thirty years earlier by their colleagues during the earthquake: wage reductions and massive layoffs despite increased demand for production. These conditions are accepted because workers often report feeling “hand-tied because they [are] afraid”20 of unemployment and the volatility of their jobs: “if it’s no use to you, leave, there are many others”.21 In that sense, the National Statistics and Geography Institute (INEGI)22 shows that, in June 2020 and in comparison with the same month of the previous year, the number of workers hired in clothing manufacturing, as well as their average wages in the same subsector decreased by 13.7% and 12.9%, respectively. Both experiences, the 1985 earthquake and the 2020 COVID-19 pandemic, highlight the difficult conditions under

which workers manufacture clothing, textile products and raw materials – workers come in second place in the organization of the productive apparatus. Additionally, these incidents show that working conditions frequently worsen during emergencies and other critical circumstances, in particular weakening the most unstable and neglected links in the supply chain. As a consequence, it is important to highlight that the textile industry contains both formal and informal manufacturing spaces, which interact

in ways that must be clarified more deeply, mainly at the local and regional levels, so that we can understand what are the factors that contribute to the continuation of poor working conditions and violations of human and labour rights in the Mexican textile industry. The relationship between formal and informal manufacturers must be observed and attended to, not stigmatised or criminalised by the State, the private sector, civil organisations and consumers, so that we can accelerate the transformation of the critical structure of the Mexican textile industry.

17. Muñoz, Patricia. La situación laboral de costureras mexicanas, igual que hace 30 años [The Labor Situation of Mexican Dressmakers, The Same as 30 Years Ago]. La jornada. Available in: https://www.jornada.com.mx/2015/05/25/sociedad/036n1soc [in Spanish] 18. Channel Eleven (1985). A una semana del sismo de 1985 en la Ciudad de México, Cristina Pacheco platica con las costureras sobre la situación en la que laboran [One week after the 1985 earthquake in Mexico City, Cristina Pacheco talks to female dressmakers on the situation in which they work]. Television program (minute 24.08). Available in: https://www.youtube.com/watch?v=HQoF2g72VFw&feature=youtu.be 19. Ibidem (minute 22.37). 20. Representative of workers in the cross-sector work session Bordando Alianzas. October 8, 2020. 21. Ibidem. 22. INEGI (2020). PRESS RELEASE NO. 397/20. INDICADORES DEL SECTOR MANUFACTURERO CIFRAS DURANTE JUNIO DE 2020 [INDICATORS IN THE MANUFACTURE SECTOR, FIGURES FROM JUNE 2020]. Available in: https://www.inegi.org.mx/contenidos/saladeprensa/boletines/2020/emim/emim2020_08.pdf [in Spanish]

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

2. GOVERNANCE APPROACH

“The relationship between the international brand and the local supplier is one of the most delocalised sectors in its productive

Who in the company is responsible for social and environmental impacts?

Employee, executive and supplier incentives for improving performance

In this section, we wanted to understand who in the company is accountable for social and environmental performance and impacts.

We looked to see if brands are disclosing how their employees beyond the sustainability/CSR team (designers, buyers, sourcing managers, etc.) are incentivised (via performance reviews or bonuses) to achieve improvements in social and environmental impacts.

First, we looked to see if brands publish direct contact details for a relevant department, such as the sustainability or corporate responsibility team. Then, we looked to see if they share the direct contact details for the individual(s) with lead responsibility for social and environmental impacts. This enables the public to get in touch with questions and queries. We also looked for the name of a board member who is responsible for social and environmental issues and how this oversight is implemented.

We looked for the same information to be shared linking CEO and executive level pay and incentives to human right impacts and environmental management. Finally, we also looked to see if suppliers’ incentives are linked to improvements in human rights impacts and environmental management. The types of incentives we were looking for included brands committing to longterm contracts, increased order size, price premiums and fewer audits.

process and this, with the Pandemic, is putting itself at the limit of tensions. This is where the creative solutions that we can develop can be directed towards a new economy, not returning to the old, but to something better, the issue of incorporating not only in the discourse but also in the practices of corporate governance the perspective of human labour rights is indispensable”.

Rodrigo Olvera Human Rights Defender and Member of the Organization, Maquila Solidarity Network.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

2. GOVERNANCE GENERAL SCORES 0—5%

6—10%

Aldo Conti

Andrea

Charly

Cklass

Coppel

Flexi

Julio

Long Beach Polo Club

Mariscal

Milano

Oggi

Price Shoes

Sears

Verochi

Yale de Mexico

11—20% El Palacio de Hierro

21—30% 17

31—40%

41—50%

Liverpool

Suburbia

Levi´s

51—60%

61—70%

ABOVE C&A

71% 100

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

2. GOVERNANCE FINDINGS

The graphs presented show the depth of information presented by the brands on issues related to their Governance.

HOW EASILY THAT YOU CAN CONTACT A BRAND

BOARD LEVEL ACCOUNTABILITY

20%

15%

Publish direct contact details of the sustainability or corporate responsibility team

Disclose the direct contact details of the person with lead responsibility for human rights and environmental impacts in the business

10%

Disclose who on the board holds responsibility for the companyâ&#x20AC;&#x2122;s human rights and environmental impacts

ARE INCENTIVES TIED TO SOCIAL AND ENVIRONMENTAL PROGRESS?

10%

Explain how employee incentives (pay and bonuses) are tied to improvements in social and environmental impacts

Explain how executive level incentives (pay and bonuses) are tied to improvements in social and environmental impacts

Explain how suppliers are rewarded for improvements in working conditions and environmental management (increased orders, longer contracts, fewer audits)

10%

Publish a description of how board level accountability is implemented

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

2. GOVERNANCE ANALYSIS Of the 20 brands assessed, 15 brands (75% of brands) do not publish any information in this section and score zero. The highest scoring Mexican brands in this section were Liverpool and Suburbia with 33%, who published contact details for a relevant sustainability department and the person with lead responsibility for human rights and environmental impacts. They were followed by El Palacio de Hierro, scoring 17%, who also published contact details for a relevant sustainability department. According to the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance: "Corporate governance encompasses a set of relationships between a company's management, its board, its shareholders and other stakeholders". Good governance helps to identify and manage risks; and to visualise, plan, direct, execute, control and improve processes to pursue a company's objectives while ensuring sustainability and transparency to increase levels of consumer confidence and perception.

4 brands (20%), El Palacio de Hierro, Liverpool, Suburbia and C&A, disclose the contact information for the sustainability/ CSR department, which allows anyone to get in touch with the company about any sustainability issues. 5% of brands, meaning one brand discloses the description of how supplier incentives are linked to improvements in good labour practices and environmental management (e.g. long-term purchase and sale commitments, longer contracts, more orders, price premiums, less audits) and 10% disclose how payments, bonuses or performance evaluations of executive levels (e.g. Executive Management, Finance Management, Presidency) are linked to good labour practices and environmental issues. C&A is the only brand that scores 100% in this section, meaning they disclose contact details for the relevant department and individual responsible for sustainability issues in the company, as well as information about accountability and incentives from board level, employees and suppliers. Textile workshop, Grupo Jolob of San Andrés Larrainzar, Chiapas © Efraín P. Miranda

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT:

THE FASHION INDUSTRY: A NECESSARY ALLY OF SUSTAINABLE DEVELOPMENT

BY ANNABELLE SULMONT COORDINATOR OF THE PROJECT PUBLIC POLICIES WITH A FOCUS ON HUMAN DEVELOPMENT AND INCLUSION OF THE UNITED NATIONS DEVELOPMENT PROGRAMME IN MEXICO, UNDP

Placing the fashion industry at the core of debates about the challenges of development became not only relevant but extremely urgent by the end of 2020.

It is well-known that this industry is responsible for approximately 10% of carbon emissions and is the second highest consumer of water and producer of waste around the world23. While it constitutes the second source of employment around the world24, its workers continue to face low wages and dangerous working conditions. From the perspective of the UN Sustainable Development Goals, the fashion industry could have a leading cross-dimensional role in the path towards their achievement since it impacts three dimensions of sustainable development: social, economic and environmental. This industry has an opportunity to make specific and transforming commitments related to Gender Equality (SDG 5), Industry,

23. Hecho X nosotros, 2020. 24. Ibidem. 25. COVID-19 and the world of work: Impact and policy, ILO Monitor First Edition 18 March 2020 responses: https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/briefingnote/wcms_738753.pdf

26. Ibidem. 27. McKinsey: The State of Fashion 2020 - Coronavirus Update.

Innovation and Infrastructure (SDG 9), as well as to Sustainable Production and Consumption (SDG 12) and Terrestrial Ecosystems (SDG 15) because of the role it has in the lives of everyone and the extent of its impacts. The crisis resulting from the COVID-19 pandemic that swiped the world this year did not leave the fashion industry unscathed. On the contrary, the jolt it received equals its power. Recent forecasts indicate that the pandemic may cause an increase in global unemployment of up to 24.7 million people25. Additionally, small and medium enterprises, which represent a vital source of employment and growth in the garment and footwear industry, will probably receive the greatest impact in the midst of this global crisis26. Likewise, it is estimated that the incomes in the

fashion industry will shrink between 27-30% in 2020 when compared to the previous year.27 There is an increasing interest in circular commercial models, such as renting, thrifting and repairing, and the acquisition of more ecological and socially sustainable clothing. In mirror to this, there are increasing warnings of the weakening of the industry as it currently functions. For the development of the people employed in the sector, the economy of societies and the preservation of the ecosystem, it is essential that the fashion industry continues to generate value but sustainable value. More than ever, the current situation is showing us the way to change.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

3. TRACEABILITY APPROACH Are major brands and retailers publishing lists of their suppliers and how detailed is this information? This section focused on whether brands are publishing lists of their suppliers and what level of detail brands are disclosing about these suppliers.

Are brands sharing information such as: •

The address of the facility

•

The types of products/services made in each supplier facility

•

Approximate number of workers

•

Sex-disaggregated breakdown of workers at each site

•

If the facility has a trade union

•

If the facility has an independent worker committee

•

% of migrant or contract workers

•

Name of parent company

•

The business relationship between facilities at different levels of their supply chain

•

If the list is available as a csv or Excel spreadsheet

•

If the list was updated within the past 6 months

Textile workshop, Grupo Jolob of San Andrés Larrainzar, Chiapas © Efraín P. Miranda

Disclosing factories, processing facilities and raw material suppliers We looked for supplier lists at three levels: First, are brands disclosing the factories where their clothes are made — e.g. the facilities with which brands have a direct relationship and typically do the cutting, sewing and final trims of products? Second, are brands disclosing processing facilities further down the supply chain — e.g. from ginning and spinning, through to subcontractors, wet processing, embroidering, printing, finishing, dyehouses, laundries, and so on? And finally, are brands disclosing their suppliers of raw materials — e.g. primary materials such as fibres, hides, rubber, dyes, metals and so on? We also checked if brands disclose information about tracing at least one raw material supply chain such as leather, cotton, down or wool.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

3. TRACEABILITY SCORES 0—5%

6—10%

Aldo Conti

Andrea

Charly

Cklass

Coppel

El Palacio de Hierro

Julio

Liverpool

Long Beach Polo Club

Mariscal

Milano

Oggi

Price Shoes

Sears

Suburbia

Verochi

Yale de Mexico

11—20% Flexi

21—30% 16

31—40% Levi´s

41—50% 38

51—60%

61—70% C&A

ABOVE

71%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

3. TRACEABILITY FINDINGS D I S C LO S I N G F I R S T T I E R M A N U FAC T U R E R D E TA I L S

15%

10%

Brands are publishing tier 1 supplier lists

Include the facility address

Include the types of products made / services provided in the facility

Include the approximate number of workers at each site

P R O C E S S I N G FAC I L I T I E S

0% Includes a gender breakdown of workers

0% Include whether the factory has a trade union

R AW M AT E R I A L S U P P L I E R S

10%

Publish processing facilities beyond the first tier

Type of products or services

Include the gender breakdown of workers

Publish some of their raw material suppliers

5% Have update this list within the past 12 months

10% Mapping at least one raw material supply chain

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

3. TRACEABILITY ANALYSIS As Jenny Holdcroft, the Assistant General Secretary of IndustriALL Global Union, explained in previous editions of this report:

“Knowing the names of major buyers from factories gives workers and their unions a stronger leverage, crucial for a timely solution when resolving conflicts, whether it be refusal to recognise the union, or unlawful sackings for demanding their rights. It also provides the possibility to create a link from the worker back to the customer and possibly media to bring attention to their issues.”

The highest scoring brands in this section were once again the international brands, C&A and Levi's, with 68% and 38% respectively. C&A, shares supplier lists at the first tier and beyond, as well as publishing its suppliers for their viscose. Levi’s publishes supplier lists for the first tier and beyond, without specifying data on the workforce of its suppliers. Notably, the only Mexican brand to publish any information in this section was Flexi, scoring 16%, who shared their first tier supplier list.The remaining 17 brands (85% of brands) do not publish anything in this section. According to the United Nations, the only way to ensure an industry that is responsible for its implications and externalities and that truly contributes to the care of the environment and promotes and guarantees human rights is to establish regimes in the sector that promote traceability.28

28. 10 UNECE, Traceability for Sustainable Garment and Footwear, http://www.unece.org/tradewelcome/traceability-for-sustainable-garment-and-footwear.html

Why traceability? According to the analysis, for more than 65% of companies, traceability helps 1.

For this reason, the Traceability section has the highest weighting of any section, with 79 points available.

Tier 1 suppliers

build trust with consumers;

2. develop more solid networks with clients and suppliers; 3. identify opportunities for efficient and sustainable management of resources. And while key challenges lie in the fragmentation of the value chain and data security, technological advances (e.g. blockchain, bar codes, chips) can play an important role. UNECE (https://www.unece.org/info/ ece-homepage)

The first tier manufacturers are the suppliers who do the cutting, sewing and finishing of garments in the final stage of production. They are also the supplier that brands have a direct sourcing relationship with, usually allowing more visibility and leverage. This year, we found that 3 brands (15%) are publishing their first tier manufacturers, and they all include the name of the facility, address, types of products or services provided. Notably, the only Mexican brand to publish this information was Flexi, scoring 16% in this section, also published the name of the parent company for each facility alongside the supplier list.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

3. TRACEABILITY ANALYSIS Only the international brands, which represent 10% of the samples considered in the Index, indicate the detail of the approximate number of workers in each facility of their first level suppliers and whether their list of suppliers has been updated in the last 6 months. 85% of the brands scored zero, with no evidence of traceability information in their supply chain.

Raw material suppliers. These suppliers are those that provide brands and their manufacturers further down the chain with raw materials such as fibres, hides, rubber, dyes, metals and so on. Only one brand, C&A, discloses the name, address and type of products it purchases from some of its raw materials suppliers, in this case their viscose suppliers.

Disclosure of processing facilities. Processing facilities are those that typically deal with the ginning and spinning, knitting and weaving. They could also be sub-contractors who offer dying and wet processing services or tanneries, embroidering and printing. 10% of the brands disclose processing facilities name and address, and only one brand (C&A) discloses the type of service or product the facilities offer, as well as the number of workers. No brands publish the gender breakdown or whether facilities have a trade union.

Project Landfeel ÂŠ Maria Acevedo

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT:

FASHION: AN OVERVIEW FROM THE SOCIAL RESPONSIBILITY PERSPECTIVE

BY DR. HUMBERTO MUÑOZ GRANDÉ DIRECTOR OF THE PHD IN CORPORATE SOCIAL RESPONSIBILITY, ANÁHUAC UNIVERSITY

The fashion industry can be analysed from different standpoints. First, as a transcendental contribution to the culture and identity of societies; second, as a relevant contribution to job creation and national wealth. Yet, it also has many externalities, including social and environmental impacts. Various studies have shown that the fashion industry is characterised by poor working conditions, child labour, low wages and health risks all around the world. Research also shows that the fashion industry has high levels of water consumption, dangerous pesticide use in cotton plantations and generates polluting microfibre particles during washing cycles.

“The Fashion Transparency Index Mexico 2020 – a result of an alliance of experts, academics and activists – constitutes an invaluable contribution so that, through transparency, brands and companies can identify short-term improvements that impact their financial profitability while improving social impacts in their value chains and the eco-efficiency of the natural capital used”.

Nevertheless, some business models are beginning to change with the incorporation of the social responsibility perspective as a powerful tool that guides companies towards more sustainable development. The purpose is to achieve change that provides workers throughout the industry value chain better working conditions and a better quality of life. This also helps drive change towards more regenerative development; for example, by providing information for responsible consumption, clothing collection programs, use of recyclable materials to manufacture clothing, reutilisation of natural fabrics, use of sustainable cotton as well as other innovations of biotechnology applied to natural raw materials and nanotechnology in the manufacturing process. Thus, social responsibility is an instrumental ally that allows the integration of three perspectives into the DNA of brands and companies: 1) greater transparency on their social and environmental policies, practices

and commitments so that they in turn serve as shared learning and a tool for increased accountability; 2) awareness and internalisation of the positive and negative impacts of business models at social, economic and environmental levels, and 3) tracing and taking steps to minimise these effects among the different groups of interest throughout the supply and value chains of this industry. This is how the Fashion Transparency Index Mexico 2020 – a result of an alliance of experts, academics and activists – constitutes an invaluable contribution so that, through transparency, brands and companies can identify short-term improvements that impact their financial profitability while improving social impacts in their value chains and the eco-efficiency of the natural capital used.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

4. KNOW, SHOW & FIX APPROACH What do major brands and retailers communicate about their human rights and environmental due diligence processes? How are they assessing suppliers’ adherence to their standards?

We awarded points if brands disclose information such as: • How the brand works to identify and address human rights and environmental risks, impacts and violations in its supply chain (its approach to conducting due diligence)

• The process for taking on new suppliers

• How workers, unions and other affected stakeholders are involved in the due diligence process

• If brands conduct supplier assessments beyond the first tier

• How suppliers are assessed against the brand’s policies

• How frequently assessments are conducted (e.g every 12 months)

• If supplier assessments include off site worker interviews, and if so how many workers are interviewed

KNOW We included indicators on human rights and environmental due diligence to understand what steps brands are taking to identify human rights and environmental risks, impacts and violations in their supply chains. We also looked for information on how brands assess suppliers to ensure they meet their ethical standards and policies (typically factory audits) and which third party auditing standards used.

SHOW We looked at whether brands are disclosing the results of their supplier assessments, either as a summary of issues found in factories or at a more granular level (e.g. disclosing findings by individual factory).

FIX Finally, we looked at what brands are publishing about how they remediate human rights and environmental violations occurring within their supply chain. We also checked to see if brands publish a confidential grievance mechanism for both employees and workers in the supply chain. And finally, we looked to see if brands disclose the results of their efforts to remediate violations and address grievances.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

4. KNOW, SHOW & FIX GENERAL SCORES 0—5%

6—10%

Liverpool

Suburbia

Aldo Conti

Andrea

Charly

Cklass

Coppel

Flexi

Julio

Long Beach Polo Club

Mariscal

Milano

Oggi

Price Shoes

Sears

Verochi

Yale de Mexico

11—20% El Palacio de Hierro

21—30% 10

31—40%

41—50% Levi´s

51—60% C&A

61—70%

ABOVE

71%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

4. KNOW, SHOW & FIX FINDINGS K N OW: S U P P L I E R AS S E S S M E N T S

K N OW: D U E D I L I G E N C E P R O C E S S E S

10%

Disclose the approach to human rights and environmental due diligence

Explain how affected stakeholders are involved in due diligence

10% Report what risks are identified and prioritised

S H OW: P U B L I S H I N G AU D I T R E S U LT S

10% Disclose aggregated first tier supplier audit findings

10% Publish selected audit findings by named first tier supplier facility

15%

10%

Disclose process for assessing conditions in supplier facilities

Disclose the third-party audit standard(s) used

Report conducting supplier assessments beyond the first tier

F I X : R E M E D I AT I N G I S S U E SÂ

0% Publish full audit findings by named first tier supplier facility

10%

20%

Disclose the process for supplier remediation

Publish a confidential grievance mechanism for supply chain workers

Publish data about the number of grievances filed, addressed and resolved in the supply chain

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

4. KNOW, SHOW & FIX ANALYSIS 90% of brands scored between 0 to 10% in this section, providing very little or no information about their supply chain due diligence, supplier assessments and remediation processes. Only one brand (C&A) scored above 50%, scoring 59%, the second highest scoring brand was Levi's with 43%. With a percentage of 10%, El Palacio de Hierro was the highest scoring Mexican brand, disclosing information on the description of its supplier assessments, publishing their grievance mechanism and how it is implemented for its own employees and suppliers. Liverpool and Suburbia follow with 3% by publishing their grievance mechanisms for both employees and suppliers. The remaining 15 brands (75% of brands) do not publish any information in this section, providing no information about their due diligence process, supplier assessments, remediation processes or grievance mechanisms. Some brands share information about their supplier assessments, typically audits. However, they still share little information about the results of these efforts, and what they do when noncompliances are identified within their supply chains.

Know:

Show:

Fix:

Due diligence is the process by which companies identify, prevent, mitigate and correct their actual and potential adverse impacts. Due diligence can be included in business risk management systems, as long as it goes beyond that and includes issues that arise in your supply chain. Only 2 brands (10%) in this Index disclose their due diligence approach to identify human rights and environmental risks, impacts and violations in its supply chain. Meanwhile, just one brand discloses the outcomes or results of the steps the company has taken to cease, prevent, mitigate and remedy these human rights and environmental risks, impacts and violations.

90% of brands disclose absolutely no information about the results of their supplier assessments in this subsection. Only two brands, C&A and Leviâ&#x20AC;&#x2122;s, publish summaries of the results of the supplier assessments at both their suppliers' factories and processing facilities. These two brands also publish select audit findings, through participation in the Bangladesh Accord.

With slightly better results, 25% of brands, C&A, El Palacio de Hierro, Leviâ&#x20AC;&#x2122;s, Liverpool and Suburbia, discloses how the company ensures human rights and environmental grievances from employees and workers are lodged and addressed. Meanwhile only 4 brands disclose a grievance mechanism for suppliers, including three Mexican companies - Liverpool, Palacio de Hierro and Suburbia. However, only 10% publish how the company responds to complaints and/or violations of the policies and standards reported for suppliers.

Only 15% of brands and retailers disclose the description of their assessment process (typically audits) at facility level with El Palacio de Hierro being the only Mexican brand to make this information public.

The Bangladesh Accord on Building and Fire Safety, has inspected and upgraded thousands of factories since the Rana Plaza collapse in 2013. On the Bangladesh Accord website, anyone can find inspection reports on building integrity and fire safety for specific factories. Then, if someone really wanted to take the time to investigate, for brands that are publishing suppliers lists, you could cross-reference their list and the inspection reports on the Accord website to see how their specific factories are performing.

A grievance mechanism is a formal complaint process that can be used by workers, communities and/or civil society organizations who are adversely affected by certain business activities and operations. Thanks to the entry into force of the General Law of Administrative Responsibilities (LGRA) in 2017, Mexico is positioning itself as one of the countries seeking to implement whistleblowing as a mechanism to curb acts of corruption and other unethical behaviour, as part of the system of business integrity.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT: IMPROVING THE SITUATION OF WOMEN WHO WORK IN THE TEXTILE INDUSTRY: AN OBLIGATION FOR MEXICAN COMPANIES

BY LORENA CORTÉS ARLENICA´S EXECUTIVE DIRECTOR

In 1909, New York saw the uprising of the Shirtwaist Strike, in which women who worked in the clothing industry – mainly European immigrants – protested against their working conditions. The strike ended one year later with little results, but in 1911 a fire in the premises of the Triangle Shirtwaist Company in New York killed 145 workers (mainly women) putting into evidence the poor conditions in which women work. This is just one historical example of a situation in which natural or humancaused disasters evidence the working conditions of the people who make our clothes around the world. In Mexico, this became evident with the collapse of the garment factories located in Mexico City’s center in the earthquakes of September 19, 1985 and 2017.

At a global scale, one event acted as the watershed moment regarding the working conditions of women in the industry: the Rana Plaza factory collapse in April 2013, which evidenced several issues that are now being made visible and discussed through tools like the Fashion Transparency Index: 1.

The majority of workers employed in the global garment industry are women and they work in spaces that do not provide decent conditions and even may indicate situations of forced labour such as not being allowed to step outside and take a break.

This sector has not invested enough in the promotion and surveillance of human and labour rights of the industry workers.

There is no traceability system in place that is efficient enough so that big brands and retailers are responsible for the working conditions all throughout the supply chain of the industry.

These points are observed at, both, global and local scales. According to the National Institute of Statistics and Geography (INEGI, because of its initials in Spanish) and the National Chamber of Clothing Industry (CANAIVE, because of its initials in Spanish), in Mexico women represent 60% of the workforce in garment manufacturing, in comparison with the 35% they represent in the manufacturing industry in general.29 Additionally, this does not take into account the links in the chain that are related to the design of clothing, the production of supplies and commercialization, among other activities, so, most probably, the percentage of female participation is a lot higher.

29. INEGI and Canaive (2019), Colección de estudios sectoriales y regionales Conociendo la Industrias del vestido [Collection of sector and regional studies. Knowing the clothing industry]. Mexico

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

It is well-known that the gender violence situation that women in the country face has been made visible and scaled in recent years. As it can be observed in the chart below – the rate of crimes committed against women and femicides is increasing vertiginously, being 2020 one of the most violent years in this regard.

PERCENTAGE OF CRIMES IN TERMS OF THE AFFECTED LEGAL RIGHT January - October 2020 Legal right: patrimony

47.17%

Legal right: family

13.89%

Other legal rights affected30

12.78%

Other ordinary jurisdiction crimes31

8.60% 7.89%

Malicious injuries Others against society and life and physical integrity Legal right: sexual freedom and security Intentional homicide

3.95% 2.97% 1.58%

Legal right: personal freedom

1.10%

Femicide

0.05%

Human Trafficking

0.03%

1,532,606 total crimes

As per the violence suffered by women in the workplace, according to the INEGI, “45 out of 100 women have been victims of some kind of violence in their workplace, mainly emotional, sexual and discriminatory ones”.32 Given the situation, it is evident that work centers have the obligation to take immediate actions so as to guarantee decent and safe conditions for women.

It is clear that the textile industry is mainly occupied by women, for which companies should put more effort into guaranteeing this situation and demanding from their suppliers the same conditions for all female workers involved in their supply chain. Still, the Fashion Transparency Index Mexico 2020 shows that the brands that were analysed pay little attention to giving transparency to the policies and actions they implement on gender issues. For example, from the 20 companies that were reviewed, only one provided information about the gender pay gap and it was a foreign company. None of the companies provided public information regarding violations of labour rights in the premises of their suppliers. It is urgent that the main brands in the fashion industry of our country take strong actions to disclose information regarding the protection of their female collaborators and that they demand the same conditions of their suppliers. These companies can and should act as strategic agents of change to improve the working conditions of thousands of Mexican women who work in the sector. Collective Innovation Cooperative of San Cristobal de las Casas, Chiapas © Efraín P. Miranda

30. It includes crimes that are not classified under a specific legal right in the Technical Standard for the National Classification of Crimes of the National Geography and Statistics Institute of Mexico (INEGI); specifically: small-scale drug dealing, threats; breaking and entering; escape of prisioners; forgery; misinformation; crimes against the environment; public and electoral officers liability. 31. It refers to crimes that are not dissagregated (or identified) in the Technical Standard of the INEGI. Source: SESNSP-CNI, with information reported by Prosecutors or District Attorney Offices from the 32 federal states. 32. INEGI, “Estadísticas a propósito del Día internacional de la Eliminación de la Violencia contra la Mujer (25 de noviembre)” / Datos Nacionales [Statistics in the framework of the International Day for the Elimination of Violence against Women, November 25 / National Data], Press Release No. 592/19, November 21 2019.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHT ISSUES APROACH Each year, we explore a few key issues in deeper detail. For 2020, our focus covers four strategic areas we call the 4 C’s: conditions, consumption, composition and climate. These topics are selected and indicators formulated in consultation with industry experts. We have also designed the indicators to align with and support the United Nations’ Sustainable Development Goals (SDGs), which aims to bring nations together to build a better world for people and our planet by 2030.

Specifically, we looked at: •

Forced and bonded labour, including supply chain recruitment practices

•

Living wages and wage data in the supply chain

•

• •

Purchasing practices and what brands are doing to be good business partners to their suppliers Unionisation and collective bargaining Gender equality and equal pay both in the company and in the supply chain

What are major brands and retailers doing to address overproduction, minimise waste and move towards circularity? Here we looked specifically at: • •

How many items were produced in the reporting period How much textile waste is generated and how much of this was destroyed or recycled

•

Strategies and progress on reducing pre-consumer waste and recycling post-consumer waste

COMPOSITION

CONDITIONS What are major brands and retailers doing to improve conditions for workers within the company and their supply chains?

CONSUMPTION

In addition, for the Mexican index, our Advisory Committee composed of various experts in the industry, collaborated in the analysis and proposals of indicators for Mexico. Based on their knowledge of the national industry and the specific issues we face in Mexico, we also included indicators in this section covering the following: • Employee health and well-being (mental health, life skills training, provision of nutritious meals, support with childcare, flexible working hours) • Development and training of new talent • Collaboration with multi-stakeholder initiatives such as chambers or business associations • Labour certifications

What are major brands and retailers doing to increase the use of sustainable materials and reduce the use of virgin plastics and hazardous chemicals? We looked at: • • • • •

Strategies and progress on the switch to more sustainable materials Strategies and progress on the reduction of the use of virgin plastics What the brand is doing to minimise the impact of microfibres Investments in textile-to-textile circular recycling Strategies and progress on the reduction of the use of hazardous chemicals

CLIMATE Are major brands and retailers taking urgent action to combat climate breakdown and move towards sustainable management of natural resources? Here we looked at whether brands: • • • •

Publish Science Based Targets Publish a commitment to deforestation Publish carbon footprint in owned facilities and in the supply chain Disclose the amount of renewable energy used in owned facilities and in the supply chain

• •

Publish water footprint in owned facilities and in the supply chain Link environmental impacts to the business bottom line

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHTS: GENERAL SCORES 0—5%

6—10%

El Palacio de Hierro

Flexi

Price Shoes

Aldo Conti

Andrea

Charly

Cklass

Coppel

Julio

Long Beach Polo Club

Mariscal

Milano

Oggi

Sears

Verochi

Yale de México

11—20%

Liverpool

Suburbia

21—30%

31—40% Levi´s

41—50% 33

C&A

51—60%

61—70%

ABOVE

71%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHT FINDINGS EMPLOYEE DEVELOPMENT AND WELLBEING

L I V I N G WAG E S

20%

15%

Publishes information about programmes or activities focused on employee health and wellbeing

Publishes information about employee career development programmes or activities focused on helping employees gain skills, move into more senior positions and increase their wages

Disclose talent development programme or activities focused on providing career opportunities to young people such as internships, mentorships in schools and universities and recent graduate schemes

Disclose approach to achieving living wages for supply chain workers

Disclose annual progress towards paying living wages

% above the minimum wage workers are paid in the brandâ&#x20AC;&#x2122;s supply chain

P U R C H AS I N G P R AC T I C E S

GENDER EQUALITY

20%

15%

Publish the companyâ&#x20AC;&#x2122;s gender pay gap

Disclose how women workers are involved in the due diligence process

Publish data on gender-based violations in supplier facilities

Disclose method for isolating labour costs from price negotiations

Publish policy to pay suppliers within 60 days

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHT FINDINGS UNIONISATION

MODERN SLAVERY

MULTI-STAKEHOLDER COLLABORATION AND CERTIFICATION

10%

Disclose number of supplier facilities that have trade unions

Disclose number of workers covered by collective bargaining agreements

Disclose approach to recruitment fees in the supply chain

Publish data on modern slavery related violations in supplier facilities

Discloses membership of a relevant national business association(s) or multi-stakeholder initiative

Discloses evidence of labour certification from a relevant chamber or industry

WASTE & RECYCLING

0% Publish the amount of textile waste generated in the annual reporting period

PLASTICS

10% Report investing in textile-to-textile recycling solutions

HAZARDOUS CHEMICALS

10% Publish time-bound commitment to eliminate hazardous chemicals

SUSTAINABLE MATERIALS

10%

Explain what the brand is doing to minimise microfibres

Publish measurable progress towards reducing the use of virgin plastics

Publish time-bound, measurable sustainable materials strategy

Disclose progress on achieving sustainable material targets

CARBON EMISSIONS

10% Disclose progress towards this achieving commitment

WATER USE

10%

Publish annual carbon footprint in company own facilities

Publish carbon footprint in company’s supply chain

Publish annual water footprint in company’s own facilities

Publish annual water footprint at raw material level

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHT ANALYSIS This is the section with the lowest average score this year, with 13 brands scoring zero and 18 brands scoring in the 0% to 10% range. This means that they publish little or no information related to their working conditions, gender equality, living wages and purchasing practices. In addition, they lack information on how brands address issues related to waste, consumption and circularity, and sustainable materials, plastics, and chemicals and carbon and water footprint and how they are working to tackle the climate crisis. We see very significant disparities when comparing the percentages obtained by the International brands and the Mexican brands, which represent 90% of the total brands in the index, and are all in the lowest range. In this section only the two international brands score above 30%, C&A (49%) and Leviâ&#x20AC;&#x2122;s (33%).

COVID - 19 has affected the manufacturing sector. It estimated that more than 800,000 jobs will have been lost by the end of 2020

33. Clean Clothes Campaign 2020 https://cleanclothes.org/file-repository/underpaid-in-the-pandemic.pdf/view

CONDITIONS In this first year of the Fashion Transparency Index in Mexico the industry is in the midst of an unprecedented situation due to the pandemic generated by the COVID-19 virus. The temporary closure of a large part of the global and local economic activity strongly impacted all sectors that make up the fashion industry. Although there is not yet evidence of the severity of the impacts on Mexican brands, and their value chains; we found that it directly impacted our ability to engage brands within our research process as brand representatives were preoccupied or furloughed. Whereas, both the global and the Brazil Indexes found that yearon-year participation in the Fashion Transparency Index is influencing brands to disclose more social and environmental information.

The repercussions of the pandemic are still being felt across the global fashion value chain with workers around the world still owed between 3.19 and 5.78 billion USD according to a recent report from the Clean Clothes Campaign.33 Millions of workers are still without wages owed and compensation for dismissal, while the factories and facilities that remain open face difficulties in complying with social distancing measures, risking the health of workers who have little option but to work anyway to survive. In Mexico, the COVID-19 has affected a sector which, in itself, represents 2% of the Gross Domestic Product (GDP) of the manufacturing sector. It is estimated that more than 800,000 jobs will have been lost by the end of 2020, and although that percentage does not include exact figures for the fashion industry, the short and medium-term consequences of this crisis will be felt by all.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

Since the Covid-19 pandemic disrupted global garment supply chains, as brand and buyers abruptly – and retroactively – canceled orders with little to no warning, suppliers and workers’ rights organizations have been highlighting the current imbalance within purchasing practices and brand and supplier contracts. We found that only 1 brand (C&A) discloses the company’s approach to achieving the payment of living wages and reports on annual progress towards paying living wages to workers in their supply chain. C&A was also the only brand to disclose any information regarding its purchasing practices, disclosing their method for calculating and ring-fencing labour costs in price negotiations. Despite this, C&A still showed little commitment to upholding their own policies and supply chain pledges in that they cancelled all orders from their suppliers with no warning in March 2020 and only as of November 2020 reinstated and agreed to pay for all previously cancelled orders.34

In the Mexican Index, we have included two new indicators related to the collaboration of brands and distributors with multi-stakeholder groups such as business chambers and associations, with the intention of finding out how they link up with these bodies that have a national and state presence throughout the country such as The National Textile Chamber (CANAINTEX) The National Clothing Chamber (CANAIVE) The National Footwear Chamber (CANAICAL), The Guanajuato Footwear Chamber (CICEG) The Chamber of the Tannery Industry (CICUR) and the National Association of Departmental and Self-Service Shops (ANTAD). Despite the fact that 45% of the brands and retailers included in the Index belong to the National Association of Self-Service and Department Stores, only 1 brand, Flexi, discloses their membership of a national business association or multi-stakeholder initiative. Meanwhile, no brands disclose evidence of labour certification from a relevant chamber or industry body.

34. Source: https://cleanclothes.org/news/2020/ca-finally-pays-orders-placed-before-the-pandemic 35. Source: https://www.eluniversal.com.mx/articulo/nacion/sociedad/2015/05/17/mexico-primer-lugar-en-estres-laboral-oms 36. https://dof.gob.mx/nota_detalle.php?codigo=5541828&fecha=23/10/2018 NORMA Oficial Mexicana NOM-035-STPS-2018, Factores de riesgo psicosocial en el trabajo. Identificación análisis y prevención.

The World Health Organization refers to Mexico as one of the countries with the greatest occupational stress.35 In October 2019, NOM-035 36 came into force in Mexico which required employers to identify, analyse and prevent psychosocial risk factors at work. Therefore, we decided to include indicators related to the Health and Welfare of Employees that include topics such as emotional wages that refer to mental health, training in life skills, provision of nutritious meals, support with day-care centres and flexible working hours. However, in this section we found that only 20% of the brands in this Index publish information on wellness programmes for their direct employees and only 15% publish programmes focused on developing their employees' careers towards better positions and on talent development or activities focused on offering career opportunities to young people, such as internships, mentoring at schools and universities and plans for recent graduates.

20% of brands publish information on wellness programmes for their direct employees

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

5. SPOTLIGHT ANALYSIS CONSUMPTION As the world faces accelerating climate breakdown, we cannot continue making, buying and discarding clothing at the current and expected rates. This is why we focused on overproduction, overconsumption and waste as part of this year’s Spotlight Issues. Under Consumption, not a single Mexican brand scored any points. It is surprising that not a single Mexican brand is addressing these issues and working to keep waste out of landfill. The international brands C&A and Levi’s both publish that they offer take-back recycling schemes in store. While C&A was the only brand to publish the amount of items incinerated each year, and their strategy and progress towards reducing pre-consumer waste. Meanwhile, Levi’s was the only brand to offer repair services to the brand’s customers to help extend the life of their products. However, no brands included in this Index publish the number of products (e.g. garments, shoes, socks) they make each year or the amount of textile waste they generate a year.

COMPOSITION 17 out of the 20 brands (85% of brands) included in the Index do not score any points under Composition. El Palacio de Hierro, is the only Mexican brand to score any points in Composition as they publish their progress towards reducing the use of virgin plastics (including textiles, accessories, hangers, packaging). C&A and Levi’s both lead once again in this section, with both of them publishing a sustainable materials strategy and progress on achieving their materials targets. They also both disclose evidence of developing circular solutions to enable textile to textile recycling. Considering up to 700,000 microfibres can shed from our clothes in a typical wash, we expected brands to be addressing this alarming issue. However, we found not a single brand publishes what they are doing to minimise the impact of microfibres.

CLIMATE Considering the global fashion industry annually emits as much greenhouse gas emissions as France, Germany and the UK combined, too many fashion brands continue to say little about the steps they are taking to drastically reduce their environmental impacts.

However, considering that a global water crisis has been ranked in the top 5 global risks, it is surprising to see only one brand, C&A, disclosing water usage data for their own operations, manufacturing and at raw material level.

17 out of the 20 brands included (85%) do not publish any information about their impacts and actions relating to climate change. While 25% of brands published a policy on Energy and Carbon Emissions for their own operations, only the two international brands publish their annual carbon emissions in their own operations and for their supply chain. In addition, not a single brand publishes a time bound and measurable commitment to zero deforestation. Positively, one Mexican brand, El Palacio de Hierro, publishes the percentage of energy use coming from renewable sources in the company’s owned and operated facilities (e.g. head office, retail stores, distribution centres, warehouses, etc.). However, not a single brand publishes this information in relation to their supply chain.

[TOP] Chamber of the Footwear Industry of the State of Guanajuato © CICEG [BOTTOM] Collective Innovation Cooperative of San Cristobal de las Casas, Chiapas © Efraín P. Miranda

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT:

ENVIRONMENTAL REGULATION AND THE FASHION INDUSTRY

BY FEDERICO J. ARCE N. MASTER IN ENVIRONMENTAL LAW

The Fashion Transparency Index Mexico is the first step to shed light on the challenges faced by this sector in different aspects and to find adequate balances in the development of public policies that provide more efficient regulatory instruments, guarantee employment, and promote economic development in an environment of sustainability and social justice.

When referring specifically to the textile and fashion sectors, clothing manufacturing has increased significantly. This increase has been fostered by a growing middle class population and an increase of the sales per capita in developed economies. Said phenomenon has become popular under the name of fast fashion, which is characterised by fast changes in style, a greater number of collections offered per year, and lower prices. This is a production, distribution and usage system that works linearly: great amounts of resources are extracted to transform them into products with a relatively low usage and a great amount of waste by the end of the cycle. This system leaves little economic opportunities unexploited, exerts pressure on resources, pollutes and degrades the environment, and creates negative social impacts that are relevant

37. 2019 de Pulse of the Fashion Industry.

at local, regional and global levels. It is estimated that the economic value of the negative externalities may account for up to 192 billion dollars for 2030.37 The Fashion Transparency Index Mexico is the first step to shed light on the challenges faced by this sector in different aspects and to find adequate balances in the development of public policies that provide more efficient regulatory instruments, guarantee employment, and promote economic development in an environment of sustainability and social justice. Regulations for the environment alone require new approaches that differentiate little from big producers, the degrees of compliance, and the push provided by technologies that promote circular manufacturing processes and the use of renewable energies.

To achieve the objectives of regulation and environmental improvements we require a radical change in the role currently played by companies so that they directly control the ecoinnovation applied to products and the life cycle of their materials, promoting circular processes. Concurrently, they shall increase their liability and raise awareness by being transparent about their commitment to the environment and society in order to strengthen the decision-making and purchasing criteria of consumers. Lastly, without losing sight of profitability, they shall increase their social participation, collaborating with governments and the society to achieve common environmental and social objectives.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

VIEWPOINT:

CHILD LABOUR IN THE FASHION INDUSTRY38

BY JUAN MARTÍN PÉREZ GARCÍA EXECUTIVE DIRECTOR, CHILDREN'S RIGHTS NETWORK, REDIM

While child labour has been analysed from different approaches, the most common interpretations are made in the historical and macroeconomic spheres. According to UNICEF, child labour is any activity that exceeds a minimum amount of hours, which depends on the age of the girl or boy and the nature of the work. In Mexico, the Secretariat of Labor and Social Welfare distinguishes two general categories of child labour: regulated and safe work performed by adolescents between 15-17 years old, and dangerous child labour that, as its name indicates, does not provide the minimum safety conditions and can lead to deficiencies in the moral, emotional or physical development.

Child labour is not unsafe because of its illegal or nonconsensual nature, but rather because of the type of tasks demanded and the conditions in which it is performed, and because said practices conflict with the exercise of human rights. According to the North American Industry Classification System (NAICS), in 2017 it was estimated that within the population between 5-17 years old, there were 51,000 girls, boys and adolescents working in the clothing industry. As per said estimates, the state with the highest level of child and adolescent labour is Puebla, with 36.1%, followed by Guanajuato, with 23.7% in relation to the total national percentage.

38. Red por los Derechos de la Infancia en México (REDIM). (2019). Acercamiento al Trabajo Infantil y Adolescente en la Industria del Calzado y la Confección en el Estado de Guanajuato. [Approaching Child and Adolescent Labor in the Clothing Industry in the State of Guanajuato]. México

Lastly, in the case of Guanajuato, there is little information regarding the real current situation of child and adolescent labour in the clothing industry of that state. The data obtained use a limiting methodology that only considers visible child labour, i.e., children who sell in stores or in the streets. The available data and methodologies turn the child and adolescent labour used at some point of the supply chain invisible. Both, the authorities and businesspeople, need to work together so as to raise awareness on the current situation of working children so that their human rights can be restored and protected.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

FINAL THOUGHTS & RECOMMENDATIONS

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

TAKE ACTION ON TRANSPARENCY Brands and Retailers The document "Rebuilding a more sustainable fashion industry after COVID-19", mentions that it is crucial that fashion companies do not fall into the temptation of abandoning the path towards clean and sustainable practices in order to avoid the present economic crisis, because consumer studies before and during the pandemic highlight the importance of knowledge of sustainable practices in purchasing decisions.40 Today more than ever it is necessary to know what brands are doing to address the human rights and environmental issues present within the fashion supply chain and to increase transparency for their workers, customers and other stakeholders, so that a fully informed purchasing decision can be made. Transparency in the industry is a first step in understanding where they stand in relation to production methods, sourcing of inputs, purchasing practices, their environmental impacts and the effects of these activities on workers in the supply chain, so that improvements can be made in both the short and long term towards a more sustainable, fair and safe industry.

In a survey of consumer behaviour in the face of the crisis in five countries, The Boston Consulting Group41 shows that 75% of consumers see sustainability as very important. As media and social networks promote social and environmental responsibility in the fashion industry, concern is growing, especially among Millennials and Gen Z. More than a third of respondents said they would change their preferred brand for reasons related to responsible practices and more than half said they anticipated that their next purchase decision would be based on those brands with more sustainable practices. This may not yet be so evident in the Mexican market, but it is only a matter of time before responsible social and environmental practices become fundamental decision factors for many consumers when purchasing a product. Price and aesthetics still dominate shopping decisions but the industry cannot wait for the consumer to lead this, it is up to fashion leaders to take bolder steps towards the transition to a sustainable industry.

transparent and accountable on subjects that we have covered in the Index, linked to the promotion and protection of human rights and the environment.

We recommend that companies in the industry take advantage of the importance of the moment, which puts special focus and interest on the brands’ willingness to be more

40. FUTURE: REBUILDING A MORE SUSTAINABLE FASHION INDU TRY AFTER COVID-19. http://media-publications.bcg.com/france/Pulseof-the-Fashion-Industry2019.pdf 41. Sustainable Apparel Coalition, Boston Consulting Group and Higg Co. (Abril 2020). WEAVING A BETTER

2020 has been a year of significant change within the fashion industry. The COVID-19 pandemic has shown that the current model of the industry requires change at the deepest and most systemic levels to prosper. Among the necessary actions for the industry, transparency on social and environmental policies is a priority not only to ensure consumer confidence in uncertain times, but to generate a business model in which all involved can have a dignified life. At the local level, tools such as the Fashion Transparency Index in Mexico are an opportunity to initiate a new culture of transparency in the fashion industry.

In the next 12 months, we urge major brands and retailers to: Publicly disclose your suppliers starting with the first tier, but don’t stop there. Map and publicly disclose your full supply chain, right down to raw material level. In response to the coronavirus pandemic, honour your contracts and commit to supporting your suppliers and supply chain workers in this time of crisis. Publish more information about your purchasing practices. Publish more information about your environmental impacts, including the amount of carbon emissions, water consumption, pollution and waste created across your value chain, and explain what you’re doing to conserve and regenerate resources. Answer your customers’ #WhoMadeMyClothes requests on social media or via email with practical information and data, not just your policies and principles.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

TAKE ACTION ON TRANSPARENCY Governments and policymakers

Citizens

Better policies and regulations, including more effective implementation and enforcement, are needed to transform environmental sustainability and respect for human rights in the global fashion industry. A few fashion brands and retailers are leading on transparency and making moves towards being more sustainable and responsible, but the vast majority of brands are doing and disclosing very little. These laggards won’t move without being forced to do so through legislation.

We encourage you to demand that major brands and retailers are more transparent. Always ask the brands you buy #WhoMadeMyClothes You can do this by tagging your favourite brands on social media and using this hashtag, or you can use our automated email tool to get in touch with them directly.

In the next 12 months, we urge governments and policymakers to: Invest in better implementing and enforcing existing laws and policies that are meant to protect fashion’s supply chain workers and the environment. Ratify ILO Convention 190: Eliminating violence and harassment in the world of work. Put mandatory human rights and environmental due diligence on the legislative agenda and move towards proposing, passing and adopting this legislation. Make sure it includes liability for a company’s contribution to harms caused in the global supply chain.

Why ask this question? Because it sends brands a strong message -- you care about the way your clothes have been made and want the assurance that the people making them have been paid fairly, treated with dignity and that the environment wasn’t destroyed in the process. We promise you that brands are listening, so use your voice and tell them to be more transparent and accountable. You have the right to know that your hard-earned money is not supporting exploitation, human rights abuses and environmental destruction. But there is no way to hold brands and governments to account if information about what we buy is kept secret.

Write to your elected officials and urge them to require brands and retailers to be more transparent and accountable for how their clothes are made. Tell your government that they should make companies legally responsible for the impacts they have on the environment and the lives of people working in their supply chains, at home and abroad. You can do this using our ‘write a postcard to a policymaker’ tool on our website www. fashionrevolution.org.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

THANK YOU! We extend the utmost gratitude to our global pro bono consultation committee – Dr. Mark Anner, Neil Brown, Ian Cook, Subindu Garkhel, Kristian Hardiman, Christina HajagosClausen, Aruna Kashyap, Kate Larsen, Dr. Alessandra Mezzadri, Katie Shaw, Francois Souchet, Joe Sutcliffe and Ben Vanpeperstraete. An absolutely enormous thank you to all the others who provided informal feedback on the methodology and report. We also appreciate the contribution of some texts provided by the fashion revolution Brasil team. We would particularly like to thank Abril Appel, General Director, National Chamber of the Textile Industry, CANAINTEX. Alejandro Gómez Támez, Executive President of the Footwear Chamber of the State of Guanajuato, CICEG. Anabelle Sulmont, Coordinator of the Project Public Policies with a focus on Human Development and Inclusion of the United Nations Development Programme in Mexico, UNDP. Carlos Lara, Founder Artículo 27 A.C. Elena Hurtado, General Director Intermoda. Federico Arce

Navarro, Master in Environmental Law, Professor at UNAM. Humberto Muñoz Grandé, Director of the Doctorate in Corporate Social Responsibility, Universidad Anáhuac. Joanna Ruíz Galindo, Founding Partner, Abierto Mexicano de Diseño. Jorge Plata, Founder and General Director, Argentum Textil. Marisol Conover, Directora de la Maestría en Moda, Universidad Anáhuac. Mónica Salazar, General Director, Dignificando el Trabajo, A.C. Rodrigo Olvera, Human Rights Defender and Member of the Organization, Maquila Solidarity Network. Shula Atri, General Director, Fashion Group México the Advisory Committee in Mexico and those who wrote viewpoints in the report Federico Arce Navarro, Mónica Salazar, Humberto Muñoz Grandé, Juan Martín Pérez García, Annabelle Sulmont for their important contributions to this report. We would also like to thank the Laudes Foundation for their financial support and Laudes Foundation has given support to Arlénica AC and Fashion Revolution UK which, in turn, have

ARTE, LENGUAJE E INVESTIGACIÓN PARA EL CAMBIO SOCIAL, A.C.

funded the research for this Index. The content of this publication is the sole and exclusive responsibility of Arlénica AC and Fashion Revolution UK. We would also like to thank the representatives from the brands and retailers who participated in the Fashion Transparency Index Mexico 2020. We know that brands receive frequent requests for information from civil society and NGOs, and it’s difficult to respond to them all and still get work done. Your participation is both vital and appreciated. This report has been designed by Emily Sear, Head of Design, with support from Bronwyn Seier, Social Media Manager & Designer (who are both part of the Fashion Revolution global team), and was adapted by Abraham Maldonado, Eduardo Patricio Saavedra (who both part of Arlenica). The English version of this report was translated by Arlenica with the support of translator Valeria Lara.

Last but not least, we would like to thank you for reading this report and take this opportunity to remind you that Fashion Revolution is a charitable organisation. This means that everything we do is made possible by support from grants and donations from people like you. By making a small donation, you will be making a big difference to Fashion Revolution's important work demanding a cleaner, safer, fairer, and more transparent fashion industry. It’s easy to do. Please visit the donate page on our website where you can choose to donate any amount, or even opt to make a regular monthly donation:

www.fashionrevolution.org/donate With your help, we can continue to create resources such as the Fashion Transparency Index, spark an even wider global conversation about the impacts of our clothes and create positive change. Thank you!

Fashion Revolution Foundation: Registered Charity in England & Wales No. 1173421; Registered Company in England & Wales No. 10494997. Fashion Revolution CIC: Registered Company No. 08988812. Registered Address: 70 Derby Street, Leek, Staffordshire ST13 5AJ, UK

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ILO Better Factories Cambodia. Transparency drives improvements in factory working conditions (2014). Available at: https://www.ilo.org/global/about-the-ilo/ newsroom/news/WCMS_237913/lang--ja/index.htm

Business of Fashion and McKinsey & Company. The State of Fashion 2019 (2019). Available at: https:// www.mckinsey.com/~/media/McKinsey/Industries/ Retail/Our%20Insights/The%20influence%20of%20 woke%20consumers%20on%20fashion/The-State-ofFashion-2019.ashx

ILO Better Work. Firm Compliance and Public Disclosure in Vietnam (2019). Available at: https:// betterwork.org/wp-content/uploads/2020/01/PublicDisclosure-in-Vietnam.pdf

Accenture Strategy and UN Global Compact. CEO Study on Sustainability (Sep 2019). Available at: https://www. accenture.com/_acnmedia/PDF-109/Accenture-UNGCCEO-Study.pdf#zoom=40 IndustriALL Global Union (2020). Available at: http:// www.industriall-union.org/ Transparency Pledge (2020). Available at: https:// transparencypledge.org/ Open Apparel Registry (2020). Available at: https://info. openapparel.org/ OECD. Due Diligence Guidance for Responsible Supply Chains in the Garment & Footwear Sector (2018). Available at: http://www.oecd.org/industry/inv/mne/ responsible-supply-chains-textile-garment-sector. htm Sedex. Sedex Members Ethical Trade Audit (SMETA) Best Practice Guidance Version 6.0 April 2017 (2017). Available at: https://cdn.sedex.com/wp-content/ uploads/2017/04/Smeta-6.0-BPG.pdf Accord on Fire and Building Safety in Bangladesh. Accord Factories remediation progress (2020). Available at: https://bangladeshaccord.org/factories International Labour Organisation. ILO Better Work Transparency Portal (2020). Available at: https://portal. betterwork.org/transparency Alliance for Bangladesh Worker Safety. Inspection Reports & CAPs (2018). Available at: http://www. bangladeshworkersafety.org/factory/reports-caps

United Nations. Sustainable Development Goals (2015). Available at: https://sustainabledevelopment.un.org/ sdgs United Kingdom Government. Modern Slavery Act 2015 (2015). Available at: www.legislation.gov.uk/ ukpga/2015/30/contents/enacted Australian Government. Modern Slavery Act 2018 (2018). Available at: https://www.legislation.gov.au/Details/ C2018A00153 Institute for Human Rights and Business (IHRB). Focus Areas: Migrant Workers (2020). Available at: https://www. ihrb.org/focus-areas/migrant-workers Action, Collaboration, Transformation (2020) Available at: https://actonlivingwages.com/ Fair Wear Foundation. Wage Ladder (2020). Retrieved: https://www.fairwear.org/resources-and-tools/wageladder/ Fairtrade International. Fairtrade Textile Standard (2016). Available at: https://www.fairtrade.net/standard/textile Fair Labor Association. FLA Fair Compensation strategy (2015). Available at: https://www.fairlabor.org/globalissues/fair-compensation/about-this-work Labour Behind the Wages. Tailored Wages: The state of pay in the global garment industry (2019). Available at: http://labourbehindthelabel.net/wp-content/ uploads/2019/06/TailoredWagesUK-FP-updated.pdf

Global Living Wage Coalition. The Anker Methodology for Estimating a Living Wage (2020). Available at: https:// www.globallivingwage.org/about/anker-methodology/ Asia Floor Wage Alliance (2020). Available at: https://asia. floorwage.org/ The Office of the Small Business Commissioner and The Department for Business, Energy and Industrial Strategy. Prompt Payment Code (2020). Available at: https://www.smallbusinesscommissioner.gov.uk/ppc/ The Better Buying Initiative (2020). Available at: https:// betterbuying.org/ CARE International (2019). Made by Women: IMPACT REPORT 2019 (2019). Available at: https://www.care.org/ sites/default/files/mbw_impact_report_2019_final.pdf UK Government. The Equality Act 2010 (Gender Pay Gap Information) Regulations (2017). Available at: https:// www.legislation.gov.uk/ukdsi/2017/9780111152010 Euromonitor International, Apparel and Footwear Industry, 2020 Edition. The Ellen MacArthur Foundation. A New Textiles Economy: Redesigning Fashion’s Future (2017). Available at: https://www.ellenmacarthurfoundation. org/assets/downloads/publications/A-New-TextilesEconomy_Full-Report.pdf WRAP. Valuing Our Clothes: the cost of UK fashion (2017). Available at: https://www.wrap.org.uk/sites/files/wrap/ valuing-our-clothes-the-cost-of-uk-fashion_WRAP. pdf Morten Lehmann A, Tärneberg S, Tochtermann T, Chalmer C, Eder-Hansen J, Seara JF, et al. Pulse of the Fashion Industry 2018. Global Fashion Agenda (2018). Available at: https://globalfashionagenda.com/pulseof-the-fashion-industry-2018-report-released/

Napper IE, Thompson RC. Release of synthetic microplastic plastic fibres from domestic washing machines: Effects of fabric type and washing conditions. Marine Pollution Bulletin (15 Nov 2016);112:39–45. Available at: https://www.sciencedirect. com/science/article/abs/pii/S0025326X16307639 Boucher J, Friot D. Primary Microplastics in the Oceans: a Global Evaluation of Sources. IUCN (2017). Available at: https://portals.iucn.org/library/sites/library/files/ documents/2017-002-En.pdf European Commission. Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) (2019). Available at: https://ec.europa.eu/environment/ chemicals/reach/reach_en.htm Zero Discharge of Hazardous Chemicals (ZDHC). Roadmap to Zero (2020). Available at: https://www. roadmaptozero.com/ UN Climate Change. Fashion Industry Charter for Climate Action (2018). Available at: https://unfccc.int/ sites/default/files/resource/Industry%20Charter%20 %20Fashion%20and%20Climate%20Action%20-%20 22102018.pdf The G7 Fashion Pact. Available at: https:// thefashionpact.org/ World Health Organization (WHO). Quantitative risk assessment of the effects of climate change on selected causes of death, 2030s and 2050s (2014). Available at: https://apps.who.int/iris/ handle/10665/134014 Kering. Environmental Profit and Loss Methodology (2018) Available at: https://www.kering.com/en/ sustainability/environmental-profit-loss/methodology/ World Economic Forum. The Global Risks Report 2020 (2020). Available at: http://www3.weforum.org/docs/ WEF_Global_Risk_Report_2020.pdf

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ANNEX 2: DEFINITIONS & ABBREVIATIONS Auditing is the process of reviewing a company's finances, working conditions, and environmental practices. It uncovers risks to workers' safety and opportunities to improve working conditions.

Freedom of Association is the right of individuals and workers to form and join groups of their own choosing in order to take collective action to pursue the interest of the members of the group.

(Source: Walk Free Foundation)

(Source: ILO)

Circularity (or Circular Economy) is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.

Forced labour is any work or service which people are forced to do against their will, through the use of violence or intimidation, or by more subtle means such as accumulated debt, retention of identity papers or threats of denunciation to immigration authorities. Forced labour is the most common element of modern slavery.

(Source: WRAP)

(Source: ILO and Anti-Slavery International)

Collective bargaining is a process where employers and unions negotiate to determine fair wages and working conditions. (Source: ILO) Due diligence is a process through which companies assesses their impacts on human rights and the environment and then take actions to reduce any negative impacts. (Source: United Nations Global Compact)

Downcycling is to recycle something in such a way that the resulting product is of a lower value than the original item. Examples include recycling textiles into building insulation, rags, or carpet underlay. (Source: Merriam Webster) Equal pay means that men and women in the same employment performing equal work must receive equal remuneration. This applies not only to salary, but to all contractual terms and conditions of employment, such as holiday entitlement, bonuses, pay and reward schemes, pension payments and other benefits. (Source: Equality and Human Rights Commission)

Gender pay gap is defined as the difference in median pay between men and women.

Microfibres are fibres that are shed from clothing during production, consumer use, or end of life, and end up as pollution in the environment. Microfibres from synthetic clothing (such as polyester) are the largest source of primary microplastics polluting our oceans. Microplastics are any plastic particles smaller than 5mm.

Pre-consumer waste is generated by textile and clothing manufacturers during any stage of the production clothing. Pre-consumer wastes include textile scraps after the cutting of garment pieces, leftover textile samples, selvedges, end-of-roll wastes, damaged materials, part-finished or finished clothing samples from the design and production department. (Source: Dobilaite et al., 2017) Purchasing practices refers to a companyâ&#x20AC;&#x2122;s process of buying goods and services. This might include activities such as planning and forecasting, design and development, cost negotiation, sourcing and placing orders, production management and payment and terms. (Source: Better Buying)

Living wage is a wage a worker earns in a standard working week that is enough to provide for them and their family's basic needs - including food, housing, clothing, education and healthcare. (Source: Clean Clothes Campaign)

Materiality Assessment is an exercise designed to gather insights on the relative importance of specific environmental, social and governance (ESG) issues. The insight is most commonly used to inform sustainability reporting and strategic planning. (Source: Greenbiz)

(Source: CIRS-REACH)

(Source: IUCN)

(Source: Office for National Statistics)

Grievance mechanism is a complaint process that can be used by workers, allowing them to voice concerns about working conditions without fear of punishment or retribution. (Source: VeritĂŠ)

Restricted Substance List sets out the specific chemicals substances that are not allowed to be used in products or manufacturing processes. Typical hazardous substances that are restricted include lead, AZO dyes, DMF, PAHs, Phthalates, PFOS, the nickel release and so on.

Remediation is the action of fixing something, particularly reversing or stopping environmental damage or human rights abuses. A Corrective Action Plan is an agreement with a supplier on what needs to be remedied, when it is to be done, and who is responsible for which tasks. (Source: ETI Norway)

Sex-disaggregated data is information which is measured and separated according to gender. It allows comparisons on outcomes between women and men on specific topics and brands measuring and providing it will increase the visibility of women and the issues they face across supply chains. (Source: BSR) Supply chain / value chain refers to all the steps it takes to produce and sell a product, from farm to closet. (Source: OECD) Wet processing facilities are involved in the production of clothing whose activities typically involve rinsing, bleaching, dyeing, printing, treating or coating fabric and laundering. (Source: Garment Merchandising blog)

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

Disclaimer The Fashion Transparency Index Mexico is made available on the express request that it will be used only for general information purposes. Readers are encouraged to form their own views and opinions on each of the brands mentioned in this Index. All content in the Fashion Transparency Index is not to be construed as connected to or relating to any form of legal, governance, regulatory, research or investment advice nor any other specific or general advice on buying, selling or dealing in any way with the brands mentioned in this Index. This Index has not been prepared to any specific or general investment objectives. Before acting on anything inspired by anything contained in this Index, you must consider whether it is suitable to your circumstances and, if necessary, seek professional advice. No representation or warranty is given that the material in this Index is accurate, complete or up-to-date. The material in this Index is based on information that we have found in the public domain and reasonably consider correct at time of publication. Fashion Revolution has not verified, validated or audited the data used to prepare this Index. The assessment of fashion brands has been carried out solely according to the new Fashion Transparency Index methodology and no other assessment models used by any of the project partners or our analyst team. Any statements, opinions, conclusions or recommendations contained in this Index are honestly and reasonably held or made at the time of publication. Any opinions expressed are our current opinions based on detailed research as of the date of the publication of this Index only and may change without notice. Any views expressed in this Index only represent the views of Fashion Revolution CIC and Fashion Revolution Mexico, unless otherwise expressly noted. The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution CIC, Fashion Revolution Mexico, Arlenica or the Fashion Transparency Index Mexico.

While the material contained in this Index has been prepared in good faith, neither Fashion Revolution CIC, Fashion Revolution Mexico or Arlenica nor any of its partners, agents, representatives, advisers, affiliates, directors, officers or employees accept any responsibility for or make any representations or warranties (either express or implied) as to the accuracy, completeness, reliability, or truth, of the information contained in this Index or any other information made available in connection with this Index, and disclaims all liability for loss of any kind suffered by any party as a result of the use of this Fashion Transparency Index. Neither Fashion Revolution CIC, nor Fashion Revolution Mexico or Arlenica, nor any of its agents, representatives, advisers, affiliates, directors, officers and employees undertake any obligation to provide the users of this Index with additional information or to update the information contained therein or to correct any inaccuracies which may become apparent. Reference herein to any specific brand, commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, favouring, boycotting, abusing, defaming by Fashion Revolution CIC, Fashion Revolution Mexico or Arlenica nor any of its agents, representatives, advisers, affiliates, directors, officers and employees. To the maximum extent permitted by law any responsibility or liability for this Index or any related material is expressly disclaimed provided that nothing in this disclaimer shall exclude any liability for, or any remedy in respect of, fraud or fraudulent misrepresentation. Any disputes, claims or proceedings in connection with or arising in relation to this Index will be governed by and construed in accordance with Mexican law and English law and submitted to the exclusive jurisdiction of the courts of England and Wales.

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Licences – Creative Commons

This work is owned by Fashion Revolution CIC (Company number: 8988812) and has been researched by Lorena Cortés, Magali Franco, Luis Armando Mosqueida, Julio Martínez, Sarah Ditty, Ilishio Lovejoy and Sienna Somers between December 2019 and November 2020 with further support from Carry Somers, Efraín Martínez, Christian Stefanoni and Mireille Acquart.

The Fashion Transparency Index is licensed under a Creative Commons Attribution Non-Commercial No Derivatives 4.0 International Licence. It is not a Free Culture Licence. Please see the link for more information: https://creativecommons.org/licenses/ by-nc-nd/4.0/

The Laudes Foundation funded Fashion Revolution CIC who in turn funded the research for this Index. We would like to highlight our fair treatment of fact and our non-biased approach to assessing C&A, which is a partner on sustainability projects with the Laudes Foundation . The same parent group, COFRA GROUP, owns both entities. We have mitigated any risk of a conflict of interest by the following three methods: viewing and treating C&A and the Laudes Foundation as separate entities; treating C&A like any other of the 19 brands we analysed; and we did not give C&A any preferential treatment.

For the Raw Data File we make available we are not granting any licence for you to use the Raw Data, which we have compiled to produce this Index. You are only permitted to view the Raw Data File. You are free to copy and redistribute the Fashion Transparency Index Mexico in any medium or format provided that you give Fashion Revolution credit for creating it. This licence does not give you the right to alter, remix, transform, translate or otherwise modify the content in any way. This includes providing it as part of a paid service, nor as part of a consultancy or other service offering. You must contact Fashion Revolution at legal@ fashionrevolution.org to obtain a licence if you want to commercialise the whole or any part of this Index. For the Raw Data File we make available we are not granting any licence for you to use the Raw Data, which we have compiled to produce this Index. You are only permitted to view the Raw Data File. © Fashion Revolution CIC 2020 Published 16th December 2020

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ABOUT FASHION REVOLUTION Fashion Revolution is the worldâ&#x20AC;&#x2122;s largest fashion activism movement. We are a global campaign working towards systemic reform of the fashion industry with a focus on transparency. We believe in a global fashion industry that conserves and restores the environment and values people over growth and profit. The issues in the fashion industry never fall on any single person, brand, or company. Thatâ&#x20AC;&#x2122;s why we focus on using our voices to transform the entire system. With systemic and structural change, the fashion industry can lift millions of people out of poverty and provide them with decent and dignified livelihoods. It can conserve and restore our living planet. It can bring people together and be a great source of joy, creativity and expression for individuals and communities.

" If we are to evolve from this global pandemic to become a more balanced and mindful fashion industry, we have to make darkness a thing of the past, and embrace radical transparency as our guiding light." Orsola de Castro

Co founder, Fashion Revolution www.fashionrevolution.org @fash_rev fash_rev facebook.com/fashionrevolution.org

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX MEXICO 2020

ABOUT ARLENICA OUR SYSTEMIC CHALLENGE: THE NORMALISATION OF VIOLENCE This normalisation of violence, which is massively mediatised, has transformed the behaviour patterns of the general population, but above all it has negatively altered the aspirational archetypes of young people and adolescents in various parts of the world. Hence the importance of counteracting the prevailing inertia.

www.arlenica.org @Arlenica_AC arlenica_ac facebook.com/Arlenica_AC

ARTE, LENGUAJE E INVESTIGACIÓN PARA EL CAMBIO SOCIAL, A.C.

OUR PRINCIPLES: • Transparency is key to increasing knowledge and awareness about normalised violence. • Victims or potential victims must be respected and empowered. • Perpetrators or potential perpetrators must be accompanied in a respectful way to change their perceptions about the use of violence.

We are a group of researchers with more than ten years of experience in the implementation, evaluation and monitoring of programmes linked to the causes and factors that generate the normalisation of violence. Over time we have built up our model of care, with which we have proven that it is possible to achieve behavioural changes in the way we live and react to violence.

OUR IMPACT: Decrease in violent, criminal and antisocial behaviour. • Increase in the mental health of individuals (particularly children and young people) • Improvement of social-emotional skills that enable prosocial behaviour in the workplace. • Increase in social cohesion and the promotion of human rights

• Human rights and a gender perspective are transversal to any process and must always be respected and promoted.

• Social empowerment of vulnerable groups in the face of violent behaviour

• Evaluation, continuous learning and updating of our methodologies.

• Promotion of public policies that reduce the normalisation of violence

WE DO THIS BY: • Developing interventions to increase their pro-social attitudes and behaviours. • The use of visual art as a language that can improve and help heal emotional processes related to violence. • Proposals for public and private policies that promote prosocial behaviour. • The generation and dissemination of evidence, research and strategic analysis to reduce any type of violence.

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