Fashion Transparency Index Brazil 2018 by Fashion Revolution

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

FASHION INDEX 2018 Edition A review of 20 of the biggest Brazilian fashion brands

APRIL 2017 and retailers ranked according to how much they disclose about their social and environmental policies, practices and impact.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

CONTENTS 03 04

FOREWORD EXECUTIVE SUMMARY

06 07 10 11 14 15

WHY TRANSPARENCY? Why greater transparency is important in the fashion industry? Viewpoint: Marcel Gomes, Repórter Brasil What do we mean by transparency? Viewpoint: Edmundo Lima, Abvtex Viewpoint: Dari Santos, Alinha Institute

16 17 18 19 20 21 23

ABOUT THE FASHION TRANSPARENCY INDEX Why have we conducted this research? About the methodology The methodology Weighting of the scores How does the scoring work? Criteria to select brands

24 25 26 27 29

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

30 31 32 37 41 45 49

THE SCORES ACROSS THE 5 SECTIONS Average scores across the sections 1. Policy & Commitments 2. Governance 3. Traceability 4. Know, Show & Fix 5. Spotlight Issues

54 55 58 59

TRANSPARENCY PRODUCES CHANGE Remarks from the sustainable production and consumption programme team at FGVces Viewpoint: Fernando Valente Pimentel, Abit Viewpoint: Helio Mattar, Akatu institute

60 61 62 63 64

WHAT SHOULD YOU DO WITH THIS INFORMATION? Citizens Brands and Retailers Governments and Policymakers NGOs, Unions and Workers

65 67 68 69 70

ACKNOWLEDGEMENTS ANNEX 1 Definitions and Abbreviations ANNEX 2 References An important final note About Fashion Revolution

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 2018. All rights reserved. This document is not to be copied or adapted without permission from Fashion Revolution CIC.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

Disclaimer The Fashion Transparency Index Brazil 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 here. All content in the 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 and may change without notice. Any views expressed in this Index only represent the views of Fashion Revolution CIC and Instituto Fashion Revolution Brasil. The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution CIC, Instituto Fashion Revolution Brasil or the Fashion Transparency Index Brazil.

While the material contained in this Index has been prepared in good faith, neither Fashion Revolution CIC nor Instituto Fashion Revolution Brasil or 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 Instituto Fashion Revolution Brasil or 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 and Instituto Fashion Revolution Brasil 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 the Brazilian law and English law and submitted to the jurisdiction of each country’s respective courts.

Attribution

Licences – Creative Commons

This work is owned by Fashion Revolution CIC (Company number: 8988812) and Instituto Fashion Revolution Brasil, and has been written by Sarah Ditty and Eloisa Artuso.

The Fashion Transparency Index Brazil 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:

The research was conducted by Eloisa Artuso and Alexandre Miyake, with further support of Fernanda Simon, Aron Belinky, Renato Moya and Sarah Ditty, between May and July 2018. It has been designed by Heather Knight, Erika Söderholm and Estúdio Bora Lá. C&A 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 C&A 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 C&A 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.

https://creativecommons.org/licenses/by-ncnd/4.0/deed.pt_BR

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 Brazil in any medium or format, provided that you give Fashion Revolution and Fashion Revolution Brasil 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.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

FOREWORD

CARRY SOMERS FOUNDER AND GLOBAL OPERATIONS DIRECTOR FASHION REVOLUTION

My favourite short story is La Luz Es Como el Agua, Light Is Like Water, by Gabriel Garcia Marquéz, one of Latin America’s foremost novelists. Two brothers ask for a rowing boat one Christmas. Every Wednesday, whilst their parents are at the cinema, they let the light flow out to a depth of four hand spans and then learn to use a sextant and compass as they navigate around their fifth floor apartment in Madrid. This adventure was the result of a frivolous remark in response to one of the brothers asking why light comes out at the flick of a switch. "Light is like water. You turn on the tap and out it comes." Months later, they win a school prize and are both rewarded with diving outfits. The following Wednesday, they invite all their classmates over for a party while their parents are out and turn on so many lights that the apartment floods, drowning the

entire fourth-year apart from the two brothers. When the firemen finally force open the door, the brothers are navigating towards the lighthouse amidst the ‘household objects, in the fullness of their poetry, flying through the kitchen sky on their own wings.’

to become a flood. Transparency in Brazil is clearly not yet a raging torrent, flowing into every deep nook and crevice, reshaping everything in its path, but just as global brands have had to rapidly adapt to this changing environment, Brazilian brands will soon follow.

Transparency is like water. It started as a slow trickle after the Rana Plaza factory collapse in Bangladesh. It began bubbling up through the cracks. The results of the 2018 Fashion Transparency Index Brazil show that transparency has yet to filter very deeply into the fabric of the industry in Brazil. 75% of the brands surveyed scored 30% or less, whilst 40% of brands scored zero. The overall average score is just 17%.

Indeed, many of the brands surveyed published new information on their website when they knew they were being included in the Index. Those brands who know how to use the tools of transparency to navigate a new course, will be the ones who will survive and thrive in the future. These are the companies who are able to spot any unauthorised suppliers being used to make their products; the ones who are managing and mitigating risks that might lead to human rights and environmental abuses; the ones who are protecting their brand's reputation.

Globally, transparency is seeping into some of the darkest corners, permeating the fabric of the fashion industry; the light bulbs of transparency are permanently set to the ‘on’ position. This river of transparency is set

Transparency is power. The brands that are still sitting in the armchairs in their fifth floor apartments, those in the Index who haven’t yet learnt how to sail on the tide of transparency, will be drowned by it. The wave is coming; now is the time to get ahead of the curve.

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EXECUTIVE SUMMARY The first edition of the Fashion Transparency Index Brazil was organised by Fashion Revolution CIC and Instituto Fashion Revolution Brasil, with technical support of the Centre for Sustainability Studies at Getulio Vargas Foundation (FGVces). The Fashion Transparency Index is an assessment conducted by Fashion Revolution CIC and shows to what extent major fashion brands and retailers disclose vital supply chain information for greater accountability. Launched globally in 2016, the Index reviews and ranks brands and retailers according to how much information they share publicly about their social and environmental policies, practices and impacts across the value chain. Brazil is one of the major textile industries worldwide and stands out as the fourth largest apparel production complex, employing 1.479 million direct employees, out of which 75% are women. Brazil is also the largest complete textile chain in the West, spanning from production of fibres, such as cotton, to spinning, weaving, finishing, manufacturing

processes and retail, to the catwalks1. Reinforcing its relevance as one of the major players in the industry, Brazil is the first country to have a national edition of the Fashion Transparency Index, emphasising the need to deepen local discussions on the importance of transparency to build a fashion industry with best practices. It is worth noting that transparency is only the beginning of that journey. Transparency is an important tool because it guides companies to a culture of self-assessment and accountability, which, in turn, produces changes in the way business is conducted and, consequently, can help to improve labour conditions and social and environmental practices across the industry. Therefore, publicly disclosing information can bring significant long-term benefits for businesses, generate greater results for workers, mitigate social and environmental impacts and make it easier for consumers to have access to information.

Brazilian companies reviewed in the global Index last year show improvement in results; their level of transparency increased by 38%2 There is a noticeable evolution in the level of transparency of two Brazilian brands, Pernambucanas and Renner, which participated in the global Fashion Transparency Index in 2017 and are now part of the Brazilian edition in 2018. In 2017, Pernambucanas had a overall total score of 8%, going up to 10% this year, whereas Renner showed a significant improvement in data disclosure, considering its total score jumped from 15% to 26%3. International brands C&A and Zara, have been included in both the global Index and the Brazilian edition in 2018, thanks to their solid presence in the domestic market. In 2017, C&A scored 34% as its overall result, and 53% in this Index, whereas Zara showed an evolution from 36% to 40% using the same comparison basis.

By taking these figures into account, it is possible to suggest that including brands and retailers in the Fashion Transparency Index encourages them to publicly disclose a greater level of social and environmental data. Many companies still do not disclose any information Out of the 20 brands and retailers reviewed in this Index, 8 got a result of 0%. Lack of information disclosure from those companies contributed considerably to lower the overall average score in this edition. However, we believe transparency can bring continuous benefits for brands and retailers. Publicly available information can help companies, for instance, to identify and control any unauthorised vendors, which facilitates risk management in their supply chain.

1 Abit 2017 - Available at: http://www.abit.org.br/cont/perfil-do-setor 2 That was the result found when calculating general growth rates for Casas Pernambucanas, Renner, C&A and Zara brands, from 2017 to 2018. 3 Between 2017 and 2018, the FTI methodology was slightly adjusted for text clarification and under the ‘Spotlight Issues’ section. Then it was adjusted to the Brazilian context and, although it can be generally comparable, it might be slightly affected for direct comparison purposes.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

Publicly available supplier lists can help fix problems faster

Still a long way to go towards transparency for all brands and retailers

Having quick access to supplier lists can be crucial to solving problems swiftly. Transparent disclosure makes it easier for brands and retailers to determine when human rights and environmental abuses occur in the places where their products are made. It means that garment workers, unions, and NGOs can also access this data and call upon brands to ensure that abuses stop and workers get remedies. It is essentially about greater corporate accountability4.

No brand or retailer is scoring above 60% of the total possible points. Whilst we are seeing brands and retailers begin to publish more about their social and environmental efforts, there is still much crucial information that remains concealed. Information shared is often difficult to navigate and understand, jargon-heavy and shallow or incomplete.

More talk about policies and commitments than practices and impacts Brands and retailers give a lot more time and space to explain their values and beliefs rather than their actual practices and impacts. On average, the companies scored 32% in section one, which looks at what information they publish about their policies and commitments. However, out of the 20 brands, only 7 scored in the traceability section and 12 scored in topics that address procedures and outcomes of supplier assessments, with an average performance of 11%.

4â&#x20AC;&#x192; You can read more on that topic in Clean Clothes Campaign.

Additionally, brands present information in many different formats and different types of graphics, which makes it hard for consumers and other stakeholders to understand, compare and interpret the data. Brands and retailers need to provide more complete and clearer reports, in formats that are more appropriate for different audiences they want to communicate with.

Transparency brings light to everyone's responsibilities across the supply chain.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WHY TRANSPARENCY?

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WHY GREATER TRANSPARENCY IS IMPORTANT IN THE FASHION INDUSTRY? When the Rana Plaza building collapsed five years ago in Bangladesh, killing and injuring thousands of garment workers, people had to dig through the rubble looking for clothing labels in order to figure out which brands were linked to the five garment factories in the building.

Fragmented supply chains obscure accountability

In some cases, it took weeks for brands and retailers to determine why their labels were found amongst the rubble and what sort of purchasing agreements they had with those suppliers. Many clothing brands sourcing from the factories inside Rana Plaza didnâ&#x20AC;&#x2122;t know their products were being made there.

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 their garments. There are many facilities further down the chain that weave, dye and finish materials and farms that grow fibres used in their clothing. During the manufacturing process our clothes are touched by many pairs of hands before they ever reach the shop floor or, increasingly, online shopping sites.

The vast majority of todayâ&#x20AC;&#x2122;s fashion brands and retailers do not own their manufacturing facilities, making it difficult to monitor or control working conditions across the highly globalised supply chain. This can sometimes be used as an excuse for brands to evade responsibility for how their products are made.

[Top] "Dhaka Savar Building Collapse" by Rijans via Flickr CC [Bottom] "Site of the Rana Plaza factory collapse" by Dorothee Baumann-Pauly

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

A brand might place an order with one supplier, who carves up the order and subcontracts the work to other factories. This happens regularly across the industry and makes it extremely difficult to monitor human rights and environmental impacts. Unauthorised subcontracting causes workers to become effectively invisible in the supply chain, and this is where the highest risk of human rights violations and environmental degradation tends to occur. But these subcontracted and apparently distant facilities are not the only places where poor conditions persist, sometimes it’s right under our noses in manufacturers and communities close to home too. Lack of transparency costs lives Right after the Rana Plaza disaster, it became very clear to us that the fashion industry needed urgent, transformative change. The first step towards this change entailed far greater visibility and transparency of the people working in supply chains, the business relationships at play across supply chains and information about working conditions and environmental impact.

Progress is happening but it’s still difficult to know #whomademyclothes Of course, much has changed since Rana Plaza collapsed, especially in Bangladesh. Many factories have been upgraded, and with all the great attention put on Bangladesh since then, some very real and positive progress has been made towards improving working conditions. However, not enough has changed in global fashion supply chains, and business practices on the whole across the industry are still very secretive. It is extremely challenging, if not impossible, for a consumer to find out where their clothes have been made, by whom and under what conditions — which means it is hugely difficult to know what real-world impacts, both positive and negative, our clothing purchases are having on people’s lives and on the environment. Never again should a tragedy like Rana Plaza happen, yet factory fires, safety accidents and faulty buildings continue to harm people in the places where our clothes are made. Pollution and waste created as a result of the way our clothes are produced and consumed continue to damage the environment. This is why we are still calling for a revolution of the fashion industry.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

People want to know #whomademyclothes Consumers don’t want to buy clothes made by people working in danger, exploited, paid povertylevel wages, in polluted environments. But there is simply not enough information available about the clothes we wear. Fashion Revolution wants to change that. This is why we are pushing for more transparency from the fashion industry. The Fashion Transparency Index is one of the tools that helps us do this. When we are equipped with more — and better quality, credible, comparable — information about the human and environmental impacts of the clothes we buy, we are able to make more informed shopping choices. As a result, we understand that transparency builds consumers’ trust in the brands.

Transparency helps mitigate human rights and environmental violations As Jenny Holdcroft, the Assistant General Secretary of IndustriALL Global Union, explained in 2017 global Fashion Transparency Index report 1, “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 the issues.” Increased transparency and accountability means issues along the supply chain can be addressed and solutions found faster. But it also means positive examples and positive stories can be highlighted, shared and potentially replicated elsewhere.2

People are increasingly asking for greater transparency from the fashion industry. In 2017, more than 2.5 million people across the world participated in Fashion Revolution campaign through events, posting on social media, viewing our videos or downloading resources from our website. Over 113,000 posts using our hashtags, including #whomademyclothes, reached 720 million impressions during April 2018 alone – an increase of 35% on the previous year.

1 Click here to access the global Fashion Transparency Index: https://goo.gl/gzkdBG 2

As explained by Human Rights Watch: https://www.hrw.org/news/2016/09/08/gap-inc-joins-global-brands-publish-factory-list

“59% of consumers believe that companies should do more than what is required by law to benefit society.” PANORAMA DO CONSUMO CONSCIENTE NO BRASIL: DESAFIOS, BARREIRAS E MOTIVAÇÕES AKATU, 2018

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

VIEWPOINT

MARCEL GOMES EXECUTIVE SECRETARY REPĂ&#x201C;RTER BRASIL

The fashion industry has responded slowly to society's demands for more transparency. Every day, there are more people wanting to know how the clothes they wear are made. Whether the cotton farming contaminated rivers with pesticides. Whether the synthetic fibre factory treated the wastewater properly. Whether the seamstresses and retail salespeople were fairly compensated for their work.. That aspiration for information is a natural response to the tragedies and allegations that hit the industry in the past few decades. The collapse of the Rana Plaza building, in Bangladesh, in 2013, killed over 1,000 people and may be the greatest global symbol of the problems faced by this industry.

However, in Brazil, consumers are also concerned with the poor conditions of seamstresses, who are often found in contemporary slave-like conditions. The media has raised awareness of the problem for a few years and has broadcast news featuring those cases. A few brands have also taken a step ahead, doing due diligence in their supplier facilities and disclosing information about their supply chains. But they are an exception. We hope the Fashion Transparency Index can incentivise more brands to publicly disclose information, and we also hope that people feel encouraged to demand more information about the clothes they wear.

In Brazil, consumers are also concerned with the poor conditions of seamstresses, who are often found in contemporary slave-like conditions.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WHAT DO WE MEAN BY TRANSPARENCY? For Fashion Revolution, transparency means credible, comprehensive and comparable public disclosure of data and information about brands and retailers’ supply chains, business practices and the impacts of these practices on workers, communities and the environment. When we talk about greater transparency, we mean public disclosure of sourcing relationships and of companies’ social and environmental policies and procedures, goals and targets, performance and progress.

Transparency should enable greater accountability Transparency is not just sharing the good stories nor disclosing only compliant, well-performing suppliers — it’s about presenting the full picture, both good and not-so-good, in an effort to allow for greater scrutiny by those affected and interested, and to help drive faster improvements across the supply chains. This sort of transparency requires brands and retailers to know exactly who makes the products they sell – from who stitched them right through to who dyed the fabric and who farmed the cotton. And crucially, this requires brands to trace the journey of their products right down to the raw material level. We are asking brands and retailers to share this information publicly as an important move towards greater transparency and accountability.

T R A N S PA R E N CY

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 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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Some brands opt to disclose supply chain information to selected NGOs or unions rather than publicly, and have done so for many years in order to manage their supply chain risks. However, we feel this is not enough. Health and safety incidents, widespread abuses and even deaths are still happening, despite this industry-facing disclosure.

“The knowledge that important information is being kept from people undermines trust and creates greater uncertainty."

EMILY O'REILLY EUROPEAN OMBUDSMAN, 2017

Transparency is a means to change, not an end Transparency alone is not enough to fix the industry’s problems, but it is a necessary first step towards wider systemic change. It is a way to reveal the industry’s current structures and problems, so we can better understand how to change them. Ultimately, Fashion Revolution believes that the fashion industry as a whole needs a radical paradigm shift and the way that most clothing is produced and consumed will need transformation. This means business models will need to change in a big way and a multiplicity of solutions will likely be needed.

transparency accountability change

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TO ACHIEVE CHANGE WE RECOGNISE 4 IMPORTANT THINGS:

i It’s a process

Inclusivity is key

More information is needed

Turn data into action

It is going to be a long journey towards a different industry model, requiring many incremental but necessary steps, to turn the tide of fast fashion or other unsustainable business models. We believe the first step is greater transparency. This will encourage consumers, brands and retailers, governments and citizens in supply chains to take action. Fashion Revolution is engaging with all of these groups to catalyse positive change.

Millions of workers are employed through the supply chains of these big brands, and we must be careful to ensure that future of the fashion industry is able to provide decent work, sustainable livelihoods, hope and dignity for everyone employed in it, from farm to retail.

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 and under what conditions.

Transparency isn’t just for transparency’s sake. The data and information disclosed by companies needs to be accessible, usable and detailed enough to take action upon. What we do with publicly available supply chain information, how we use it to drive positive change, is what will count most.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

VIEWPOINT

EDMUNDO LIMA CEO ABVTEX - BRAZILIAN ASSOCIATION OF TEXTILE RETAIL

Given changing consumption habits, transparency is an important part of the sustainability debate, since it fosters mature discussions amongst key organisations, the government and society as a whole about social responsibility and the role each actor plays. In our current era, where everything is hyperconnected, facts and information reach people at fantastic speeds. And, especially, customers are becoming notably empowered and more aware of the need to make choices about the impacts of their consumption. Therefore, dialogue and transparency amongst those who produce, who trade and who consume is critical, since information can be easily found on the web now. More and more, people make searches before they actually buy; consequently,

transparency makes customers identify themselves with the purpose of the brand, engaging them as brand advocates.

Although sustainability issues in the fashion industry are more recent in Brazil, they have been prioritised by retailers and the supply chain, as consumers are more conscious and demanding. ABVTEX aims at promoting transparency across the fashion supply chain, because we want to shed light on issues that need to be further addressed in debates in the fashion

industry. It is very important to think about themes such as well-being and dignity, human rights, women empowerment, racial and gender equality, environmental impacts, economic result, among others, seeking sustainable development in the industry. A few years ago, given the huge competition amongst the industry brands, we could notice some initial resistance in disclosing strategic information, since people believed it could interfere with management effectiveness and business competitiveness. However, changes in business practices are clearly observed nowadays. The stronger the movement towards transparency, the greater the positive trend towards the industryâ&#x20AC;&#x2122;s role in creating a more sustainable, accountable and fair future for fashion. By adhering to compliance best practices, businesspeople notice that transparency is paramount in the process of the fashion industry's evolution. Transparency is a way to promote brands that invest in social

responsibility and comply with applicable regulations, consequently, expanding and encouraging more sustainable opportunities. We are aware that social and environmental best practices have been creating a new scenario, with greater accountability for the benefit of the entire fashion value chain, consisting of retail networks, suppliers and consumers. These new dynamics with increased visibility is beneficial to all stakeholders, since it fosters the dissemination of best practices amongst brands, as well as fair competition, optimising processes and resources efficiency. Additionally, it raises customersâ&#x20AC;&#x2122; awareness and influences better shopping choices.

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VIEWPOINT

DARI SANTOS SOCIAL ENTREPRENEUR ALINHA INSTITUTE

We live in a world which has been increasingly connected, where relationships have gained different meanings in all senses. The connection between individual choices and collective impact, whether social or environmental impact, is more evident each day. There are dozens of examples of individual daily actions that make a huge difference when combined to other peopleâ&#x20AC;&#x2122;s actions. These changes have affected our choices, our habits and, definitely, the way we consume. We can and we should make a difference with our daily actions. However, for the changes in our consumption choices to actually have a positive impact on the world, we urgently need transparency, including guarantees of production processes.

Transparency means having all the tools and information needed to make conscious decisions. It is when we can choose a product that truly reflects our beliefs. In the fashion industry, I can see that questioning about transparency is evident; consumers increasingly question the relationship brands have with those who make their clothes. But that questioning should go way beyond just disclosing the people behind the supply chains. We need to talk about fair bargaining, in which small sewing workshops, for instance, have the chance to negotiate prices and deadlines that ensure decent working and living conditions.

A transparent brand is one that accepts collective responsibility, that does not watch global challenges passively, but rather positions itself as an active agent to promote the necessary change. It is not just about talking, or about seeking good relationships with consumers only; we need actions that actually show how those relationships occur across the entire value chain. In order to truly connect ourselves to what we consume, we need to believe the relationships built for that product to come to life were respectful, both to individuals and to nature.

I can see a different fashion emerging; I am optimistic about the possibilities of change, considering the brands are also made of people, employees, suppliers and consumers. I can see that awareness has also been incorporated into some brands, which have come to rethink (and change) their internal processes.

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ABOUT THE FASHION TRANSPARENCY INDEX

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WHY HAVE WE CONDUCTED THIS RESEARCH?

Fashion Revolution is calling for greater transparency throughout the fashion industry and our #whomademyclothes social media campaign has inspired hundreds of thousands of people to take action worldwide since 2013.

To build on this question, we wanted to create a tool that would help people better understand what transparency looks like in practice, particularly when it comes to big fashion and apparel brands and retailers. Similarly, this was how the Fashion Transparency Index was created, as a way to help people know a bit more about the brands and retailers they buy products from. Where and how are those products made? What information should we expect to find about these big brands’ policies and procedures when it comes to social and environmental issues? What can we find out about the effects of brands’ practices on the people who work in their supply chains? These are some of questions the Fashion Transparency Index considers.

Furthermore, we wanted to create: •

A comparable tool that helps stakeholders better understand how much information big brands and retailers are disclosing about their suppliers and social and environmental impacts across the value chain;

•

A tool to incentivise big brands and retailers to disclose more credible, comparable and detailed information year-on-year;

•

An ongoing exercise that helps the Fashion Revolution movement shape its own understanding of what transparency entails and what transparency demands we may ask in future from big brands and retailers.

“Our aim is to better understand the social and environmental information shared by big brands and retailers. We will use this information to drive positive change.” SARAH DITTY DIRECTOR OF POLICY FASHION REVOLUTION

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

ABOUT THE METHODOLOGY The Fashion Transparency Index uses a ratings methodology to benchmark brands’ and retailers’ public disclosure across five key areas, including: policy and commitments, governance, supply chain traceability, supplier assessment and remediation, and spotlight issues. The spotlight issues cover current topics, such as living wages, waste and female empowerment, and they can be different in each edition, according to how relevant they are to the context. The first Fashion Transparency Index methodology was created by Ethical Consumer in 20161 with input from Fashion Revolution. For 2017, Fashion Revolution took the lead on the project’s development, led by Sarah Ditty and Carry Somers, with consultative input of a diverse group of more than 20 pro bono industry experts to considerably revise the methodology over a four-month period. The group of experts consulted includes: • Dr Mark Anner, Centre for Global Workers’ Rights at Penn State University • Neil Brown, Alliance Trust Investments  • Professor Ian Cook, University of Exeter

• Orsola de Castro, co-founder of Fashion Revolution and waste expert • Subindhu Garkhel, Fairtrade Foundation  • Jenny Holdcroft, IndustriALL  • Dr Alessandra Mezzadri, SOAS, University of London  • Joe Sutcliffe, CARE International • Heather Webb, Ethical Consumer And several others experts who wished to remain anonymous at this time. The new methodology focuses exclusively on public disclosure, and the weighting of the scores was changed to emphasise increasing levels of detailed disclosure. The methodology was updated again in 2018, featuring small changes for clarity and to enable the selection of new ‘Spotlight Issues’. The methodology is based on existing international standards and benchmarks including: UN Sustainable Development Goals, UN Guiding Principles, OECD (Organisation for Economic Co-operation and Development) Due Diligence Guidelines, Ethical Trading Initiative Base Code, and Fair Labor Association’s Freedom

of Association guidelines. It has also been developed to align as much as possible with other industry benchmarks and relevant initiatives including the Transparency Pledge, Corporate Human Rights Benchmark and Know The Chain. Adapting the methodology to the Brazilian context To implement Fashion Transparency Index Brazil, Fashion Revolution Brasil relied on the technical support of FGVces (Centre for Sustainability Studies at Getulio Vargas Foundation), who helped adapt the methodology to the Brazilian context and conducted the research.

for immigrants in the fashion supply chain. There were only a few adjustments, so as to rigorously keep the analysis processes without impairing the general comparability of results with the global methodology. Additionally, with FGVces support, the Brazilian brands were selected for assessment. Selection criteria are further described in the report. We recognise that the methodology is not perfect and can always be improved. We welcome any feedback on how to make it better. For further detail, download the Brazilian questionnaire template sent to the brands in this edition.

Both the content and the structure of the questionnaire were revised in order to adjust it to the Brazilian context. Adjustments were particularly necessary under the ‘Spotlight Issues’ section, where it is possible to select emerging and urgent issues according to the local context. After having researched and talked to different experts in the Brazilian industry, we determined it would be important to incorporate into the agenda issues such as racial equality and working conditions

1 Ethical Consumer is a non-for-profit printed magazine and website which publishes information on the social, ethical and environmental behaviour of companies and issues around trade justice and ethical consumerism.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

THE METHODOLOGY

1. POLICY & COMMITMENTS - What are the brand’s social and environmental policies? - How is the brand putting its policies into practice? - How does the brand decide which issues to prioritise? - What are the brand’s future goals for improving its impacts?

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

- Who in the brand is responsible for the brand’s social and environmental impacts?

- Does the brand publish a list of its suppliers, from manufacturing to raw material level?

- How does the brand assess the implementation of its supplier policies?

- What is the brand doing across its operations to address the following:

- How does the brand fix problems when found in its supplier facilities?

• Gender equality and female empowerment

- How can they be contacted? - How does the brand incorporate human rights and environmental issues into its buying and sourcing practices?

- If so, how much detail do they share?

- Does the brand report supplier assessment findings? - How can workers report grievances?

• Racial equality • Immigrant workers • Freedom of association • Payment of living wages • Overproduction and overconsumption • Waste and recycling

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WEIGHTING OF THE SCORES

POLICY & COMMITMENTS

TOTAL POSSIBLE POINTS (250) WEIGHTING (%)

As the methodology focuses exclusively on public disclosure, the weighting of the scores is intended to emphasise increasing levels of detailed disclosure, especially when it comes to publishing supplier lists and the results of supplier assessments and audits.

GOVERNANCE

TRACEABILITY

Please be aware that when brands score zero on an individual indicator, it doesn’t necessarily mean anything bad. It just means they’re not disclosing their efforts publicly.

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

19%

34%

30%

12%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

HOW DOES THE SCORING WORK? How brands and retailers receive points Points are awarded only based on public disclosure via published communications from the following places: • On the company’s website(s); • In annual reports or annual sustainability/ CSR (Corporate Sustainability Reports) (only counted if dated January 2016 or later) published on the company website(s); • In any other documents which are publicly available and can be downloaded freely from the company’s website(s); • Via third party websites but only when linked to directly from the company’s own website (i.e.; there is a direct link from the company’s website to the third party website.)

Other aspects to consider Brands’ and retailers’ individual scores are not as important as the ranges in which they have scored. Although we have designed the methodology to be as objective and comparable as possible, it is not always easy to fit complex and nuanced issues into one simple and uniform methodology. Therefore, we want to stress that you use the Fashion Transparency Index findings to reflect on general trends in transparency and information disclosure patterns rather than focus on whether brands scored a point higher or lower than another brand overall or in any particular area. Furthermore, there is no common template that brands and retailers use for reporting on social and environmental issues. Some companies produce annual reports containing over 300 pages, each in a specific format, which opens up space for a margin of error, both when collecting and when comparing data. However, our research team endeavoured to be as thorough, accurate and fair as possible. Thus, all averages in this report represent the mean.

How the research is conducted The team starts the research process by making a preliminary assessment of publicly disclosed information about each brand. Then, the questionnaires are sent to each brand so they can help us identify information that may not have been found. To produce this Index, brands were given approximately one month to complete the questionnaire. The completed questionnaires were once again analysed by our team and new scores were awarded where appropriate.

Q UESTIO NNA IR E R ES P O NS E

60%

40%

Of brands completed and returned the questionnaire

Did not respond or declined the opportunity to complete the questionnaire

Some brands chose not to participate in the assessment process. However, we would like to note that our team researched and scored brands regardless of whether they completed the questionnaires or not, since the methodology is solely based on publicly disclosed information. On the other hand, brands that engaged in the process are more likely to receive higher scores, both because they had the chance to alert researchers about further information they might not have found previously, and for the possibility of adding new information to their platforms. The research was conducted by Fashion Revolution Brasil and FGVces teams between May and July 2018. Should you know of any remaining inaccuracies, please contact us at brasil@fashionrevolution.org and we will take this into account for the next edition.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

Scope of the research

Limitations of the research

The Fashion Transparency Index has been designed to give an illustrative look at how much brands know and share about their supply chains. We have deliberately chosen to focus specifically on transparency by means of public disclosure and not everything that brands and retailers are doing internally or otherwise behindthe-scenes across their companies and supply chains. Brands and retailers may very well have excellent policies and programmes in place internally, but if they’re not shared publicly then they’re not counted in this research.

There are limits to desk-based research like this one, and only on-the-ground research by NGOs, unions and academics can reveal the true impacts of brands’ policies and practices in real-world situations. Therefore, by encouraging brands and retailers to become more transparent, the Fashion Transparency Index hopes to facilitate the work of these groups throughout the country.

"Transparency is the cornerstone of credibility."

What is beyond the scope The Index does not offer an in-depth analysis of the content, quality or accuracy of a company’s policies, procedures, performance and progress in any given area. Verification of claims made by brands and retailers is beyond the scope of this study. We have designed the methodology to provide insights that reveal patterns of disclosure, are comparable over time and allow brands to see where they stand on transparency compared to their peers.

SUBINDU GARKHEL COTTON MANAGER FAIRTRADE FOUNDATION

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

CRITERIA TO SELECT BRANDS

The process to select the brands assessed was jointly conducted by Fashion Revolution Brasil and FGVces teams, based on the assumption that the Fashion Transparency Index Brazil would assess 20 brands. We are aware the volume of the sample is not enough to represent the situation of the country as a whole. Thus, we chose brands from different segments, aiming to analyse the sector diversity. Thus, distribution includes retail segments, denim, high street, luxury, adults, footwear, sportswear and beachwear.

Brands have been chosen in each segment on the basis of research on their relevance, taking into account three factors: annual turnover; diversity of segments in the industry; and positioning as top of mind awareness1. In cases where information found refers to a group that holds different brands, we selected a brand or brands that appear to be the most significant in terms of turnover and consumers top of mind awareness.

1 ‘Top of mind awareness’ is a term used to refer to a brand being first in customers’ minds.

THE 20 SELECTED BRANDS

•

A NIMA LE

•

MALWEE

•

BROOKS F ILED

•

MAR I SA

•

C& A

•

MELI SSA

•

CIA . MA RÍTIMA

•

MO LECA

•

ELLUS

•

O LYMPI KUS

•

FA RM

•

OSKLEN

•

HAVA IA NA S

•

PER NAMB UCANAS

•

HERING

•

R ENNER

•

J OHN J OHN

•

R I ACH UELO

•

LE LIS BL A NC D EUX

•

Z AR A

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

THE FINAL SCORES To download the full spreadsheet of results, click HERE

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

A ROUGH GUIDE TO THE SCORING

0—10%

11—20%

Questionnaires sent to brands allow for up to 250 possible points, which we have converted into percentages. We deliberately chose to group brands into score ranges because we want readers to focus on emerging patterns and trends of company disclosure rather than individual scores.

21—30%

31—40%

41—50%

51—60%

61—70%

71—80%

81—90%

91—100%

TRANSPARENCY Brands scoring between 0-5% are disclosing nothing at all or a very limited number of policies, which tend to be related to the brand’s human rights issues or local community engagement activities. Brands scoring between 5-10% are likely to be publishing some policies for both their own employees and suppliers. Those closer to 10% are likely to be publishing a basic supplier code of conduct and some detailed information about their procedures and procedures and supplier assessment approach.

are disclosing nothing at all or a very limited number of policies, which tend to be related to the brand’s human rights issues or local community engagement activities. Brands scoring between 5-10% are likely to be publishing some policies for both their own employees and suppliers. Those closer to 10% are likely to be publishing a basic supplier code of conduct and some detailed information about their procedures and procedures and supplier assessment approach.

are likely to be publishing much more detailed information about their policies, procedures, social and environmental goals and supplier assessment and remediation processes. These may be publishing a supplier list but not with many details other than factory name and address. These brands will not widely be disclosing information on the Spotlight Issues.

40% are the brands who are publishing supplier lists 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 addressing a few of the Spotlight Issues, such as capacity building for female supply chain workers, procedures for payment of living wages and/or solutions to address textile and clothing waste.

Brands scoring over 40% are those who are most likely to be publishing more detailed supplier lists, some 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 general assessment findings. These brands are also more likely to be addressing the Spotlight Issues such as the gender pay gap, capacity building for female supply chain workers, procedures for payment of living wages, solutions to address textile waste and investment in circular resources.

Brands scoring 51-60% are disclosing all of the information already described in the other ranges and will be publishing detailed supplier lists which include manufacturers as well as processing facilities. These brands will be publishing the vast majority of policies, procedures and future goals.

No brands scored above 60%, but if they did these brands would be disclosing all of the information already described as well as publishing detailed information about assessment and remediation findings for specific facilities and detailed supplier lists from manufacturing right down to raw materials. These brands would also be mapping their social and environmental impacts into their business models and providing details about the company’s gender and racial pay gap, number of women in executive and management roles, and how women’s and immigrants’ issues are being addressed in the supply chain.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

THE FINAL SCORES 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

PERNAMBUCANAS

10%

HERING

17%

RENNER

26%

ZARA

40%

C&A

53%

BROOKSFIELD

ANIMALE

15%

RIACHUELO

23%

HAVAIANAS

36%

MALWEE

51%

CIA MARÍTIMA

FARM

15%

OSKLEN

34%

ELLUS

MARISA

13%

JOHN JOHN

LE LIS BLANC DEUX

MELISSA

MOLECA

OLYMPIKUS

*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.

71 - 80%

81 - 90%

91 - 100%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

OVERALL ANALYSIS Still a long way to go towards transparency

Riachuelo have also scored above the overall average of 17%, in the 21%-30% range.

The overall average score amongst the 20 brands and retailers is 17%, or 42 out of 250 total possible points. This shows that there is still a long way to go towards transparency.

Many big brands and retailers lack transparency

However, these overall averages should not be read as a definite result. On the contrary, current results for the 4 companies that had already participated in the 2017 global Index – C&A, Casas Pernambucanas, Renner and Zara – show an average growth of 38% in their level of transparency this year. This is good news and indicates that major brands are making significant efforts to share more information about their suppliers and social and environmental policies and practices. Two brands lead the path towards greater transparency amongst the major corporate players C&A and Malwee top the Index at 53% and 51% respectively, in the overall result, and are the only ones in the 51-60% range. Zara, Havaianas and Osklen are shortly behind in the 31%-40% range. Renner and

From the 20 brands assessed, 8 (40%) have scored 0%, which brought down the overall average score. It does not mean they do not adopt best practices and initiatives; it is just that they are not sharing this information publicly. Where brands and retailers are more transparent We found publicly available information in 12 (60%) out of the 20 brands and retailers in the Index, and all of them scored highest in the first section of the questionnaire, the one about Policies and Commitments. Interestingly, 12 brands have a policy on discrimination related to the company’s company’s own operations (applicable to the head office, retail stores, warehouses and their own manufacturing facilities). On the other hand, only 2 brands publish policies on animal welfare or annual leave and public holidays.

In the questionnaire section that covers human rights and environmental policies targeted at suppliers, 12 brands publicly disclose a clear policy on forced or bonded labour and child labour. But only 2 brands disclose policies on energy efficiency and carbon emissions. Only 3 out of those 12 brands and retailers publish an annual sustainability or corporate social responsibility report that has been audited or verified by an independent third-party. Female empowerment and gender equality Only 7 (35%) of the companies assessed disclose projects, strategies, guidelines or data related to issues such as support for gender equality, female empowerment and fight against gender-based discrimination and violence. Those same brands and retailers also disclose their annual percentage of women in executive and management positions within the company, but only 1 publishes the annual gender pay gap within the company.

Information shared by major brands and retailers is often shallow and difficult to navigate Some of the conclusions drawn in the global Index reports are also reflected on this analysis of the Brazilian Index, among them the fact that, while we are seeing brands begin to publish more about social and environmental issues — which is welcome and totally necessary — there is still much crucial information about their practices that remains concealed. Far more space is given to brands and retailers’ values and beliefs than to their actions and outcomes. When it comes to comprehensive, comparable, detailed data disclosure about their supply chains, the type of information that enables greater accountability for environmental and working conditions, not enough is being made publicly available. Public disclosure of supply chain information is often buried in brands and retailers’ websites, housed on external sites, in 300+ page annual reports or simply not available at all. You would need a lot of time to find the relevant information and would require nuanced knowledge to make sense of the types of information that brands and retailers typically disclose.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

OVERALL ANALYSIS

There is still a lack of consistent standards for reporting on social and environmental issues. There is no common template. Brands present information in many different formats, using all sorts of language and using an array of different visuals. No wonder even the most conscious consumers find it all so confusing. How are we supposed to make informed decisions about what we buy when the information is either entirely absent or presented in such varied and diffuse ways? What is most needed is for governments to legally require that brands and retailers disclose supplier lists and social and environmental information using a common framework. Without this, brands will continue to willingly publish only selected information and in whatever format they determine best. See page 63 (GOVERNMENTS AND POLICYMAKERS) for further explanation.

Transparency is a means to change, not an end.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

QUICK FINDINGS Not a single brand scored above 60%

8 brands scored 0%

Average score is 17%

Nยบ OF BRANDS

Only 2 brands scored more than 50%

0-10

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 BRAZIL | 2018

THE SCORES ACROSS THE 5 SECTIONS

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

AVERAGE SCORES ACROSS THE SECTIONS

32%

1. POLICY & COMMITMENTS C&A was the brand with the highest score in this section, with a total of 94%, achieving 45 out of all 48 possible points. Among the 13 brands which disclosed information in this section, Ellus was the one with the lowest score, achieving 1% of all possible points. The information Ellusâ&#x20AC;&#x2122; discloses related to this section was about a community support project.

32%

12%

11%

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

Among the 20 brands reviewed, 10 scored in this section and 5 (25%) of them scored above 60%. C&A scored 100% of all possible points, meaning it is publicly disclosing who in the team is responsible for social and environmental issues, along with their contact details. Additionally, it informs who in the board level is accountable for issues related to human rights and the environment, as well as how other staff and suppliers are incentivised to improve their social and environmental performance.

Five brands (25%) are publishing supplier lists with information about tier 1 (CMT) factories and 5 (25%) are disclosing data about processing facilities beyond tier 1. Havaianas, Osklen and C&A fall in the 41-50% range, Malwee had the highest score in this section, achieving 71% of all possible points. Havaianas, Malwee and Osklen are the only brands publishing some information on their suppliers at the raw material level. C&A, Malwee, Renner and Zara disclose they are tracing one or more raw materials using specific certifications.

The highest concentration of brands (6) fall in the 11-20% range in this section, and none scored above 30% of all possible points. Brands usually disclose information about the processes they adopt to assess suppliers and the criteria they use to take on new facilities before production starts. However, there is barely any information published on the findings of those assessments or the description and status of remediation processes in case any issue is found.

12%

5. SPOTLIGHT ISSUES Out of the 9 brands (45%) that scored in this section, 4 fall in the 21-30% range. Only 2 brands scored above that range - C&A, with 43%, and Zara, with 53% of all possible points in this section. It means these brands publish more information about their efforts to address issues such as gender equality, collective bargaining and freedom of association as well as textile recycling, clothing waste and circular resources.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

1. POLICY & COMMITMENTS APPROACH What are the brands’ and retailers’ human rights and environmental policies and procedures for their own workforce and suppliers?

We looked at the following issues: • Water Effluents & Treatment • Anti-bribery, Corruption & Presentation of False Information

• Freedom of Association, Right to Organise & Collective Bargaining • Restricted Substance List

• Harassment & Abuse

• Foreign & Migrant Labour

• Notice Period, Dismissal & Disciplinary Action

• Overtime Pay

• Animal Welfare

• Waste & Recycling (Packaging/Paper/Retail)

• Biodiversity

• Waste & Recycling (Product/Textile)

• Community Engagement

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

• Living Conditions/ Dormitories • Contracts & Terms of Employment • Maternity Rights / Parental Leave • Discrimination • Diversity & Inclusion • Energy & Carbon Emissions • Equal Pay • Annual Leave & Public Holidays • Working Hours & Rest Breaks

• Health and Safety • Sub-contracting, Outsourcing & Homeworkers • Forced and Bonded Labour • Child Labour • Water Usage & Footprint

Social & environmental priorities and goals for the future In this section, we also looked at whether brands and retailers are disclosing their top human rights and environmental priorities (often in the form of a materiality matrix). Certain issues will be more relevant and of higher risk or importance to brands and their stakeholders than others. We also looked to see whether brands and retailers are publishing their goals or a strategic roadmap for improving social and environmental impacts across the supply chain. We only counted these goals if they were reaching into the future, time-bound and measurable. Brands also scored an additional point if progress was reported annually. Finally, we looked to see if brands and retailers have their annual sustainability or corporate social responsibility (CSR) reports audited by an independent third-party organisation.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

1. POLICY & COMMITMENTS 0 - 10%

11 - 20%

ELLUS

BROOKSFIELD

CIA MARÍTIMA

JOHN JOHN

LE LIS BLANC DEUX

MELISSA

MOLECA

OLYMPIKUS

MARISA

21 - 30% 16%

31 - 40%

ANIMALE

29%

FARM

29%

PERNAMBUCANAS

41 - 50% 31%

51 - 60%

HERING

49%

OSKLEN

44%

*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.

HAVAIANAS

61 - 70% 56%

71 - 80%

RIACHUELO

70%

MALWEE

68%

RENNER

66%

81 - 90% ZARA

91 - 100% 86%

C&A

94%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

1. POLICY & COMMITMENTS FINDINGS 12

Forced & bonded labour

Child labour

Freedom of association, right to organise & collective bargaining

APPLYING TO BRANDâ&#x20AC;&#x2122;S OWN EMPLOYEES

Health & safety Anti-bribery, corruption, & presentation of false information

Discrimination

9 5

Wages & financial benefits (e.G. Bonuses, insurance, social security, pensions)

11 12

9 9

Sub-contracting, outsourcing & homeworkers

Harassment & abuse

Working hours & rest breaks

Notice period, dismissal & disciplinary action

IN SUPPLIER CODE OF CONDUCT

7 7

Foreign & migrant labour

Overtime pay

Water effluents & treatment

Waste & recycling (product/textiles)

living conditions/dormitories

Contracts & terms of employment

5 4

Community engagement

Biodiversity Maternity rights & parental leave

Equal pay

3 2

Annual leave & public holidays

11 5

3 3

Water usage & footprint Energy & carbon emissions

Animal welfare

7 6 10

Diversity & inclusion

Restricted substance list

Waste & recycling (packaging/office/retail)

1. Graph ordered by most common policies that apply to suppliers / 2. Policies on Treatment of Wastewater; Living Conditions / Dormitories; Foreign & Migrant Labour; Overtime Payment; Sub-contracting, Outsourcing & Homeworkers; Forced and Bonded Labour; and Child Labour were assessed only when applicable to suppliers. Policies on Animal Welfare; Diversity & Inclusion; Restricted Substance List; Waste and Recyling of Different Materials were assessed only at the level of policies targeted at the companyâ&#x20AC;&#x2122;s own employees.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

1. POLICY & COMMITMENTS FINDINGS

60% of brands publish a Discrimination policy that applies to employees

60% of brands publish a Child Labour policy that applies to suppliers

60% of brands publish a Forced or Bonded Labour policy that applies to suppliers

50% of brands disclose how their Forced or Bonded Labour policy is put into practice

15% of brands publish an Equal Pay policy

20% of brands disclose how their Equal Pay policy is put into practice

30%of brands disclose material impacts on human rights and the environment (materiality matrix)

35% of brands publish measurable, time-bound, long-term goals on improving their human impact

30% of brands publish measurable, time-bound, long-term goals on improving their environmental impact

20% of brands publish an up-to-date annual disclosure of progress towards achieving those goals

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

1. POLICY & COMMITMENTS IMPLICATIONS

Brands and retailers widely publish policies on human rights Over half of brands and retailers disclose policies on child labour (60%), forced labour (60%), discrimination (60%), and harassment and abuse (55%) - issues that represent some of the most egregious violations of human rights in the supply chain. Detailed environmental policies not often part of Supplier Codes of Conduct Many brands and retailers do not publish specific environmental policies for their suppliers. Only 2 brands (10%) disclose policies aimed at suppliers on carbon emissions and energy reduction; 3 (15%) publish policies on biodiversity protection; 6 (30%) publish policies on water effluents and treatment; and only 3 (15%) publish policies on water consumption at supplier facilities. Finally, just 6 (30%) publish a policy on textile waste and recycling.

Few policies and procedures disclosed on Sub-contracting and Foreign & Migrant Labour We are aware that lack of control over sub-contracting may open up room for poor working conditions and human rights violations, including child labour. Additionally, it is worth noting a strong presence of an immigrant workforce in the Brazilian fashion industry, usually coming from neighbouring countries in search of better life conditions. Unauthorised subcontracting has involved many brands and retailers in situation of forced or bonded labour and, in spite of being a great challenge to tackle, less than half of the brands and retailers (45%) publish a policy on subcontracting, outsourcing and/ or homeworkers in the supply chain. And only 20% disclose how those policies should be put into practice. Concerning foreign and migrant workforce, only 35% of brands and retailers publish information on their policies, and just 15% disclose how those policies are put into practice.

Less than half of brands and retailers publish social and environmental goals Less than half of brands and retailers (35%) publish measurable, time-bound goals on improving human rights across their value chain, and 30% publish goals on improving environmental impacts. Only 20% are reporting on the progress theyâ&#x20AC;&#x2122;re making towards achieving these goals. Low level of independent verification of social and environmental reporting Only 15% of brands and retailers are publishing an annual sustainability or corporate social responsibility (CSR) report in which the non-financial information is audited or verified by an independent third party. Auditing has typically been done by big consulting firms in the industry. Amongst brands and retailers that are publishing an annual report verified by a third party, there is usually more information about their policy and commitments than on how they govern sustainability issues, who their suppliers are, how they are assessing their suppliers and mainly the results of these assessments.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

2. GOVERNANCE APPROACH

Who is responsible for the companyâ&#x20AC;&#x2122;s social and environmental impacts? In this section, we were looking for the name and role of the person with lead responsibility in the company for human rights and the environment. We also scored the brands and retailers on whether they published the contact details for this person, or at least contact details for a relevant department such as the sustainability/ corporate social responsibility (CSR) team. We also looked for the name of a board member or board committee who is responsible for human rights and environmental issues and how their oversight is implemented. This is often the remit of an Ethics or Sustainability Committee at board level.

Employee and supplier incentives Finally, we looked to see if brands are disclosing how their employees beyond the sustainability/CSR team (designers, buyers, sourcing managers, etc.) are incentivised (through performance targets or bonuses) to achieve improvements in social and environmental impacts. We also looked for the same sort of incentives (such as long-term sourcing commitments) tied to suppliersâ&#x20AC;&#x2122; social and environmental improvements.

"Now, in the hyper-connected and ever evolving world, transparency is the new power."

BENJAMIN HERZBERG PRIVATE SECTOR ENGAGEMENT FOR GOOD GOVERNANCE WORLD BANK INSTITUTE

38 FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

2. GOVERNANCE 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

71 - 80%

HAVAIANAS

54%

ANIMALE

69%

MALWEE

54%

FARM

69%

CIA. MARÍTIMA

MARISA

54%

RENNER

62%

ELLUS

RIACHUELO

54%

JOHN JOHN

LE LIS BLANC DEUX

MELISSA

MOLECA

OLYMPIKUS

PERNAMBUCANAS

OSKLEN

BROOKSFIELD

HERING

*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.

46%

ZARA

81 - 90% 77%

91 - 100% C&A

100%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

2. GOVERNANCE FINDINGS CAN YOU GET IN TOUCH?

50% of brands publish contact details for the sustainability/CSR department

50% of brands disclose name/role of individual with lead responsibility

ACCOUNTABILITY

30% of brands disclose name of the board member or board committee responsible for human rights and environmental issues on their website

40% of brands publish contact details for that individual

25% of brands publish contact details on their published supplier list

PURCHASING PRACTICES

Only 15% of brands publish a description of how board accountability is implemented in practice

20% of brands disclose incentives tied to improvements in human rights and environmental performance for staff beyond the sustainability team

Only 15% of brands disclose incentives tied to improvements in human rights and environmental performance for suppliers

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

2. GOVERNANCE IMPLICATIONS Getting in touch with brands and retailers Out of the 20 brands and retailers reviewed, 10 (50%) publish contact details - usually an email address - for the corporate social responsibility or sustainability team, meaning anyone can get in touch with questions or comments about the company’s practices. This should be a really basic thing for brands and retailers to do and shows that they’re willing to hear anyone’s concerns and feedback. Some brands and retailers (40%) go a step further and publish the contact details of a specific person who is responsible for environmental and human rights issues at the company.

"Transparency can help companies embed better working practices internally, as being more transparent means holding up a mirror to their own practices."

DEBBIE COULTER ETHICAL TRADING INITIATIVE

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

3. TRACEABILITY APPROACH

Are brands disclosing their suppliers? How detailed is this information?

Disclosing factories, processing facilities and raw material suppliers

This section focused on whether brands are publishing lists of their suppliers and what level of detail brands are disclosing about these suppliers.

We looked for supplier lists at three levels. The first one indicates where brands make their clothes - e.g. the facilities with which brands typically have a direct relationship and often do the cutting, sewing and final trims of products. In the second level, we wanted to find out if brands are disclosing information on their processing facilities - e.g. from ginning and spinning, through to subcontractors, dye-houses, laundries, wet processing, embroidering, printing and textile finishing. And, in the last level, we assessed whether brands are disclosing their suppliers of raw materials - e.g. primary substances such as fibres, hides, rubber, dyes and metals.

We wanted to find out if brands are sharing information such as: • The address of the supplier facility; • The types of products/services made in each supplier facility; • Approximate number of workers at each site; • Gender breakdown of workers; • Race breakdown of workers; • % of migrant or contract workers; • Scope and date when the information was last updated.

We gave extra points if supplier lists are made available in a searchable format, cover more than 95% of their suppliers and have been updated within the past 12 months.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

3. TRACEABILITY 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

RENNER

MARISA

14%

HAVAIANAS

49%

ANIMALE

ZARA

12%

OSKLEN

49%

BROOKSFIELD

C&A

48%

CIA. MARÍTIMA

ELLUS

FARM

HERING

JOHN JOHN

LE LIS BLANC DEUX

MELISSA

MOLECA

OLYMPIKUS

PERNAMBUCANAS

RIACHUELO

*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.

61 - 70%

71 - 80% MALWEE

81 - 90% 71%

91 - 100%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

3. TRACEABILITY FINDINGS WHO’S PUBLISHING TIER 1 SUPPLIER LISTS?

25% of brands are publishing tier 1 supplier lists

15% include the facility address

25% include the types of products made / services provided in the facility

20% include the approximate number of workers at each site

None includes race or gender breakdown

15% of brands are publishing their raw material suppliers

Only 1 brand includes an address for their raw material suppliers

20% of brands are tracing at least one of their raw materials back to source

WHO’S PUBLISHING BEYOND TIER 1?

25% of brands are publishing their processing facilities

15% include the processing facilities address

None includes the percentage of migrant or contract workers

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

3. TRACEABILITY IMPLICATIONS

This section is where most scores can be achieved in the entire questionnaire, with 85 possible points out of 250 total, which accounts for 34% of the total score. It is worth noting that tier 1 lists sometimes include subcontractors of direct suppliers, because brands and retailers tend to define the different tiers of the supply chain differently. But, for this methodology, we are referring to the facilities involved in the final stages of production, meaning the suppliers who typically have a direct contractual relationship with the brand or retailer. Level of information detailing about suppliers Six brands (30%) are publishing their list of suppliers and, among them, 5 (25%) disclose their Tier 1 suppliers along with the products/services they provide, but only 3 (15%) include a street address for their facilities. Four brands (20%) include an approximate number of workers at each facility, but none of them shows a race or gender breakdown, or the percentage of migrant or contract workers.

Only 4 brands (20%) are publishing Tier 1 suppliers and processing facilities in a searchable format, (i.e. table or spreadsheet) making it much more user-friendly for trade unions, journalists and NGOs. The rest of the publishing brands opt for formats such as interactive online maps or expandable dropdown menus on their website. Going beyond Tier 1 Among the brands that publish their lists, 5 (25%) disclose at least some of their processing facilities, 4 (20%) include the products/services they provide, and only 3 (15%) indicate the street address for their facilities. Although four brands (20%) disclose an approximate number of workers at each facility, none of them shows a race or gender breakdown, or the percentage of migrant or contract workers. Only 3 (15%) brands are disclosing their raw material suppliers, including the type of raw materials, products or services they provide, but only one of them provides the street address of the facilities. Among them, 4 (20%) are disclosing whether the company is tracing one or more specific certified raw material.

Aligning with the Transparency Pledge

For future consideration

We have aligned the Fashion Transparency Index methodology with most of the requirements of the Transparency Pledge, which is endorsed by a global civil society coalition and outlines a standard approach for the disclosure of manufacturing lists by major apparel and footwear companies.

How brands and retailers will go about disclosing their raw materials suppliers is ripe for further industry-wide discussions. There are debates emerging around the sensitivity of disclosing farms, which in smallholder farming situations may be someone’s home as well as place of work.

The Transparency Pledge requires that: “The company will publish on its website on a regular basis (such as twice a year) a list naming all sites that manufacture its products. The list should provide the following information in English: The full name of all authorized production units and processing facilities; the site addresses; the parent company of the business at the site; type of products made at each site; and the number of workers at each site. Companies will publish the above information in a spreadsheet or other searchable format.” The only aspect we have not included in the Fashion Transparency Index is parent company information, which we will consider adding to the next edition.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

4. KNOW, SHOW & FIX APPROACH

How are brands assessing the implementation of their policies? Do they share the results of these assessments?

We award points if brands disclose: • The decision-making process for taking on new suppliers; • How frequently assessments are conducted (e.g. every 12 months); • If assessments are announced, semi-announced or unannounced; • If assessments are doublechecked for accuracy; • And whether assessments include worker representatives, unions or workers’ rights NGOs.

Know

Show

Fix

We checked how brands go about assessing suppliers to make sure they’re meeting their policies (typically factory audits). We looked for a description of the criteria to take on new production facilities and supplier assessment processes.

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).

Finally, we looked at what information brands are publishing about how they fix problems in factories when discovered through the assessment process. Additionally, we looked for information about what brands do with outstanding orders when problems are being addressed or are not fixed at all. We also aimed to find out whether brands have confidential whistleblowing procedures in place for both their own employees and for outsourced workers, and if they are disclosing the results of these efforts to fix problems found in factories (typically, these are called Corrective Action Plans).

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

4. KNOW, SHOW & FIX 0 - 10%

11 - 20%

21 - 30%

31 - 40%

MARISA

HAVAIANAS

20%

ZARA

30%

BROOKSFIELD

HERING

15%

C&A

27%

CIA. MARÍTIMA

RIACHUELO

15%

MALWEE

24%

ELLUS

PERNAMBUCANAS

14%

OSKLEN

24%

JOHN JOHN

ANIMALE

11%

RENNER

22%

LE LIS BLANC DEUX

FARM

11%

MELISSA

MOLECA

OLYMPIKUS

41 - 50%

*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.

51 - 60%

61 - 70%

71 - 80%

81 - 90%

91 - 100%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

4. KNOW, SHOW & FIX FINDINGS SUPPLIER ASSESSMENT

50% of brands disclose their criteria for taking on new facilities before production starts

45% of brands disclose their process for assessing conditions in supplier facilities

40% of brands disclose how frequently assessments are conducted

45% of brands disclose if assessments are announced, semi-announced or unannounced

Only 10% of brands disclose if the assessments include worker representatives, unions, or workersâ&#x20AC;&#x2122; rights NGOs

ADDRESSING PROBLEMS

35% of brands disclose the process for remediation when non-compliances are found in a supplier facility

50% of brands publish a description of their whistleblowing mechanism for their own employees

60% of brands publish a description of their whistleblowing mechanism for supply chain workers

40% of brands include their whistleblowing mechanism in the Supplier Code of Conduct

Only 1 brand discloses how outsourced workers are informed about the whistleblowing mechanism

20% of brands publish summarised findings of their supplier assessments at tier 1

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

4. KNOW, SHOW & FIX IMPLICATIONS Know: Less than half of the brands and retailers describe how they assess suppliers’ facilities

audits amongst major industry players continues worldwide, and our plan is to monitor its progress.

Nine brands and retailers (45%) publish a description of their factory and supplier audit processes, and 8 (40%) disclose how often the assessments are conducted, which is typically at least annually. Thus, they check to see if their suppliers are complying with the local law, international labour and environmental standards and if they are implementing their policies (those reviewed in section one).

Show: Publishing supplier assessments can drive improvements

Among them, 4 (20%) publish summarised findings of their supplier assessments at Tier 1. But only 2 (10%) disclose whether their factory audit processes include worker interviews and/or involvement of trade unions or worker rights NGOs. Factory audits are only one important tool for assessing and monitoring supplier’s performance on social and environmental issues. Although many industry experts have come to agree that factory inspections are an important first step in making factories and workers safer, they are not enough. The debate around the usefulness of factory audits centres around a variety of contentious issues such as double books, falsified records, coached worker interviews, corrupt or inadequate auditors, meaningless tick-box exercises etc. The discussion about

International examples prove that when the results of factory audits are made publicly available, they can drive improvements in safety standards and reduce noncompliance with labour-related issues, as has been the case with the Bangladesh Accord on Building & Fire Safety, the Alliance for Bangladesh Worker Safety and the Better Factories Cambodia Transparency Database (BFC). BFC now contains information for over 800 assessments covering 450 factories representing 78.2% of the garment factories in Cambodia that possess licenses to export. Since compliance data for specific factories has been shared publicly, BFC reported a 46% increase in the number of factories in compliance with critical issues. After information was disclosed publicly, compliance improved by 2 to 17% across a range of different areas. This shows quite clearly that the disclosure of results can be an important driver of positive change, actually improving working conditions in factories.

Show: A few brands publish summaries of supplier assessment results Four (20%) out of the 20 brands and retailers are publishing a summary of their factory audit findings at Tier 1 supplier factories, and 3 (15%) brands and retailers are disclosing audit results at processing facilities. Only 1 (5%) brand is publishing, not only a summary of its raw material suppliers, but also the result of audits in at least one specific factory at processing facilities and raw material suppliers. Fix: Half of brands publish a whistleblowing hotline for their employees Half of brands and retailers disclose a whistleblowing hotline or grievance mechanism for their own employees, and 60% disclose a grievance mechanism for workers in the supply chain. However, only 40% of brands include this grievance mechanism in their Supplier Code of Conduct. A grievance mechanism is a formal complaint process that can be used by workers, communities and/or civil society organisations that are being negatively affected by certain business activities and operations. Therefore, those mechanisms are not of much use if people don’t know they exist.

The UN Guiding Principles on Business and Human Rights (UNGPs) state that: “To make it possible for grievances to be addressed early and remediated directly, business enterprises should establish or participate in effective operational-level grievance mechanisms for individuals and communities who may be adversely impacted.”The UNGPs spell out that workers should be able to engage the company “directly in assessing the issues and seeking any remediation of harm.”

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

5. SPOTLIGHT ISSUES: WOMEN. WORKERS. WASTE APPROACH

Each year, the global Fashion Transparency Index focuses on different “Spotlight Issues” and, in 2018, the global team has chosen to focus on three issues in deeper detail: women; workers; and waste. These topics have been chosen to align with some of the UN Sustainable Development Goals (SDGs). In order to adapt the global questionnaire to the Brazilian context, in addition to keeping the items listed above, the Fashion Transparency Index Brazil team determined it would be important to add two themes to the ‘Workers’ section that deserve a more careful assessment in the country: racial equality and nationality-based discrimination.

Women

Workers

Waste

We assessed how brands and retailers are tackling gender-based discrimination and violence in supply chains, supporting gender equality and promoting female empowerment in their own company and in the supply chain.

We assessed how brands and retailers are supporting the payment of living wages1 to their employees and workers in the supply chain and how they’re ensuring that supply chain workers are able to unionise and collectively bargain.

We assessed information on what brands and retailers are doing to tackle pre- and post-consumer textile waste and recycling, as well as initiatives that aim to increase resource efficiency and help to move towards a circular economy.

We also assessed information on distribution and salary discrepancies according to race in the company, as well as whether brands are publishing actions to foster racial equality internally and the regularisation of immigrant workers across their supply chains.

1 ”Living wages” are wages that allow for a decent standard of living for workers and their families, high enough to meet their basic primary needs, such as food, shelter, clothing, education and health care. They are typically higher than minimum wages or the poverty line wages. Estimates for living wages vary from one region to another, and guideline on this matter is provided by governmental and international agencies, academic organizations and/or NGOs (ILO, 2011).

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

5. SPOTLIGHT ISSUES 0 - 10%

11 - 20%

21 - 30%

31 - 40%

MALWEE

30%

RENNER

30%

BROOKSFIELD

FARM

23%

CIA. MARÍTIMA

RIACHUELO

23%

ELLUS

HAVAIANAS

JOHN JOHN

LE LIS BLANC DEUX

MARISA

MELISSA

MOLECA

OLYMPIKUS

PERNAMBUCANAS

OSKLEN

HERING

ANIMALE

20%

41 - 50% 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.

51 - 60% 43%

ZARA

61 - 70% 53%

71 - 80%

81 - 90%

91 - 100%

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

5. SPOTLIGHT ISSUES FINDINGS WASTE

WOMEN

15% of brands disclose capacity building projects in the supply chain focused on gender equality or female empowerment

Only 1 brand publishes data on the prevalence of gender-based labour violations in their supplier facilities

30% of brands publish a strategy, including quantitative goals, on female empowerment

35% of brands publish annual male/female ratio or percentage of women in executive and management positions in the company

Only 1 brand publishes the annual gender pay gap within the company

40% of brands disclose what happens to pre-consumer waste (e.g.: defective product runs, surplus, rejected materials, etc.)

Only 10% of brands disclose what happens to post-production surplus (e.g.: dead stock materials and/or defective product runs, etc.)

10% of brands disclose the number or percentage of supplier facilities that have independent, democratically elected unions

15% of brands publish the number or percentage of supply chain facilities or workers that are covered by collective bargaining agreements

Only 1 brand publishes skin colour or racial breakdown, considering data from different hierarchical levels

15% of brands publish actions targeted at regularisation of immigrant workers across their supply chain

No brand advertises repair services in order to help extend the life of products

35% of brands report investments in circular resources or technologies

WORKERS

Only 1 brand describes how the companyâ&#x20AC;&#x2122;s purchasing practices enable payment of a living wage to supply chain workers

20% of brands report having clothing take-back schemes and/or in-store product recycling

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

5. SPOTLIGHT ISSUES IMPLICATIONS

Women (SDG 5) Only 15% of brands and retailers report capacity building projects in the supply chain focused on gender equality or female empowerment. Only 10% publish best practice guidance on issues facing female workers in the supply chain in the Supplier Code of Conduct (e.g.; sexual harassment and other forms of gender-based violence; treatment and firing of pregnant workers; maternity leave/pay; gender pay gap; women representing workers and in unions, etc.) The Women’s Empowerment Principles1 launched in 2010, set out seven steps that businesses and other sectors can take to build capacity, develop and create equal opportunities for women. Companies that have signed up to the Principles explicitly state their intention to measure and publicly report on their progress towards gender equality in their workplace, supply chains and community.

In our review, we have found that 30% of brands and retailers publish a strategy with quantitative goals related to women’s empowerment and gender equality aligned with the Women’s Empowerment Principles. Brands and retailers that publish the annual proportion of men/women or the percentage of women in executive and management positions within the company account for 35%, but only 1 brand (5%) discloses the annual gender pay gap within the company (differently, in the UK, companies have been required by law to publish the gender pay gap since April 4, 2018). Workers – living wages (SDG 8) Among the 20 brands reviewed, 5 (25%) publish their commitment to pay living wages for employees, and 1 (5%) includes supply chain workers, but only 1 brand (5%) reports its progress towards that commitment. No brand discloses a policy of paying their suppliers on time.

We hope that, through global initiatives like ACT - Action, Collaboration, Transformation2, the industry will see faster progress towards achieving living wages for workers worldwide. Workers - unionisation & collective bargaining (SDG 8) In Brazil, CLT (Consolidation of Labour Laws) provides for regulation of individual and collective labour conditions such as working hours, minimum wage, annual leave, security, collective bargaining, trade union organisation, etc. However, only 2 brands (10%) disclose the number or percentage of supplier facilities that have independent, democratically elected unions, and 3 brands (15%) publish the number or percentage of suppliers or workers that are covered by collective bargaining agreements.

Only 1 brand (15%) publishes best practice guidance on freedom of association and/ or collective bargaining processes in the supply chain in the Supplier Code of Conduct (i.e.; identifying common examples of noncompliances; examples of more effective management and communication systems; specific best practice case studies). Collective bargaining is essential to establish the terms and conditions of employment between workers and their employers and to ensure improved wages and working conditions.

1 The Women’s Empowerment Principles are the result of collaboration between the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) and the United Nations Global Compact. 2 ACT (Action, Collaboration, Transformation) is a ground-breaking agreement between global brands and retailers and trade unions to transform the garment and textile industry and achieve living wages for workers through collective bargaining linked to the brands purchasing practices.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

5. SPOTLIGHT ISSUES IMPLICATIONS

Waste (SDG 12) Out of the brands and retailers reviewed, 20% disclose clothing take-back schemes and/ or in-store clothing recycling in order to help consumers properly recycle their clothes. Whereas 40% of brands and retailers disclose what happens to waste in the factories, such as defective product runs, surplus and rejected materials, only 10% disclose what happens to post-consumer waste, such as defective items and dead stock materials. We have not found any advertisement of repair services in order to help extend the life of products.

It is estimated that 150 billion items of clothing are delivered out of factories annually worldwide — that’s 20 new items of clothing for every person on the planet. [Source: MIT – Massachsetts Institute of Technology]

It is estimated that Brazil produces 170,000 tons of textile waste annually. [Source: SEBRAE]

On the other hand, 35% of brands and retailers are disclosing investments in circular technologies and resources to reduce resource consumption and increase resource efficiency.

It is estimated that about 70,000 tons are reprocessed by recycling companies. [Source: Abit]

It is estimated that in the neighbourhood of Bom Retiro alone, in Sao Paulo, 12 tons of textile waste are produced daily. [Source: Sinditêxtil-SP]

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

TRANSPARENCY PRODUCES CHANGE

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

REMARKS FROM THE SUSTAINABLE PRODUCTION AND CONSUMPTION PROGRAMME TEAM AT FGVCES In order to incorporate the changes needed into the economy and society, in search of a prosperous and inclusive development model that respects our planet's environmental limits, a number of strategies have been discussed and proposed at different levels of the government and society. Strategies and goals as the ones proposed by the 2030 Agenda and the Sustainable Development Goals (SDG) 1 suggest that, given the magnitude of the transformation needed, little time available and the complexity of factors involved, advancements will rely on joint actions taken by different actors and social sectors, such as public agents, businesses and organisations from the civil society. Businesses play a leading role, considering the impact they have, both in a positive and in a negative way, on the economy, society and the environment.

What does society expect from companies? In addition to the legislation and regulation established to guide the business sector, society has increasingly demanded that companies adopt a responsible and transparent approach in how they operate in the marketplace and in how they conduct relationships with their stakeholders. Relevant facts, such as corruption scandals and money laundering, environmental disasters and cases of human rights violation in the operation of certain companies and their corresponding supply chains have grabbed the attention of consumers and civil society organisations. The Akatu Institute2 conducted research in July 2018, involving 1,090 respondents, in order to assess the perceptions and level of awareness amongst Brazilian consumers regarding conscious consumption, sustainability practices, and corporate social responsibility. The research found that 59% of respondents said that if they knew a business was going beyond required legislation to benefit society this would influence their purchasing decisions. For example, 45% of the respondents indicated

they are concerned with company practices to fight child labour. On the other hand, the research points out that 60% of the respondents acknowledge the difficulty to get information on the company’s social and environmental practices, and this represents a great obstacle for them to change their consumption behaviour. This clearly shows that consumers pay attention to company conduct and this can potentially influence their purchasing decisions. This also points to the need for companies to enhance the way they communicate their practices, so that relevant information properly reaches their stakeholders. In the civil society organisations’ perspective, the more a given business has information available and is open to dialogue, the higher is its reliability, and the more likely to act on towards sensitive issues, such as those related to social and environmental incidents across its own operations or value chain. In the past few years, a range of initiatives promoted by NGOs shows how the third sector is concerned with the way Brazilian businesses operate.

Examples such as the Ethos Institute and its corporate self-assessment indicators 3 or the work conducted by the Global Reporting Initiative (GRI) 4 in the country, promoting its guidelines to produce sustainability reports, both widely adopted by the companies, show that there are initiatives available to support the company’s responsible management and foster transparency practices. The incorporation of transparent and sustainable practices into business management is acknowledged by the industry and the media. Take, for instance, the voluntary adherence to processes such as public companies at B3 (Brazilian stock market) competing to be listed in the Corporate Sustainability Index (CSI, or ISE)5 in the Brazilian Portuguese acronym), which has annually highlighted a group of businesses with advanced corporate sustainability strategies and practices. For ISE index, whenever a company is selected to be part of its portfolio, the answers provided to the questionnaire used as the basis for the selection process are made available on the Index website, enabling those interested in getting to know their sustainability practices to have access

1 https://nacoesunidas.org/pos2015/agenda2030/ 2 https://www.akatu.org.br/arquivos/Pesquisa_akatu_apresentacao.pdf - 3 https://www3.ethos.org.br/conteudo/indicadores - 4 https://www.globalreporting.org 5 https://www.isebvmf.com.br

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to a wide range of information. Another example is the participation of businesses in the selection process to be listed in Exame6. magazine Sustainability Guide. That Guide, using a selection process similar to the one adopted to fill out the ISE questionnaire, annually discloses the businesses that were able to show the way they have guided their corporate practices in favour of sustainability. Based on its experience with sustainable development management and technical coordination of ISE index and Exame magazine Sustainability Guide, the Centre for Sustainability Studies (FGVces) at the Getulio Vargas Foundation Sao Paulo Business Administration School (FGVEAESP), was invited by Fashion Revolution Brasil to be its technical partner in the development and deployment of the first edition of the Fashion Transparency Index Brazil. For FGVces, it was a promising challenge, considering the importance of promoting transparency in the Brazilian fashion industry and, based on this experience, the idea is to incentivise similar initiatives to be implemented in other industries. Sustainability and the fashion industry According to data collected by the Brazilian Textile and Apparel Industry Association (ABIT) 7, Brazil is the fifth largest textile producer worldwide, with a supply chain that spans from fibre production to end consumers, in an extremely competitive industry. Considering the complexity of that chain, fashion business face a range of social and environmental challenges.

Taking the dynamics of the sector into consideration, clothing production is the link in the chain that feels the greatest pressure for quick turnaround times and low economic performance. In order to meet the demand of purchasing companies and increase their revenue, suppliers often accept demands that are higher than their ability to deliver. The suppliers then distribute their orders to smaller vendors who, in turn, outsource production to even smaller suppliers, and so on and so forth. This practice is known as hiring of fourth-party vendors in the industry, and one of its main features is the fact that it does not allow purchasing companies to properly monitor their supply chains, which consequently exposes them to different types of risks, such as informality and human rights abuses. In this sense, recent and largely known events in the Brazilian fashion industry posed challenges to the sector when it comes to the human rights agenda. Slave workers were found in fourthparty sewing workshops, which resulted in reputational and business damages to large companies in the sector. Much of the loss was caused by the negative visibility the brands had in the media, which ultimately influenced consumers disapproval, and consequent fall in sales. Civil society organisations launched some initiatives to shed light on those cases and make pressure on the industry to hold accountability for their own supply chains. Among the initiatives, we can highlight ABVTEX8, promoted by the Brazilian Association of Textile

Retail (ABVTEX), which represents the efforts made by fashion retailer networks to deploy best compliance practices amongst their suppliers and subcontracted workers. Another initiative is Moda Livre (Free Fashion), developed by Repórter Brasil9, (Reporter Brazil) NGO, which assesses actions taken by large corporations in the industry to prevent their products from being produced by forced and bonded labour. Concerning environmental challenges in the fashion industry, data published during the "UN Partnerships on Sustainable Fashion and the SDGs” 10, panel, at the High-Level Political Forum on Sustainable Development, in July 2018, indicates the sector accounts for 10% of global carbon emissions. Data reported by the panel also says the sector is responsible for 20% of wastewater production worldwide. Amongst the conclusions drawn by the panel, they discussed the need for consumers to change their behaviour so they can understand their role as influencers of business behaviour. They can do that through consumption habits; once consumers find out about business practices, they can stop buying from brands whose impacts are harmful to society interests. The examples and initiatives mentioned above show how important it is to foster transparency in the fashion industry, both to give visibility to the impacts caused by businesses and to the corresponding measures deployed for mitigation, and to

6 https://exame.abril.com.br/especiais/sustentabilidade 7 http://www.abit.org.br 8 https://www.abvtex.org.br/sobre-o-programa 9 http://reporterbrasil.org.br 10 http://sdg.iisd.org/news/hlpf-side-event-considers-un-partnership-on-sustainable-fashion-and-sdgs

promote best practices and encourage their dissemination. We hope the first edition of FTI Brazil incentivises local businesses towards this path, not only to communicate the way they manage their business, but also to foster dialogue with their stakeholders.

We hope the first edition of FTI Brazil incentivises local businesses not only to communicate the way they manage their business, but also to foster dialogue with their stakeholders. About the FTI Brazil process and results During the first edition of FTI Brazil, we found publicly available information from 12 out of the 20 brands and retailers assessed. As explained in the report, the process of information assessment consisted of three stages. In the first stage, the team responsible for the Index collected as much publicly available information as possible to fill out a questionnaire for each brand. This work entailed assessing the information available on websites and other brand communication channels. In the second stage, the questionnaires were submitted to the corresponding brands and reviewed by them. In the meantime, the companies had the chance to include on their websites

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

and communication channels information that had not been disclosed up to the moment or that was not up to date. In some cases, all the businesses had to do was provide a link to access their information that had not been found during the first stage. Finally, in the third stage, the Index team received the brands questionnaires back, so as to run a final assessment of the information and analyse the results. An interesting fact about that process was an increase in the amount of information identified on the brand websites and communication channels, pointing to a 122% increase when comparing what was found in the first stage to what was found in the third stage. This represents engagement and commitment of the various brands assessed, and sets an expectation to enhance that movement towards transparency from now on. Although FTI Brazil does not intend to check out the accuracy and quality of the information, but rather its availability to the brands' stakeholders, the information disclosed in this first edition points to some challenges in the Brazilian fashion industry. When it comes to implementing corporate sustainability best practices and promoting brand transparency, an increasingly critical practice has been the production of annual and/or sustainability reports that are audited or verified by thirdparties. However, the results show that

only three of the brands assessed publish their reports with rigorous reliability. On items related to working conditions, most brands assessed disclose in their purchasing practices that they expect compliance with local legislation where their suppliers operate. Nonetheless, it is still not possible to determine the way brands have addressed cases of suppliers who work in countries with softer legislation and with known risks of human rights abuses in their supply chains. Both in the global Index and in the Brazilian Index, it was clear that the level of information brands share about their suppliers is low. The results obtained in the section Traceability (11% in the global Index and 12% in the Brazilian Index) confirm the fact that businesses have enhanced control over ‘closer information’, meaning the closest links in the supply chain, and less control over information concerning more distant links, or raw material suppliers. As for foreign migrant workers, in spite of their increasing relevance in Brazil in recent years, only seven of the brands assessed disclose the corresponding standards expected in their value chains. Additionally, only three brands disclose the actions they take to regularise migrant workers in their chains. On the other hand, the 12 respondent brands publicly disclose their policies on forced or bonded labour, and child labour

issues. This represents advancements of the agendas in the sector and legitimates initiatives promoted on those topics. Only seven brands assessed disclose projects, strategies, guidelines or data related to gender equality, women empowerment, fight against discrimination and gender-related violence. Those same brands and retailers also publish the annual ratio of women in executive and management roles in the company. However, only one of those brands annually publishes the gender pay gap for their employees. One aspect that grabs our attention is the environmental agenda; only two brands publish policies on energy efficiency and carbon emissions. The good news is that seven respondent brands disclose information of their investments and initiatives related to circular economy and technologies aimed at increasing the efficiency of resources used during the production process. In this context, amongst the investments disclosed by the brands, there is a prevalence of practices to create pieces from renewable raw materials and easily recyclable materials. Despite acknowledging the advancement represented by this first FTI Brazil edition, it is important to consider this as only one step further of the Brazilian fashion industry towards consolidating the transparency agenda in the sector. We

hope questions such as ‘who made my clothes’ become increasingly easier to answer, and consumers and civil society organisations see enough openness from brands, not only to find the information they seek, but also to collectively implement the changes needed to enable a development model as the one mentioned in the opening of this article. Finally, we hope initiatives like this set the tone and inspire other industries in the Brazilian economy, with challenges that are as great as the ones found in the fashion industry.

FGVces – Centre for Sustainability Studies at Getulio Vargas Foundation Mario Monzoni - General Coordinator Sustainable Production and Consumption Program Aron Belinky - Coordinator Renato Moya - Management, Analysis and Writing Alexandre Miyake - Research, Analysis and Writing

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

VIEWPOINT

FERNANDO VALENTE PIMENTEL PRESIDENT ABIT - BRAZILIAN TEXTILE AND APPAREL INDUSTRY ASSOCIATION

Considering societyâ&#x20AC;&#x2122;s growing expectation for information about the production processes and practices and manufacturing of goods and services we consume, we understand transparency as a very relevant element in accountability to consumers and something that should be incorporated into business strategy.

Transparency will allow for greater participation of each person in the changes needed to create a fairer and more sustainable fashion industry. In this sense, we view the Fashion Transparency Index Brazil as a way to acknowledge brands that disclose their compliancerelated policies and also as a way to incentivise other brands to publish more on their social, ethical and environmental practices. It is a positive initiative that should be taken as an educational tool. Since globalisation integrates different countries into the same value chain, it is important to make transparency a universal standard, not just a local demand.

Transparency will allow for greater participation of each person in the changes needed to create a fairer and more sustainable fashion industry.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

VIEWPOINT

HELIO MATTAR CEO AKATU INSTITUTE

A STEP BEYOND TRANSPARENCY

paradigms in this industry, nondisclosure of supply chain information by brands leads to lack of transparency.

The fashion value chain is global, comprehensive and extremely complex. When it comes to (many) brands present in people’s daily lives, there is at least an ocean dividing the consumer markets and the places where raw material is extracted and processed, and where final products are manufactured.

As this is a huge industry with a US$ 3 trillion annual revenue1 , it is urgent to determine the critical points of impact, in order to quantify them and elaborate improvement plans with concrete goals and targets. Some businesses are making efforts in that sense, but the industry needs to cooperate more to drive faster changes towards sustainability. This will only happen if each link in the supply chain is properly addressed through transparency, and only if the key and relevant stakeholders engage to tackle the impacts.

This fragmentation can lead to many adverse social and environmental impacts in the industry. As strange as it may seem, the network is so complex that, weeks after the Rana Plana disaster, in Bangladesh, where over 1,000 workers died when a building hosting many manufacturing facilities collapsed, the world still did not know all brands whose pieces were produced there. Thus, for those who seek to change

For consumers, considering the visibility that is given to brands’ lack of information and actions on social media, transparency will gradually become inevitable. Therefore, if initially transparency was a value, it will soon become a fact.

Anticipating this inevitability, organising information on impacts and, in case of negative impacts, linking them to the corresponding action plans and targets to gradually and systematically solve problems, will help companies convey reliability to their consumers and position themselves as responsible and proactive businesses. According to research conducted by Akatu in 2018, 59% of Brazilian consumers would like companies to actively work to develop society, doing more than just generating jobs and making profits. The Fashion Transparency Index is essential to guide business’ vision (and actions) towards necessary directions, as well as to guide consumers' perception on critical points involving their purchasing decisions. In this sense, the Index will act as an organiser of all the information provided by the brands, and will be used by consumers to guide their consumption choices, being thus effective as an agent to change shopping habits.

1 https://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion; https://fashionunited.com/global-fashion-industry-statistics

This means that brands will be guided in their transparency efforts and should ensure the most relevant negative impacts are addressed in their plans and targets. Therefore, by working for more durable products, and by holding accountability for the management of those products at the end of their life, as well as for the well-being of all those who work in their value chain, businesses will build the reputation of their brands in such a way as to make consumers understand how important those actions are and gradually incorporate these issues into their individual purchasing decisions. Thus, there would be a feedback cycle, in which information collected to guide the business would also be used to enhance the critical thinking of consumers, who, in turn, would be more informed to make better choices, and would reinforce to the market the importance of providing more and better information and, especially, products coming from increasingly more responsible supply chains.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

WHAT SHOULD YOU DO WITH THIS INFORMATION?

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CITIZENS

We hope the Fashion Transparency Index Brazil inspires people to ask brands #whomademyclothes demanding greater transparency.

To encourage brands to be more transparent, you can take the following actions:

At the moment none of us have enough information about where and how our clothes are made. We have the right to know that our money is not supporting exploitation, human rights abuses and environmental destruction. There is no way to hold brands and governments to account if we canâ&#x20AC;&#x2122;t see what is truly happening behind the scenes. This is why transparency is essential. We hope that the FTI Brazil inspires us to think differently about the clothes we wear and to assess the brands we buy, considering how our clothes might have been made, where, by whom, under what conditions and at what true cost. We hope this research inspires you to try to find out more about the production processes and people behind what you wear.

ncourage more public disclosure from E brands by using social media to ask brands #whomademyclothes;

Support campaigns that call for brands to publish their supplier lists and supply chain information;

Write or call policymakers and ask them to: - I mplement regulation ensuring brands are responsible for the impact they have on the lives of the people working in their supply chains, at home and abroad. - Require brands to report transparently about their social and environmental impacts across the entire value chain using a common disclosure framework.

Find out how to get involved in the campaign: fashionrevolution.org/south-america/brazil/

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

BRANDS AND RETAILERS

We ask brands and retailers to take immediate, concrete steps to: Disclose their supplier lists in a searchable format;

We hope the Fashion Transparency Index Brazil influences brands and retailers to publish more information about their policies, practices and progress on human rights and the environment. Among the 20 brands reviewed, 25% are publishing tier 1 supplier lists. We hope the FTI Brazil influences more brands to disclose their supplier lists with increasingly detailed information - answering the question #whomademyclothes?

FTI Brazil aims to shed some light on how different brands are communicating their sustainability/corporate social responsibility (CSR) initiatives, highlighting where best practices and areas for improvement are emerging. We think it might be interesting for brands and retailers to see how they compare to each other in terms of public disclosure of supply chain information and social and environmental priorities.

Publish more easy-to-understand information about their social and environmental performance, progress and impacts across the entire supply chain; Improve sustainability/corporate social responsibility communications, to make relevant information easier to find and more simple to understand;

Publish direct contact details for the sustainability/ corporate social responsibility department on their websites;

Answer their customers' #whomademyclothes requests on social media with specific supplier information, not just your policies.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

GOVERNMENTS AND POLICYMAKERS Fashion Revolution believes that laws and regulations are key to transforming the fashion industry. There are plenty of international standards set by the United Nations and bodies such as the ILO (International Labour Organisation), and many countries actually have living wages, workers’ rights and environmental protections written into their Constitutions. However, enforcement of existing laws is often absent, implementation is weak and there is little opportunity to address human rights violations and environmental impacts. This needs to change. Fortunately, transparency is beginning to become subject to legislation. For example, France requires companies to report annually on environmental, social and corporate governance issues. In the UK, companies must now disclose their gender pay gap.

In Brazil, we have, for example, Law 14,964, which punishes companies established in the State of São Paulo that adopt practices such as forced labour in their manufacturing process. Companies found using such practices are subject to losing their registration under the State Tax on Circulation of Goods and Services (ICMS), being closed and forbidden to conduct any formal business operation. The UK Modern Slavery Act and California’s Transparency in Supply Chains Act require companies to disclose their efforts to eradicate human trafficking and slavery from their supply chains. The European Union is currently discussing a number of measures that would legally require companies to carry out risk assessments across their supply chain. We hope the FTI Brazil helps to demonstrate the need for mandatory due diligence and reporting. We would also like to see governments make companies and their executives legally responsible for what happens in the company’s supply chains, regardless of where in the world abuses may be happening. Citzens deserve to know that the clothes they buy have not contributed to exploitation and environmental degradation.

We ask that governments and policymakers take action in several ways to: Better implement and enforce existing laws that are meant to protect workers and the environment everywhere;

Legislate and support transparency - i.e. mandatory due diligence and standardised disclosure by brands on social and environmental issues;

Make companies and their executives at home accountable for what happens in the company’s supply chains, regardless of where in the world abuses may be happening.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

NGOS, UNIONS AND WORKERS

We encourage NGOs and unions to:

Join us in encouraging brands to publish supplier lists and more detailed supply chain information;â&#x20AC;¨ We hope that the FTI Brazil is useful for NGOs, trade unions and civil society groups who are working directly with producers and supply chain workers on human rights and environmental protection.

This research can help NGOs, unions and workers to understand what brands are publishing supplier lists, what information is being disclosed, where brands are producing and what policies and procedures brands say they have in place to protect workers and the environment. There are many pioneering NGOs working directly on the ground in producing countries, and we hope this information can help them keep brands accountable for what happens in their supply chains, wherever production is based.

Join us in asking policymakers for mandatory due diligence and standardised reporting;

Support our call for citizens to ask brands #whomademyclothes

Send us information about how they would like to see the fashion industry improve. Letâ&#x20AC;&#x2122;s work together!

Fashion Revolution commits to supporting complementary campaign efforts by other NGOs, unions and workers, wherever possible.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

ACKNOWLEDGMENTS

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

THANK YOU! The Fashion Transparency Index Brazil report was written by Eloisa Artuso, Educational Director at Fashion Revolution Brazil, and by Sarah Ditty, Director of Policy at Fashion Revolution globally. It was designed by Heather Knight, Fashion Revolution’s Head of Branding and Communications, the person who is responsible for giving our movement its visual identity. In Brazil, the design was developed both by Carolina Caser and Igor Arthuzo, at Estúdio Bora Lá. Research was led by Eloisa Artuso, with technical partnership of the Centre for Sustainability Studies at Getulio Vargas Foundation (FGVces), Alexandre Miyake, Aron Belinky and Renato Moya, supported by Fernanda Simon, Executive Director at Instituto Fashion Revolution Brasil, and by Sarah Ditty.

A huge thanks to Ana Paula Sudano, Elisa Tupiná, Gabriela Machado, Loreny Ielpo and Marina de Luca, members of Fashion Revolution Brazil, for their diligent efforts in communicating and producing the project. A very heartful thanks to Carry Somers, Jocelyn Whipple and Vicky Nida, at Fashion Revolution global, for their huge support in creating and implementing the Index in Brazil, and to Fernanda Carreira, at FGVces team, for believing in the project. Thanks to the brands and their representatives who took the time to go to our meetings and complete the research questionnaire. Their participation is both vital and much appreciated. We would like to say a special thanks to Dari Santos, Edmundo Lima, Fernando Pimentel, Helio Mattar and Marcel Gomes for their important written contributions to this report.

We extend the utmost gratitude to our pro-bono consultation committee, who has been instrumental in guiding and following-up the development and evolution of the Fashion Revolution Fashion Transparency Index methodology: Dr. Mark Anner, Neil Brown, Ian Cook, Orsola de Castro, Subindu Garkhel, Jenny Holdcroft, Dr Alessandra Mezzadri, Joe Sutcliffe and Heather Webb. We thank C&A Foundation for its financial support, and Abvtex (Brazilian Association of Textile Retail) for its institutional support. A huge thanks to the members of Fashion Revolution Brazil nucleus, local representatives, student ambassadors and all other volunteer collaborators of the movement across the country, without whom our work would not have been possible.

Finally, we would like to thank all of you for reading this report and supporting Fashion Revolution. Please consider donating financially to Instituto Fashion Revolution Brasil, so you will be collaborating to strengthen the movement in the country and to create more projects like the Fashion Transparency Index Brazil. Let’s spark an even wider global conversation about the impacts of our clothes. With your help, we can create positive change and transform the fashion industry!

D O N AT E H E R E : https://www.fashionrevolution.org/donate/

Technical partner:

Supporters: FTI Brazil received financial support from C&A Foundation and institutional support of Abvtex. Its contents are the sole responsibility of Fashion Revolution and do not reflect the views of its supporters.

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: 19 Dig Street, Ashbourne, Derbyshire, DE6 1GF, UK. Instituto Fashion Revolution Brasil, registered legal entity No. 30.852.175/0001-98.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

ANNEX 1: DEFINITIONS AND 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. (Source: Walk Free Foundation)

Capacity building projects often refer to activities that seek to strengthen the skills, competencies and abilities of people and communities in developing societies so they can overcome the causes of their exclusion and suffering. (Source: Oxfam)

Closed-loop refers to a societal system where products and their components are designed, manufactured, used and handled so as to circulate within society for as long as possible, with maximum usability, minimum adverse environmental impacts, minimum waste generation, and with the most efficient use of water, energy and other resources throughout their lifecycles. (Source: Green Strategy)

CSR (Corporative Social Responsibility) corporation’s initiatives to assess and take responsibility for its effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by law. (Source: Investopedia)

Collective bargaining is a process where employers and unions negotiate to determine fair wages and working conditions. (Source: OIT)

Due Diligence is a process through which companies assess their impacts on human rights and the environment and then take actions to reduce any negative impacts. (Source: Pacto Global da ONU)

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: Comissão de Igualdade e Direitos Humanos)

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: OIT)

Gender pay gap is defined as the difference in median pay between men and women. (Source: Secretaria de Estatísticas Nacionais)

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: Verité)

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.

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)

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. (Source: CIRS-REACH)

Supply chain / value chain refers to all the steps it takes to produce and sell a product, from farm to closet.

(Source: Greenbiz)

(Source: OCDE)

NGO (Non-governmental organisation) is a group that operates independently of any government, typically one whose purpose is to address a social or political issue.

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: Oxford Dictionary)

Purchasing practices refer to a company’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: BetterBuying)

(Source: Blog Garment Merchandising)

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

ANNEX 2: REFERENCES ABIT (Brazilian Textile and Apparel Industry Association) - Perfil do Setor (Industry Profile) - 2017 - Available at: http://www.abit.

org.br/cont/perfil-do-setor - Visited on: July 21, 2018.

ACCORD ON FIRE AND BUILDING SAFETY IN BANGLADESH - Available at: http:// bangladeshaccord.org/ - Visited on: July 21, 2018. ACT (ACTION, COLLABORATION, TRANSFORMATION) - Available at: https:// actonlivingwages.com/ - Visited on: September 15, 2018.

ALLIANCE FOR BANGLADESH WORKER SAFETY - Available at: http://www. bangladeshworkersafety.org/ - Visited on: September 06, 2018.

ASSEMBLÉIA LEGISLATIVA DO ESTADO DE SÃO PAULO (Legislative Assembly of the State of Sao Paulo) - Law number 14,946, as of January 28, 2013 - 2013 - Available at: https:// www.al.sp.gov.br/norma/169311 - Visited on: September 15, 2018.

CLEAN CLOTHES CAMPAIGN - Transparency Pledge - 2017 - Available at: https:// cleanclothes.org/transparency - Visited on: August 26, 2018.

CORPORATE HUMAN RIGHTS BENCHMARK Available at: https://www.corporatebenchmark. org/apparel - Visited on: September 03, 2018.

EMPOWER WOMEN - Women Empowerment Principles - Available at: https://www. empowerwomen.org/en/weps/about - Visited on: September 15, 2018.

ETHICAL TRADING INITIATIVE - Towards greater transparency: the business case – 2017 - Available at: https://www.ethicaltrade.

ILO (International Labour Organization) Estimating a living wage: A methodological review - 2011- Available at: https://www.ilo.org/

travail/whatwedo/publications/WCMS_162117/lang-en/index.htm - Visited on: 26 de agosto de 2018.

KNOW THE CHAIN - Benchmarks: 2016 Apparel & Footwear - 2016 - Available at:

org/resources/towards-greater-transparencybusiness-case - Visited on: September 03, 2018.

https://knowthechain.org/benchmarks/3/ - Visited on: September 03, 2018.

ETHICAL TRADING INITIATIVE - ETI Base Code - Available at: https://www.ethicaltrade.org/

KOPERNIAK, Stefanie - MIT (MASSACHUSETTS INSTITUTE OF TECHNOLOGY) - MIT Climate CoLab, in collaboration with Nike, launches new materials competition - 2015 - Available at: http://news.mit.edu/2015/nike-mit-climate-

sites/default/files/shared_resources/eti_base_ code_-_portuguese.pdf - Visited on: September 03, 2018.

FASHION REVOLUTION - 2017 Impact Available at: www.fashionrevolution.org/2017impact - Visited on: August 26, 2018.

FASHION REVOLUTION - Fashion Transparency Index 2017 - 2017 - Available at: https://www.fashionrevolution.org/about/ transparency/ - Visited on: August 26, 2018.

HERZBERG, Benjamin - THE WORLD BANK The Next Frontier for Open Data: An Open Private Sector. - 2014 - Available at: http://

blogs.worldbank.org/voices/next-frontier-opendata-open-private-sector - Visited on: August 26, 2018.

HUMAN RIGHTS WATCH - Follow the Thread - 2017 - Available at: https://www.hrw.org/

report/2017/04/20/follow-thread/need-supplychain-transparency-garment-and-footwearindustry - Visited on: July 21, 2018.

colab-apparel-materials-sustainabilitycontest-1029 - Visited on: September 15, 2018.

MALO, Sebastien - Reuters - With new law, U.S. takes on slavery by banning forced labor imports - 2016 - Available at: https://

www.reuters.com/article/us-usa-lawmakingforcedlabor-idUSKCN0VX32A - Visited on: September 15, 2018.

MICROFINANCE OPPORTUNITIES - Garment Worker Diaries. Available at: http:// workerdiaries.org/ - Visited on: September 16, 2018.

OECD - Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector - 2017 - Available at: https://mneguidelines.oecd.org/oecd-duediligence-guidance-garment-footwear.pdf Acesso em: 26 de agosto de 2018.

OHCHR - Guiding Principles on Business and Human Rights: Implementing the United Nations 'Protect, Respect and Remedy’ Framework - 2010 - Available at:

https://www.ohchr.org/Documents/Publications/ GuidingPrinciplesBusinessHR_EN.pdf - Visited on: August 26, 2018.

ONU BR (UN IN BRAZIL) - Objetivos do Desenvolvimento Sustentável (Sustainable Development Goals) - Available at: https:// nacoesunidas.org/pos2015/ - Visited on: September 16, 2018.

O’REILLY, Emily - The Future of Transparency and Access to Information - 2017 - Available at: https://medium.com/@EUombudsman/the-

future-of-transparency-and-access-to-information766a48505fd0 - Visited on: August 26, 2018.

SEBRAE - Retalhos de Tecidos: no Lugar do Desperdício, Negócios Sustentáveis (Patchwork Fabric: Instead of Waste, Sustainable Business) - Available at: http://

www.sebraemercados.com.br/retalhos-de-tecidosno-lugar-do-desperdicio-negocios-sustentaveis/ - Visited on: September 16, 2018.

STATE OF CALIFORNIA DEPARTMENT OF JUSTICE - The California Transparency in Supply Chains Act - Available at: https://oag. ca.gov/SB657 - Visited on: September 15, 2018.

UK LEGISLATION - Modern Slavery Act - 2015 - Available at: http://www.legislation.gov.uk/ ukpga/2015/30/contents/enacted - Visited on: September 15, 2018.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

CHECK OUT THESE ORGANISATIONS FOR FURTHER RESEARCH:

AN IMPORTANT FINAL NOTE

In Brazil:

Worldwide:

Akatu

Anti-Slavery International

CAMI - Centre of Support to Immigrants

Clean Clothes Campaign

camimigrantes.com.br

cleanclothes.org

Escravos Nem Pensar! (Slaves No Way!)

Ellen MacArthur Foundation

escravonempensar.org.br/

ellenmacarthurfoundation.org

We are not endorsing the brands included in the Fashion Transparency Index Brazil, regardless of how they score. By conducting this research, we are not promoting the fast fashion business model, which underpins some of the brands included in research, but rather incentivising greater transparency in their practices and processes, as well as in all the other brands assessed.

FGVces

Ethical Trading Initiative

Greenpeace Brazil

International Labor Rights Forum

akatu.org.br

fgv.br/ces

greenpeace.org/brasil/

Human Rights Watch

hrw.org/pt/americas/brasil

InPACTO

inpacto.org.br/pb/

Instituto Ethos ethos.org.br/

ILO - International Labour Organisation ilo.org/brasilia/lang--es/index.htm

Repรณrter Brasil (Reporter Brazil) reporterbrasil.org.br/

Uniethos

uniethos.org.br/

antislavery.org

Fashion Revolution encourages you to use your voice, your money and your power to transform the fashion industry. Read our booklet How To Be a Fashion Revolutionary to find

out what more you can do.

ethicaltrade.org laborrights.org

Solidarity Centre

solidaritycenter.org

The Centre for Research on Multinational Corporation (SOMO) somo.nl

Be Curious. Find Out. Do Something.

Wikirate

wikirate.org

Please also visit workerdiaries.org to discover the Garment Worker Diaries, a yearlong research study of the lives and wages of 540 garment workers in Bangladesh, Cambodia and India, led by Microfinance Opportunities in collaboration with Fashion Revolution CIC and supported by C&A Foundation.

Share this Index.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018

ABOUT FASHION REVOLUTION

Fashion Revolution is a global movement which aims to radically change the way fashion is sourced, made and consumed. We believe in an industry that values people, the environment, creativity and profit in equal measure. We have teams in over 100 countries that want to see fashion become a force for good. In Brazil, we have been working since 2014, and we count representatives in almost 50 towns, and over 70 colleges organising events and actions. Our national movement has conducted projects in partnership with the Labour Public Ministry, ILO (International Labour Organisation), Sebrae, Human Rights Offices and city councils, NGOs, among others. Read and sign our manifesto.

" Transparency is visibility. We want to see the fashion industry, respect its producers and understand its processes. We want a clear, uninterrupted vision from origin to disposal to foster dignity, empowerment and justice for the people who make our clothes and to protect the environment we all share."

www.fashionrevolution.org/south-america/brazil/ @fash_rev_brasil @fashionrevolution.brasil

ORSOLA DE CASTRO CO-FOUDER FASHION REVOLUTION

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL | 2018