Fashion Transparency Index Brazil 2019

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

FASHION INDEX Edition A review of 30 of the biggest Brazilian fashion brands and retailers ranked according to how much they disclose about their social and environmental policies, practices and impact.

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FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

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CONTENTS

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FOREWORD FINDINGS-AT-A-GLANCE EXECUTIVE SUMMARY WHY TRANSPARENCY? Why transparency matters in the fashion industry Case Studies: Transparency in Action Viewpoint: Mércia Silva What does transparency mean?

To achieve systematic change, we recognise 4 important aspects Viewpoint: Carol Delgado

23 24 25 26 27 29 30 31 32 32 33

ABOUT THE FASHION TRANSPARENCY INDEX Why do we carry out this research?

The methodology Weighting of the scores About the methodology Updates to the methodology Criteria for the selection of the brands The 30 brands selected How the research is conducted About the research and engagement process How the scoring works

35 36 37 38

THE FINAL RESULTS A quick guide to the results The final results Quick findings

3 4 5 11 12 15 17 18 20

39 40

Overall analysis Viewpoint: Leonardo Marques

41 42 43 50 55 61 67

THE FINAL SCORES: SECTION-BY-SECTION Average scores across the sections 1. Policy & Commitments 2. Governance 3. Traceability 4. Know, Show & Fix 5. Spotlight Issues

79 80 81 82 83

WHAT SHOULD YOU DO WITH THIS INFORMATION? Citizens Brands and Retailers Governments and Policymakers Civil Society Groups, Trade Unions and Workers

84 87 88 90

ACKNOWLEDGEMENTS ANNEX 1 Definitions and abbreviations ANNEX 2 References For further research, please check out these organisations Important final note About Fashion Revolution

90 91

The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution CIC or Instituto Fashion Revolution Brasil © Fashion Revolution CIC 2019. All rights reserved. This document is not to be copied or adapted without permission from Fashion Revolution CIC.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

Disclaimer The Fashion Transparency Index Brazil is made available observing that this index shall be used for general information only. Readers are encouraged to reach their own opinions and viewpoints about each of the labels as here mentioned. The contents of the Index shall not be interpreted, attached or linked to any form of judicial or court use, governance, regulation, research or investment, or to any specific or generic recommendation about purchase, sale, or any type of negotiation with the labels here presented. This Index was not designed to meet any investment purposes, whether general or specific. Before taking action based on any information related to the issues contained in this Index, please consider if this caters to your needs and, if necessary, seek professional advice. No statement or guarantee is made to suggest that this Index and its contents are precise, complete, or up to date.

The content of this Index is based on information found in the public domain and considered as reasonably correct at the moment of publication. Fashion Revolution has not checked, validated or audited the data used to prepare this material. The evaluation of the companies was carried out exclusively in accordance with the methodology of the Fashion Transparency Index, and no other evaluation model was used by any one of the partners in the project or by our team of analysts. Any declarations, opinions, conclusions or recommendations contained in this Index have been honestly and reasonably made or upheld at the moment of publication. Any opinions as here stated are our current opinions, based on detailed research on the date of publication, and may be changed without prior notice.

Any points of view mentioned in this Index represent only the points of view of Fashion Revolution CIC and Instituto Fashion Revolution Brasil. The contents of this publication may not, under any circumstances whatsoever, be taken as a reflection of the opinions of those who fund Fashion Revolution CIC, the Instituto Fashion Revolution Brasil or the Fashion Transparency Index Brazil.

Even though the material contained in this Index has been prepared in good faith, neither Fashion Revolution CIC, or the Instituto Fashion Revolution Brasil, neither their partners, agents, representatives, Board Members, affiliates, directors, executives, or other staff shall accept any responsibility or make any statements or warranties (whether explicitly stated or implicit) regarding the exactness, integrity, reliability and veracity of the information contained herein, or any other information made available in connection with this Index, and we hereby exempt ourselves from any responsibility for any kind of loss suffered, by any party, as a result of the use of this Fashion Transparency Index. Neither Fashion Revolution CIC, nor the Instituto Fashion Revolution Brasil, and not even any of their partners, agents, representatives, Board Members, affiliates, directors, executives, or other staff shall take on any responsibility implying an obligation to supply the users of this Index with any additional information, or to update the information contained herein, or correct any errors as may become apparent.

References as here made to any brand, product, process, or specific service, using the respective commercial trade name, trademark, manufacturer or other, do not mean or imply any endorsement, recommendation, favouring, boycott, abuse or defamation on the part of Fashion Revolution CIC and the Instituto Fashion Revolution Brasil, or on the part of any of their partners, agents, representatives, Board Members, affiliates, directors, executives, or other staff.

To the extent permitted by Law, any kind of responsibility for this Index or any material related to it is expressly waived, provided that nothing in this declaration excludes any responsibility for, or any kind of remediation for, any kind of fraud or false representation. Any disputes, claims or proceedings in connection with or arising in relation to this Index will be governed by and construed in accordance with Brazilian law and English law and submitted to the exclusive jurisdiction of the courts of England and Wales.

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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 the Creative Commons Attribution 4.0 International Licence.

This is not a Free Culture Licence. Please check the link for further information:

The research was conducted by Eloisa Artuso, Helton Barbosa, Ilishio Lovejoy with further support of Aron Belinky, Fernanda Simon, Renato Moya and Sarah Ditty between May and July 2019. It was designed by Heather Knight, Emily Sear, Bronwyn Seier and Igor Arthuzo.

The C&A Foundation has given support to the Instituto Fashion Revolution Brasil that, in turn, has funded the research for this Index. Here we would like to draw attention to our fair and honest treatment of the facts, and our unbiased approach in evaluating the C&A brand, a partner of the C&A Foundation in projects for sustainability. The two institutions are in fact part of the same group, the Cofra Group. The contents of this publication are the sole and exclusive responsibility of Fashion Revolution and do not necessarily reflect the viewpoints of the C&A Foundation.

We mitigate any risk of conflicts of interest according to the following criteria: C&A and the C&A Foundation shall be treated as separate entities; neither C&A or C&A Foundation will be given prior or privileged access to the information collected and methodological decisions; C&A shall be treated in the same way as any of the other 29 brands that we analyse; and C&A shall not be given any preferential treatment.

https://creativecommons.org/licenses/by-nc-nd/4.0/deed. pt_BR We do not grant any licence for the use of raw data that we compile to produce this Index and which we place on the raw-data file. This data is only available for viewing.

You may copy and redistribute the Fashion Transparency Index Brazil in any medium of format, provided due credits are given to Fashion Revolution and Fashion Revolution Brazil, for having created them. This licence does not give anyone the right to change, merge, transform, translate or monitor the content, in any form whatsoever. This also means that the content may not be supplied as part of a paid service, or as part of a consultancy assignment or other offer of service. If you wish to commercialise this Index, in full or in part, then please contact Fashion Revolution by e-mail at transparency@fashionrevolution.org to get a licence. Š Fashion Revolution CIC 2019 Published on 10 December 2019

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

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FOREWORD

FERNANDA SIMON EXECUTIVE DIRECTOR INSTITUTO FASHION REVOLUTION BRASIL

Transparency, the first step along the road to transformation.

In 2014, Fashion Revolution came to Brazil with the ambition of implementing a radical change in the way in which our clothes are produced and consumed.

At that time, very little was said about sustainability in the fashion industry and, knocking on the first doors, we saw just how big this mission would be. However, we decided to face the challenge and push forward. It was very touching to see that, in our first years of work, hundreds of people, passionate about fashion and fuelled by the desire to have a fairer fashion industry for all, decided to become volunteers and make the campaign in Brazil the largest. By including dozens of student ambassadors,

local representatives, events held throughout the country and a range of Universities, Fashion Revolution Brazil managed to put together an enormous network. However, one thing was still missing: a greater participation of the brands themselves.

After a few years, Fashion Revolution Brazil was chosen to produce the first local edition of the Fashion Transparency Index, a project originally conceived

by Fashion Revolution CIC who, since 2016, have analysed the availability of public data of the leading global brands.

Eventually, in 2018, we launched the first edition of the Fashion Transparency Index Brazil (Índice de Transparência da Moda Brasil), a project which heralded a whole new phase, not only for the movement in Brazil itself but also for the whole fashion industry in Brazil. Indeed, encouragement of transparency in the fashion industry is just the start of a long journey.

The lack of transparency in the fashion industry could result in tragedies such as the Rana Plaza garment factory collapse, and subject thousands of workers to deplorable working conditions. Moreover, this also supports the increase in feelings of distrust and deep insecurity in brands from those who buy the products.

Clarity in the management of the brands supply chains and operations, should be a basic citizen’s right.

Demanding transparency on the part of the major national brands is absolutely essential to achieve the changes that will support a better livelihood for the people making our clothes and protect the environment. For many people, talking about sustainable development brings a desire for something new, something small and local: everything that does not agree with major brands. However, I feel it would not be realistic to wish for a more ethical future for the fashion industry without considering the major brands, demanding systematic changes.

They employ thousands of people, produce thousands of products and, as a result, the opportunity of having a positive impact is immeasurable.

We believe that it is indeed possible, and that the brands themselves may help with the construction of this future. To assist with this process, the Transparency Index appears as a tool.

Therefore, in a country facing many social and political challenges, like Brazil, demanding more transparency from in brands is essential, not only to ensure fair conditions for the workers, but also for us to monitor goals and

pathways in favour of more sustainable development for the industry.

During the process of construction of the project, Fashion Revolution Brazil encouraged greater engagement of the brands, by means of meetings for mutual exchange. This position allowed a growing collaborative relationship between an activist movement and leading national brands. The result bears fruit, and we can see real changes occurring within the brands and their practises.

The Fashion Transparency Index Brazil 2019 is more robust, this time having 30 participating brands from different parts of the country and serving different segments of the public.

Even though the results show little engagement of the brands participating for the first time, they also show some progress among the brands that were already in the previous edition.

We hope that this Project shall contribute to the systematic transformation of the fashion industry, having a direct impact on people who manufacture our clothes, and nurturing more ethical processes and relationships. We firmly believe in the union of all players, for the construction of such a scenario.

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FINDINGS-AT-A-GLANCE

5

HIGHEST SCORING BRANDS

C&A

64%

Malwee

55%

Renner

52%

Osklen

49%

Havaianas

47%

Number of brands publishing suppliers lists 2018

2019

First-tier manufacturers

39% 5

Processing facilities

5

BIGGEST MOVERS*

10

(% CHANGE SINCE 2018)

Pernambucanas

140%

Renner

98%

Riachuelo

62%

Hering

55%

Osklen

46%

COMMITMENTS

GOVERNANCE

TRACEABILITY

28%

21%

17%

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

10%

9%

5 10

increase in average score amongst the 20 brands reviewed in 2018

Average score in each section

Suppliers of raw materials

* In order to avoid distorted variations by near-zero data comparison, the calculation for this percentage growth rate only considered brands that scored at least 1% in 2018.

3 5

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BRANDS SCORING ZERO POINTS

BROOKSFIELD CARMEN STEFFENS CIA. MARÍTIMA COLCCI COLOMBO DUMOND JOHN JOHN LE LIS BLANC LEADER LOJAS AVENIDA MOLECA OLYMPIKUS TNG

0 0 0 0 0 0 0 0 0 0 0 0 0

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EXECUTIVE SUMMARY In 2019, the Fashion Transparency Index Brazil presents its second edition, showing the results of the analysis of 30 leading fashion brands and retailers operating in the Brazilian fashion and clothing market.

Prepared by Fashion Revolution, the Fashion Transparency Index has existed in the global context since 2016 and analyses to what extent major fashion brands and retailers are publicly disclosing information about their social and environmental policies, practices and impacts throughout the value chain.

The Fashion Transparency Index Brazil 2019 was created by Fashion Revolution CIC and by the Instituto Fashion Revolution Brasil in partnership with ABC Associados, a consultancy firm specialised in methodologies for the analysis of the profiles and performance of companies, with regard to corporate sustainability.

Fashion Revolution believes that transparency is the beginning rather than an end in itself. In other words, it is but the first step in a long path to corporate social responsibility, which in turn we believe leads to changes in business practices. For this reason, we encourage transparency of information at all stages of the value chain of the fashion industry – from the extraction of raw materials to the final disposal of garments. It is only with increased transparency that consumers can understand #whomademyclothes and other stakeholders such as NGO’s can hold brands to account for the practices within their supply chains.

Observing the importance of Brazil as one of the leading players in the textile and fashion business in the world1, in 2018 Brazil was the first country in the world to receive a national edition of the Fashion Transparency Index.

The creation of an index like this stresses the need for more in-depth contextualised discussion, at local

level, regarding the importance of transparency in the development of a fashion industry with responsible practices in the value chain as its basis.

Legal Amazon Deforestation Monitoring Project. This is the worst since 2008, representing a 30% increase in relation to the previous year4.

Brazil in focus

However, the fact is that, since the 1970s, deforestation of Amazonia has been expanding at increasing speed, with the opening of pastureland being the main culprit5. Between 1985 and 2018, the country has lost almost 900.000 km² of forested area (3,6 times the state of São Paulo), while the land area used for grazing land rose by 860.000 km2.

In 2005, there were 45 million hectares dedicated to pastureland, while in 2018 the area of pastures reached 53 million hectares6. This is more evident in the Amazonian region, where 6 out of every 10 deforested hectares are converted to use as grazing land7.

The year 2019 was unfortunately beset with tragedy: the countless forest fires that took place simultaneously in the Amazon Rainforest, later spreading to the Brazilian Midwest, thus putting Brazil in the spotlight at a global level. The largest expanse of tropical rainforest on the planet was severely devastated, and the number of points of fire reached one of the highest levels of recent years.

Between January and October2, the number of points of fire in the Legal Amazonian Region increased 29% compared to the same period in 2018, according to Inpe (National Space Research Institute)3. The deforested area in the Amazon between August 2018 and July 2019 corresponds to 9,762 km², according to PRODES, Inpe's Satellite

1. For further information, please see ABIT, Sector Profile (2018): https://www.abit.org.br/cont/perfil-do-setor (In Portuguese) 2. Last monthly data available at date of research.

3. http://queimadas.dgi.inpe.br/queimadas/portal-static/estatisticas_estados/ (In Portuguese) 4. http:/ /www.obt.inpe.br/OBT/noticias/a-estimativa-da-taxa-de-desmatamento-por-corte-raso-para-a-amazonia-legal-em-2019-e-de-9-762-km2 5. https://www.greenpeace.org/usa/wp-content/uploads/legacy/Global/usa/report/2010/2/amazon-cattle-footprint.pdf 6. http://climainfo.org.br/2019/08/30/brasil-perde-area-de-vegetacao-equivalente-a-36-vezes-o-estado-de-sp-em-33-anos-mostra-o-mapbiomas/ 7. http://climainfo.org.br/2019/08/30/brasil-perde-area-de-vegetacao-equivalente-a-36-vezes-o-estado-de-sp-em-33-anos-mostra-o-mapbiomas/

The fashion industry and Amazonia It is important to note, however, that the livestock business is not only encouraged for meat production and consumption, but also for

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EXECUTIVE SUMMARY leather production, leather being an important material within the fashion industry. According to the Brazilian Centre for Leather Tanning Industry (Centro das Indústrias de Curtumes do Brasil - CICB), in July 2019 alone, the leather tanning business in Brazil exported a total equivalent to 84.2 million United States Dollars (USD)8.

Therefore, we must now look closely, with due urgency and attention, at the impact that the fashion industry has on deforestation. According to the Slaughtering the Amazon report, published by Greenpeace in 2009, many global brands have purchased leather from livestock farms in deforested parts of Amazonia9.

However, even though several labels have taken action to move away from such exposure, ten years later we still see that very little progress has been made with regard to transparency of the supply chain for leather used for the production of shoes, handbags and other products for the fashion industry.

We therefore see that companies not disclosing suppliers of their raw

materials, including leather, has become insufficient, especially at a moment when the devastation caused by the felling of tropical rainforests for livestock raising is more and more condemned at a global level.

“As citizens, we must demand our right to know where the leather we buy actually comes from – and also which brands are not contributing to the deforestation of Amazonia.” (Fashion Revolution)10 We need to bring people, industry and Government together, so that we can jointly work towards a solution that is global, rather than just national, to protect these areas that are now at risk, and also help to soothe the effects of the climate crisis we are now facing.

Even today, very few companies are publishing lists of their suppliers of raw materials Out of the 30 companies analysed in this report, we observed that only 5 companies (17% of the total) actually publish lists that include some of

8. http://www.cicb.org.br/cicb/dados-do-setor 9. Slaughtering the Amazon: http://tricri.org/wp-content/uploads/SlaughteringTheAmazon_ExecSumm_0.pdf 10. https://www.fashionrevolution.org/while-the-rainforest-burns-we-need-to-know-where-our-leather-comes-from/

their suppliers of raw materials and/or are tracking one or more specific raw materials, normally natural fibres such as cotton or other materials with cellulosic origin.

Despite a 67% growth in disclosure of raw material supplier lists between 2018 and 2019, we still see that there is a long way to go, with regard to traceability and transparency in the origin of the materials used by brands and retailers.

Leading brands and retailers have made significant efforts to become more transparent, but there is still a lot to be done This is the first year in which the brands and retailers analysed, both in the Global Fashion Transparency Index and in the Brazilian version, showed scores above 60%, showing efforts made to disclose greater information about their social and environmental policies, practices, and social and environmental impacts.

In 2018, two companies obtained a score of over 50% in Brazil, and one more entered this score range this year.

The brands that achieved scores in this range were: C&A with 64%; Malwee with 55%; and Renner with 52%. We also found that this year three brands scored between 40-50% compared to zero in 2018, which are Osklen with 49%, Havaianas with 47% and Zara with 44%.

With regard to the average score for all the brands, we see that, although the 200 brands and retailers analysed for the global index reached an average score of 21%, in Brazil the average score among the 30 brands analysed was still only 16%. We also see a slight decline in this average, compared to 2018 when the score was 17%. This was due to the addition of 10 new brands that were not included in 2018, which led to a rise in the number of companies that scored zero in 2019.

On the other hand, if we consider only the 20 companies that participated in 2018, the average score would be 23%, showing the importance of the Index as a way of influencing positive change,

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EXECUTIVE SUMMARY working towards more transparent practices within the fashion industry.

12 brands have increased their scores since 2018

The Fashion Transparency Index has been a useful tool to encourage greater transparency

Among the 20 brands that participated in the analysis for 2018, we found that 12 increased their scores in 2019, and 11 of them increased their score by over 10%, showing significant efforts towards greater transparency.

Some brands analysed in 2018 showed significant improvement in 2019, Pernambucanas increased their average score by 140%, which is very positive progress, followed by Renner, whose level of disclosure rose by 98%.

Other companies that performed well were Riachuelo, with 62%; Hering, with 55%, and Osklen with an increase of 46% in the volume of information and data made publicly available.

This progress, along with the feedback we have received directly from some companies, suggests that inclusion in the Fashion Transparency Index served as a motivation to become more transparent. According to Taise Beduschi, sustainability manager at Malwee Group, the company used their engagement in the process as an opportunity to “broaden the ongoing actions on the suppliers projects and that the Index methodology questionnaire has been very useful during this process.”

While the UK Modern Slavery Act (that requires companies to report on their efforts to address modern slavery risks), the California Transparency in Supply Chains Act (the regulates transparency in supply chains in California) as well as some French and European Union legislation have required many global fashion brands to disclose at least a minimum level of information about their supply chains and practises, we could suggest that in Brazil, whereas yet we do not have this kind of legislation, the Index has become an important tool to encourage discussion on the importance of transparency in supply chains. According to Rafaela Carl, in the sustainability team at Hering, the Index is “a tool that helps to strengthen the supply chains of the fashion industry and leads us towards evaluation and development of our practices for social and environmental management.”

13 brands are not disclosing anything

No brand has scored over 70%

If, on the one hand, we see that some companies have started to disclose more information about their social and environmental policies, practices and impacts, taking on a leading role regarding the issue, there are still many brands that show a very low level of transparency.

Even though our research this year showed a significant improvement of 39%11 in the average score of the 20 companies reviewed in both editions, we clearly see that even the leading brands and major retailers still have a long way to go. This presents a significant untapped potential to boost transparency where it relates to their supply chains and to increase detailed publicly available information regarding the results and impacts of their efforts.

The brands that have scored zero points in the analysis for 2019 add up to 43% of the total number of brands reviewed, namely: Brooksfield, Carmen Steffens, Cia. Marítima, Colcci, Colombo, Dumond, John, Le Lis Blanc, Leader, Lojas Avenida, Moleca, Olympikus and TNG. This shows a slight increase from 40% in 2018 to 43% in 2019 in Brazil, and a complete different result if we compare it with the 2019 global index, in which only 5% of brands reviewed (10 out of 200), scored zero.

We must point out that we are not judging the ethical performance or sustainability of the brands, but just how much information they publicly disclose about their product supply chains as well as human rights and environment policies, practices and impacts.

11. Corresponds to a 6.4 percentage point increase in the average performance of the 20 brands reviewed in 2018 and 2019, which moved from 16.51% to 22.91%. Thus, 22.91 / 16.51 = 1.39, which means an increase of 39%.

More information about policies than about practices and impacts As shown in 2018, brands continue to provide greater disclosure when it comes to their policies and commitments, with an average score of 28% in this section of the questionnaire. On the other hand, they publish much less information about the results and impacts of their social and environmental practices. For example, the average score among the 30 brands in the Know, Show and Fix section is only 10%, and in the Spotlight Issues section, where we conduct a detailed analysis on

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EXECUTIVE SUMMARY some of the more urgent problems facing the fashion industry, brands reached an average score of only 9%.

Comparing these results with those on the global Index, we see that companies in Brazil are a bit behind. Indeed, globally the average score in Policies and Commitments came to 48%, while the Know, Show and Fix section and also Spotlight Issues had average scores of 14% and 17% respectively.

Brands have made great progress in disclosure of their supplier lists Out of the 30 companies analysed, we see that ten companies (33% of the total) publish a list of their direct suppliers, at Tier 1, and ten (33%) are also disclosing their premises for processing and finishing – where processes such as knitting, weaving, wet processing, embroidering, printing, finishing, dyeing and rinsing happen – making the Traceability section reach an average score of 17%, compared with 12% in 2018.

These results show an increase in the average score for the Traceability section, by 39% between 2018 and 2019, and if we limit ourselves to the 20 brands that were analysed in 2018, this increase soars to 108% from one year to the next, in this section alone.

In relation to the global index, Brazil is ahead in this section, as the average score for this section within the global Index was only 12%, with 70 (35%) of the 200 brands reviewed disclosing their Tier 1 suppliers, and 38 (19%) publishing their units for processing and finishing.

What brands share about their strategies to manage environmental impacts The global textile industry is responsible for 2% of the world’s greenhouse effect gas (GHGs) emissions12. If we continue to produce at the current rate, it is estimated that the impact of the fashion industry on the climate shall increase by 49% by the year 2030 – the same as the

12. https://www.ellenmacarthurfoundation.org/assets/downloads/publications/A-New-Textiles-Economy_Full-Report.pdf 13. https:// quantis-intl.com/measuring-fashion-report-2018/ 14. https:// quantis-intl.com/measuring-fashion-report-2018/

annual volume of GHG emissions in the United States, according to Quantis13.

Considering the need to act urgently, with regard to climate change, and also analysing what major fashion brands have disclosed about their efforts to reduce environmental impacts across their supply chains, we ask ourselves if they are doing enough.

Out of the 30 brands analysed, only 5 (17% of the total) annually publish data on their GHG emissions of GHG across their own company premises (for example: administrative headquarters, retail shops, distribution centres, warehouses, transport and dispatch of orders), but only three of them (10% of the total) disclose GHG emissions in their supply chains – where over 50% of emissions occur, according to Quantis14.

While 10 brands (33% of the total) publish some kind of strategy or roadmap for using sustainable materials, only 5 (17% of the total) actually disclose the percentage of

the annual volume of products that are made with sustainable materials.

9 brands (30% of the total) publish commitments or targets that are measurable in the long term, with defined dates, for the reduction of their environmental impacts.

Even so, in spite of all the media coverage of major brands burning unsold stock last year, we observed that only 9 (30%) of these brands described their strategies to reduce excess stock and pre-consumer waste (for example: offcuts and scraps, unsold or defective stock, production samples).

In the meantime, only 4 (13%) of brands disclose whether they have permanent take-back recycling schemes and how they are investing in circular solutions to reduce textile waste.

Considering that the fashion industry employs so many women, brands should share much more information about how they are dealing with issues of gender equality

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EXECUTIVE SUMMARY In Brazil, women account for 75% of labour in the fashion industry15, but we still see a significant lack of information and data that would prove the efforts that brands and retailers have made to preserve their rights, empower women and girls, and achieve gender equality throughout the value chain of the fashion industry.

Only 3 (10%) brands disclose projects for skills training in the supply chain with a focus on gender equality or empowerment of women, and not a single brand publishes data on the prevalence of violation of labour legislation with regard to gender at suppliers’ premises.

Only 6 (20%) of brands publish policies on equal pay, and only 3 (10%) disclose the gender pay gap between men and women within the company.

Very few brands publish information about racial equality and discrimination on the basis of nationality

After a review of the global Fashion Transparency Index methodology for its adaptation to the Brazilian context16, we have identified two important issues at a local context that were integrated into the national Brazil Index methodology questionnaire. These consider the way in which brands are approaching the issue of racial equality and the integration and treatment of migrants, both within their own units and throughout the supply chain. In this regard, only 2 companies (7%) disclose data about the ethnic makeup of the company’s own workers, as well as actions related to the integration and treatment of foreign migrant workers in their supply chains.

In the meantime, only one company publishes its actions focusing on the promotion of racial equality within the company’s workforce (for example: creation of a company culture that favours racial diversity, including the presence of Afrodescendant employees in executive and management positions, or the promotion of the racial equality related to the recruitment of newly hired workers).

15. https://www.abit.org.br/cont/perfil-do-setor 16. Learn more about the methodology review in ‘Adaptation of the methodology to the Brazilian context’ in chapter 2

Brands are disclosing very little information about their purchasing practices What have fashion brands been doing to be responsible commercial partners for their suppliers? We note that there is almost no information and data disclosed about the purchasing practices of these large companies.

Only 3 (10%) brands provide information in the ‘Purchasing Practices’ subsection of the questionnaire. Zara discloses its policy regarding payment to suppliers with a maximum payment window of 60 days, while C&A and Renner disclose their formal procedures for getting feedback from the suppliers about their purchasing practices.

None of the brands disclose the method used to isolate labour costs when negotiating prices with their suppliers, or the way in which these labour costs are calculated (including salaries, overtime, social charges, sick leave, holiday entitlement, paid leave, and the cost of indirect labour).

Similarly, not a single company publishes the percentage of payments

to suppliers made within the time frame and according to the terms as agreed – which is a serious problem for the suppliers, as this could affect their ability to create regular jobs and make fair and on time payments to their employees.

As the brands expect trust and transparency from their suppliers, we reach the conclusion that they should also make more information publicly available, with regard to their own commitments and efforts to become responsible partners.

How we plan to act with regard to this analysis The Fashion Transparency Index has been a useful tool for opening dialogue with the leading fashion brands and retailers around the world about what they can do to become more transparent. We believe that this is the first step towards influencing brands to be accountable for the human rights and the environmental impacts of their business activities.

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EXECUTIVE SUMMARY In many ways, major fashion brands and retailer around the world have played an important role in contributing to the climate crisis and are partly accountable for poor working conditions and poverty level pay that persists in global supply chains. The current production model clearly does not work for the environment or for the many people who work for very little pay throughout the supply chain in the fashion industry. However, this can change, and major fashion brands have an important role to play.

Leading fashion brands and retailers have the moral obligation and the capacity to make changes on a global scale for many people across the supply chain. This puts brands in an important position of power to make positive change.

The way the industry is operating right now cannot continue on current levels of production and consumption; it is simply not sustainable even if the systems are designed to be much more restorative. In other words, brands will need to innovate and use fewer resources to make products as

well as encourage their customers to consume less, take better care of their clothes and use their clothes for a longer period of time.

We shall continue to use the Index as a measure of progress among major fashion brands and retailers along the path to transparency, and to incentivise them to disclose more information about their social and environmental policies, practices and impacts.

By the time we produce the 2020 edition of this Index, we hope to see even more brands and retailers disclosing information about their suppliers. We would like them to publish more detailed information about the results of their efforts to improve working conditions, human rights and environmental sustainability in their supply chains. And, last but not least, we shall continue to encourage the sharing of much more information about their purchasing practices, actions to reduce waste and pollution and also their efforts to achieve gender equality for women throughout the industry.

" To make public and transparent the commitment taken on by the organisations that have signed the Global Pact is a good thing, these organisations should disclose the progress made with regard to our ten core principles.

Only transparency allows the appraisal of the advances, changes, and impacts of an organisation.

However, without measurements, the evaluations shall be purely subjective. This means that no sustainability is possible without transparency and indicators. For this reason, for us here at the Brazil Network of the Global Pact, we are very pleased to support the Brazil Fashion Transparency Index, as the presence of better indices means progress in our business practices."

MARCELO ABRANTES LINGUITTE PARTNERSHIPS, PROJECTS AND RESOURCES MOBILIZATION GLOBAL COMPACT NETWORK BRAZIL

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1 WHY TRANSPARENCY?

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WHY TRANSPARENCY MATTERS IN THE FASHION INDUSTRY The lack of transparency can cost lives

Fragmented supply chains obscure accountability

When Rana Plaza collapsed six 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 producing clothes in one of the five garment factories operating in the building.

The vast majority of today’s fashion brands and retailers do not own their manufacturing and supplier facilities, making it challenging to monitor or control working conditions and environmental impacts 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.

In some cases, it took weeks for brands and retailers to determine why their labels were found amongst the ruins and what sort of purchasing agreements they had with those suppliers. Many clothing brands sourcing from the factories inside Rana Plaza didn’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 our garments. There are many facilities further down the chain that weave, dye and finish materials and farms that grow fibres used in our clothing. During the manufacturing process our clothes pass through many pairs of hands before they ever reach the shop floor or, increasingly, the screens of our phones and computers.

Unfortunately, factory fires and accidents, poor working conditions, dangerous pollution and exploitation of garment workers remains rampant in the global fashion supply chain six years after Rana Plaza.

[TOP] 'Dhaka Savar Building Collapse' by rijans via Flickr CC [Bottom] 'Bangladeshi garment workers block a road during a demonstration to demand higher wages in Dhaka

by RTE

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A brand might place an order with one supplier, who in turn subcontracts the work to another facility if they need to meet a short deadline or require a special process to be done.

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 facilities are not the only places where poor conditions persist - sometimes it’s right under our noses in factories and communities close to home too.

Transparency as the first step towards change Right after the Rana Plaza factory collapse happened, it became very clear to us that the fashion industry needed urgent, transformative change, and that the first vital step towards this change required 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 impacts.

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Progress is happening but it is still difficult to know #whomademyclothes Of course, much has changed since Rana Plaza, especially in Bangladesh.

Many factories have been upgraded, and with all the attention 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 almost 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.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

This is why we are still calling for a revolution of the fashion industry.

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. The women who make our clothes continue to face regular and systemic discrimination and sexual abuse. Pollution and waste created as a result of the way our clothes are produced and consumed continues to damage our ecosystems.

People want to know #whomademyclothes Consumers don’t want to buy clothes made by people working in danger, exploited, paid poverty-level 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, and the Fashion Transparency Index is one of the tools that helps us do this.

When we are equipped with more — and better quality, credible — information about the human and environmental impacts of the clothes we buy, we are able to make more informed shopping choices. As a result, transparency builds trust in the brands we buy.

People are increasingly asking for greater transparency from the fashion industry. In April 2019, our campaign was bigger than ever before with many thousands of people calling for systemic change by organising and participating in events, contacting brands and policymakers and sharing information with others through social media. Fashion Revolution’s hashtags were used 178,000 times on social media, including #whomademyclothes, #imadeyourclothes and #fashionrevolution.

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Transparency helps facilitate remediation of human rights and environmental abuses As Jenny Holdcroft, Assistant General Secretary of IndustriALL Global Union, explained in previous editions, “knowing the names of major buyers from factories gives workers and their unions a stronger leverage, crucial for a timely solution when resolving conflicts, whether it be refusal to recognise the union, or unlawful sackings for demanding their rights.

It also provides the possibility to create a link from the worker back to the customer and possibly media to bring attention to their issues.”

Greater transparency can help brands engage and collaborate with trade unions and civil society groups to identify and remedy problems more quickly, if the relevant information is available and easy to find. Transparency also helps others discover best practice examples and positive stories from the supply chain that can be highlighted, shared and potentially replicated elsewhere.

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CASE STUDIES: TRANSPARENCY IN ACTION

Example of how transparency can bring improved conditions for garment workers Blockchain is a technology that allows the mapping of supply chains and the sharing of decentralised information, operating like a digital, public and shared database. In the fashion industry, its application, together with other practices, allows traceability and transparency of production processes for items of clothing.

In 2019, the Alinha Institute implemented the blockchain technology in its aligned workshops, as a way of showcasing the history behind clothes. According to Dari Santos, the social entrepreneur heading the Institute, “it is already possible to note a leap in the average price received per piece, by a seamstress.

While informal sewing shops receive an average of BRL 6.00 to 7.00 per piece sewn, once the pieces have been formalised and are traceable by block chain, the average value observed rises to BRL 17.50. This shows the importance of transparency and traceability to ensure fair conditions and prices”. Access to what happens behind the scenes of supply chains within the fashion industry not only boosts visibility for the people behind our clothes, but also encourages the promotion of best practices along the different phases, making it possible for the worker’s rights to effectively be improved and upheld.

"In our survey of over 5,000 consumers across Europe, 80% said that fashion brands should disclose their manufacturers."

FASHION REVOLUTION & IPSOS MORI NOVEMBER 2018

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" I came over from Bolivia to Brazil, looking for a better and calmer life for me and my children. I came without a penny to my name, without knowing anyone, and without understanding the language. In the beginning, I worked in a garment factory, but it was very difficult for me to change from freedom to working as a slave, unable even to give my children medicine when they were ill. Some time later, I went to work with relatives, who made me believe I could open my own garment factory. It was a blessing to receive support from the Tecendo Sonhos (Weaving Dreams) project of the Aliança Empreendedora.

This was how it all started: I opened my garment factory, regained our freedom, and managed to keep my children at school. I had goals and dreams once again. Now I see, as a woman, seamstress and immigrant, that transparency in the fashion industry supply chain is very important so we may value and strengthen new knowledge, also being a great benefit to my business. I have become another person, now I am a visionary with higher self-esteem."

MARÍA ROSA NINA SINANI ENTREPRENEUR AND SEAMSTRESS AT MODAS JHAYLE TOQUE DIVINO PARTICIPANT OF THE TECENDO SONHOS (WEAVING DREAMS) PROGRAMME OF ALIANÇA EMPREENDEDORA

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VIEWPOINT: The main benefit of transparent systems is the protection of group interests, in prevalence over interests of minorities – which have the power and the information.

It is possible to offer choices based on quality information that provide guidance in taking decisions, rather than just misleading people to over a “place of illusion”.

MÉRCIA SILVA EXECUTIVE DIRECTOR InPACTO

Transparency is an act of responsibility that allows the establishment of equity between peers or parties.

Without transparency, it shall not be possible to establish common references, and thus take shared decisions about any matters. Without transparency, what we have is a concentration of knowledge, doings or information on different sides or parties, which affect the relationship of power at moments of negotiation of on agreeing paths of action.

Being transparent, each and every party generates knowledge and contributes to dialogue. There is a chain of custody in the process towards growth, impacting all those involved. This is not a simple matter, and neither does it occur overnight, as this is a large cultural change, it is a matter of adapting the current model for doing business. It is also a case of adapting and changing a structure of power. This shall change business relationships of purchase and sale; referencing values, speculation of some with regard to others; exploitation of the weakest links; equality between genders and races (or ethnic groups); environmental aspects; and investments in major work and projects. It also affects the way in which each individual may interact within the general context of action.

Transparency as a business practice encourages an exchange of knowledge.

When a supplier of a company knows that he or she must inform or update data, there is an immediate transfer of common reference: what information must I provide, and why? This generates a chain of actions and procedures that generate new organisational capacities to generate this information.

In essence, after all, we are all consumers, even though at some moments we can take up an additional position in the fashion supply chain or in the production system.

This means that what is learnt based on one reference or point of view may help action based on a different viewpoint or perspective.

A professional person working in a company with transparency feels safer, as there is collective protection, even though there are clear limits. If this professional person takes on a new role elsewhere, where power structures leave a lot of hidden spaces of information and decision, this generates a feeling of insecurity and doubt about the actions of other departments, colleagues or suppliers. This, in turn, brings many elements of doubt about actions that effect the person’s decisions. There subjectivity can impregnate the whole decision-making process and the activities of each individual person within the structure.

Most importantly for the fashion industry (always being in the spotlight), being present based on direct communication with the world, transparency can also be an important element for the change in culture of this sector. The current model brings elements of frailness, where confidence between peers is weakened. It being weakened, the ability to respond to the challenges is also made more fragile. The fragmentation of “true” information, linked to the poor degree of trust between the players, generating a system of blaming each other, and a lack of an effective common/group effort and answer.

If there is more transparency, this will encourage group effort within this sector, where more sustainable practices shall be referenced and adopted, and where bad practises shall be identified, requiring processes for adjustment and development of these points, thereby generating overall changes within the sector.

There is a slow increase in companies that have taken up some measures for transparency. However, it is important to stress that transparency must not be limited to one specific point or one measurement, but should rather be a transversal process within companies. I believe that some companies have courageously adopted the measure of providing transparency of their suppliers, which is an important act, albeit an initial one. There is a need to create other strategies for transparency along different axes or perspectives for doing business better.

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WHAT DOES TRANSPARENCY MEAN? For Fashion Revolution, transparency is the public disclosure of credible, comprehensive and comparable data and information about fashion’s supply chains, business practices and the impacts of these practices on workers, communities and the environment.

Transparency can enable greater accountability

When we talk about greater transparency, we are seeking public disclosure, by companies, of their supplier relationships, and also their social and environmental policies and commitments, goals, targets, governance, performance and progress.

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 fibre. And crucially, this requires brands to trace the journey of their products right down to the raw material level.

It requires that brands monitor and measure their outcomes and impacts, not just share their values and policies.

Transparency is not just sharing the good stories or disclosing only compliant, well-performing suppliers, but above all, addressing the whole context and allowing scrutiny from stakeholders, which helps drive faster improvements across value chains.

We ask brands to share information publicly so that we can collectively scrutinise all tiers of the supply chain, identify the best and worst practices and hold brands to account.

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transparency accountability change

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Transparency is not selective disclosure to third parties, we want to see public disclosure Some brands opt to disclose supply chain information to selected multistakeholder groups or trade unions rather than publicly and have done so for many years in order to manage their risks and solve issues. However, we feel this is not enough. Health and safety incidents, widespread abuses and even deaths are still happening and potentially can be solved faster if information is more freely available.

Being transparent does not necessarily mean acting ethically and sustainably We want to stress that transparency is not to be conflated with brands behaving ethically and sustainably.

This report is not looking at which brands are more environmentally friendly or conducting business more ethically than others. A brand may publish a considerable amount of information and data about their policies, practices and impacts and still have poor working conditions and environmental degradation happening in their supply chains. Conversely, brands may be doing all sorts of good things behind-the-scenes but don’t talk about them publicly. It’s a shame not to share publicly, as other brands could have much to learn from them.

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Transparency is a tool for change, not the goal itself Transparency by itself will not solve the industry’s problems, but it provides an important window into the conditions in which our clothes are being made.

What we each do with the information being disclosed by big brands and retailers is most important of all. It is with access to information that we hold brands and retailers, governments and suppliers to account. We see transparency as the first step towards wider systemic change for a safer, fairer and cleaner global fashion industry.

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T R A N S PA R E N C Y

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

“ None of the main issues which humanity is facing will be resolved without access to information."

CHRISTOPER DELOIRE SECRETARY GENERAL, REPORTERS WITHOUT BORDERS, 2018

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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TO ACHIEVE SYSTEMATIC CHANGE, WE RECOGNISE 4 IMPORTANT ASPECTS:

i It is 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 overconsumption and unsustainable business models.

We believe the first step is greater transparency. This will entail consumers, brands and retailers, governments and citizens each taking 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 the 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. This report is one tool that helps consumers and other stakeholders better understand what major brands are doing.

Transparency isn’t just for transparency’s sake. The data and information disclosed by companies needs to be accessible 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.

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VIEWPOINT: dialogue and other experiences in working towards horizontal practices with greater plurality existing in the group setting out from a common point, which is the full life cycle of the product.

CAROL DELGADO ANTHROPOLOGIST, RESEARCHER AND FOUNDER OF PUXADINHO

trans.pa.ren.cy noun.

1 characteristic of letting light and shapes through that certain materials have ¬ opacity 2 something that is transparent 3 fig. clarity, limpidity <t. policy> ¬ obscurity 4 a sheet of translucent material, on which texts, drawings etc are written or printed, for projection1.

One of the facets I like most when thinking of fashion and transparency is definition number 4, from the pocket version of Houaiss, a leading Brazilian dictionary: ‘A sheet of translucent paper, on which one prints or writes text, drawings etc for projection”.

I believe this could be the most important contribution of the fashion system for the future: the fact of being a white screen, on which one can find

Based on this Utopian meeting, and an inventive form of freedom that is more and more aimed at methods of coexistence that are both critical and transforming, transparency takes the shape of a concept in movement, weaving points of contact with different experiences that are currently being organised in a hierarchical and traditional manner within the chain, causing this sickening feeling with regard to the market of trends, and the feeling that, from here on, “it shall just be more of the same”.

In “Society of Transparency”, Korean philosopher Byung-Chul Han points out the risks involved in going in the direction of “plastic” transparency, where materiality needs to be exposed – indeed, exposure starts to be more necessary than its very existence, as a process in itself – within a society that is dominated by “publicitising” discourse and practices that show themselves to be more and more contrary to the spirit of time connected to wider concepts of nature and humanity.

" I believe that practices of transparency in fashion should not be an end in themselves, and need to work as a spark to start other deep transformations, starting at “the beginning”: restoring human relations within the chain."

Indeed, how can a sector battling it out for a leading role within the hall of new economies not start sincere conversations regarding their contradictions and deep paradoxes?

To speak about something really new, that we have never seen happen for as long as we have bought clothes, one key step is that more people – we must be aware of quantitative issues concerning ethnicity, gender and class – must be involved in trying out other practices. There we have yet another important point: who has access to the time to “try out” a practice seeking profits, the whole time? Is there a possible plurality and innovation within the current “caste system” which is present throughout the chain and the cycle of product: from the plantation of the raw materials, to post-donation at a church bazaar?

Association of transparency with relevance, truth and commitment. And we must create as many practices as possible that are confluent with the futures that we want, right from the starting point of the supply chain, and not only in the reports sent by the press relations department. Are we ready for this? To look within so many segments, people, and stages of the factory units, suppliers, and decision makers, and say: Let us, together, build processes that are aligned with the changes in direction that the world needs?

Based on over a decade of research, engagement and observation of non-hegemonic processes within the sector, and bringing proposals from contemporary anthropology that could help with this movement, I believe that, within the Brazilian fashion industry, transparency shall start to become reality when other voices join up with the decision powers and the right to experimentation. Without any respect for alterity, clothes production is just another market niche.

1. Portuguese definition as in dictionary: trans.pa.rên.cia s.f. 1 característica de deixar passar luz e formas que certos materiais têm ¬ opacidade 2 o que é transparente 3 fig. clareza, limpidez <política da t.> ¬ obscuridade 4 folha de material translúcido na qual se imprimem ou escrevem textos, desenhos etc. para projeção

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" For us to really manage to implement worthy work relationships within the textile production chain, it is essential that there be work with different players of the sector working together in complementary fashion, with transparency and co-operation.

Moreover, here we need to talk about women, seamstresses and immigrants, who are currently the most disadvantaged within fashion supply chain. Transparency is giving voice and visibility to these women, increasing the responsibilities of all parties involved: consumers, brands, intermediaries, retailers, and family members, for the promotion of improvement in conditions of employment."

CRISTINA FILIZZOLA DIRECTOR OF SÃO PAULO BRANCH, ALIANÇA EMPREENDEDORA CO-ORDINATOR OF THE ‘TECENDO SONHOS’ (WEAVING DREAMS) PROGRAMME

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2 ABOUT THE FASHION TRANSPARENCY INDEX

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WHY DO WE CARRY OUT THIS RESEARCH?

Fashion Revolution has been asking for greater transparency throughout the fashion industry since 2013, and our #whomademyclothes social media campaign, has already inspired millions of people around the world to act.

To build on this question, we wanted to create a tool that would help people better understand what transparency means in practice, especially when we are dealing with major brands and retailers.

It was in this context that the Fashion Transparency Index came into being, as a way of helping consumers and other interested parties to know a bit more about the brands and about the origin of the products that they buy. A complete

view of the whole production process allows one to understand important aspects about a certain brand, well beyond what the brand publicises in its advertising campaigns. For example, many of the brands included in the Index selling special ‘sustainable fashion’ collections. However, what about the rest of the products, how are they made? Where are the clothes produced, and in what conditions?

Furthermore, we seek to create the following: •

comparison tool that helps A consumers and other interested parties to better understand the level of information that the major brands and retailers are disclosing;

•

A tool to incentivise major brands and retailers to disclose more credible, comparable and detailed information year-on-year, by using the competitive nature of business performance;

•

An ongoing exercise that helps Fashion Revolution to shape its own understanding of what transparency entails and what we should ask from major brands and retailers in the future.

What information should we expect to find about major brands’ human rights and environmental policies and practices?

What effects do these practices have on the people involved in their supply chains? These are just some of the issues addressed by the Fashion Transparency Index.

" We developed the Fashion Transparency Index as a tool to scrutinise what major fashion brands disclose about their human rights and environmental policies, practices and impacts."

SARAH DITTY POLICY DIRECTOR, FASHION REVOLUTION

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THE METHODOLOGY

1.

POLICY & COMMITMENTS - What are the brand’s social and environmental policies?

- How is the brand putting these policies into practice?

- How does the brand decide which issues to prioritise?

- What are the brand’s future goals to reduce its impact?

2.

The Fashion Transparency Index uses a ratings methodology which benchmarks brands based on the public disclosure of their information within five sections as follows: policies and commitments; governance; traceability of the supply chain; supplier assessment and remediation; and spotlight issues including gender equality, decent work, sustainable production and consumption, and action against the climate crisis. This year, the spotlight issues are linked to four of the UN Sustainable Development Goals, the SDGs.

3.

4.

5.

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

- Is there board level responsibility for the company’s social and environmental impacts?

- Does the brand publish a list of suppliers, covering all stages from the manufacturing through to raw materials?

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

- Is it possible to easily get in touch with the department or a person responsible for answering about the brand’s work to improve its social and environmental impacts?

- If the answer is yes, how detailed is this information?

- (SDG 5) What is the company doing to promote gender equality and the empowerment of women, both internally and along the supply chain?

- How does the brand link issues concerning human rights and environmental aspects with the evaluation of the performance of their executives, employees and suppliers?

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

- Does the brand disclose assessment findings?

- How can the workers report complaints?

- (SDG 8) What is the company doing to ensure the payment of living wages, while promoting freedom of association, racial equality, and the regularisation of immigrant workers?

- (SDG 12) What is the company doing to tackle waste and reduce pollution, as well as to promote practices for reuse and recycling of the products?

- (SDG 13) What is the company doing to tackle climate change and to make sure of a sustainable and efficient management of natural resources?

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WEIGHTING OF THE SCORES

1.

The methodology used in the Fashion Transparency Index concentrates exclusively on publicly disclosed information. 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.

We are rewarding granularity.

2.

POLICY & COMMITMENTS

TOTAL POSSIBLE POINTS (250) WEIGHTING (%)

3.

GOVERNANCE

It is important to remember that when the brands get a score of zero in one particular indicator, that does not necessarily mean that something is wrong. It could just mean that they are not yet disclosing information related to this issue .

4.

TRACEABILITY

5.

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

49

12

85

67

37

19.5%

4.8%

34%

26.8%

14.8%

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ABOUT THE METHODOLOGY

The first ever methodology for the Fashion Transparency Index was created by Ethical Consumer1 in 2016, with input from Fashion Revolution.

Then, in 2017, Fashion Revolution took over the development of the Index and made a considerable overhaul of the methodology. We spent four months consulting a diverse group of more than 20 industry experts on this revision process.

We have updated the methodology again in 2019, making small changes for clarity, tweaking a few indicators to make it more ambitious and selecting new Spotlight Issues, including the addition of indicators related to the United Nations’ Sustainable Development Goals (SDGs).

At present, the methodology covers 202 indicators in the global Fashion Transparency Index and 208 in the Brazilian index2.

Consultative input and feedback were provided from a committee of pro bono industry experts, including: •

Dr Mark Anner, Director of 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

•

Kate Larsen, SupplyESChange Initiative

•

Dr Alessandra Mezzadri, SOAS, University of London

•

Joe Sutcliffe, Advisor - Dignified Work, CARE International

•

Heather Webb, Ethical Consumer

And several other experts who preferred to remain anonymous at the present time.

The methodology is based on international standards and benchmarks such as the UN Sustainable Development Goals, the UN Guiding Principles on Business and Human Rights, the Organisation for Economic Cooperation and Development (OECD), Due Diligence Guidelines Ethical Trading Initiative Base Code, and Fair Labor Association’s Freedom of Association guidelines. It was also developed with the intention of aligning itself as much as possible with other relevant benchmarks and initiatives in the sector, including the Transparency Pledge, Corporate Human Rights Benchmark and Know The Chain.

1. Ethical Consumer is a printed magazine and also a non-profit site which publish information about social, ethical and environmental behaviour of companies and issues related to commercial fairness and ethical consumption.

2. Find out more in ‘Adaptation of the methodology to the Brazilian context’

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ABOUT THE METHODOLOGY

Adaptation of the methodology to the Brazilian context For the implementation of the first edition of the Brazilian version of the Fashion Transparency Index, in 2018, Fashion Revolution Brazil had the partnership of FGVces (Sustainability Studies Centre of the GetĂşlio Vargas Foundation), which acted both in the adaptation of the methodology to the Brazilian context and also in carrying out the survey.

This adaptation occurred mainly in the Spotlight Issues section, where there is the possibility of selecting new topics, recently trending and of great urgency, for the local context.

At that time, having researched and consulted different specialists within the Brazilian industry, we concluded that it would be important to address

issues related to racial equality and to the working conditions of migrants hired to work in the fashion industry. Only a few adjustments were made, meaning that the processes of analysis were kept strictly the same, without causing any harm to the comparability of the results with the global methodology.

In 2019, we continued our work to revise the content and the structure of the questionnaire with the same techincal partnership team, which now works in the name of consulting firm ABC Associados. As was the case the previous year, this team also gave us support in the phases of identification of the brands to be reviewed in the Index and in conducting their respective evaluations.

It is also important to note that there could be different information for brands included in both Indices, the global version and the Brazilian version, due to the time of year when the research was carried out for each report. Each analysis used the most recent information available when the analysis was conducted, and this could have led to differences in the final scores of the brands reviewed in both global and Brazilian indices.

In addition, in the Brazilian Index, a company's performance progresses (and any other performance comparisons) are presented in proportional terms by calculating the growth rate rather than the percentage increase or decrease, as in the Global Index report. For example, if a company performed 20% in 2018 and 30% in 2019, in this report we say

that it has improved its performance by 50% (which means 10 percentage points over 20 in the previous year) but the Global Index would describe it at a 10% increase in the score.

We accept the fact that this methodology is not perfect, and that there is always room for improvement. In view of this, comments and suggestions about how this questionnaire can be improved or enhanced are welcome and should be sent by e-mail to brasil@fashionrevolution.org.

For more information, please click here to download the template of the Brazilian questionnaire, as sent to the fashion brands in this edition.

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UPDATES TO THE METHODOLOGY

Our annual revision process Each year our policy and research team reviews every methodology indicator for clarity and makes amendments where we feel the wording could be clearer. We also consider the wider methodology in the context of recent industry developments, with special attention to any new laws and policies, reporting standards and emerging trends.

We make amendments to relevant indicators where we feel they might better align to these recent industry developments and to ensure the Index remains a driver of best practice.

Sections 1 to 4 of the methodology have stayed largely the same since 2019, having had only minor updates made to some of the indicators to ensure better alignment and greater clarity.

For any other changes to existing

indicators and inclusion of additional ones, we have gathered feedback from our specialist pro bono advisors.

Spotlight Issus selected for 2019 Because we have observed many companies take steps to align their goals and strategies with the Sustainable Development Goals (SDG's) we decided to highlight four of the seventeen SDGs that are particularly relevant for the global fashion industry, including: •

SDG 5: Gender equality

•

SDG 8: Decent work

•

SDG 12: Responsible consumption and production

•

SDG 13: Climate action

Within these four core goals, we concentrate on issues that our team and our advisors have identified as being some of the most urgent challenges in the industry, including: gender-based violence in the workplace, the gender pay gap, freedom of association, living wages, purchasing practices, textile waste and recycling, circularity and carbon footprint.

For the adaptation of section 5 in the Brazilian questionnaire, within the scope of SDG 8, four additional indicators were added to address the issues of racial equality and discrimination between nationalities.

How this affects the scoring year-on-year Considering that these adjustments to the methodology occur every year, it is possible that there could be some impact on the direct comparability of results between one issue of the Index and another.

This is why we would like to emphasise focusing on the range in which brands score rather than their individual scores. The ranges reveal patterns of disclosure and trends in transparency rather than precise measurements.

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CRITERIA FOR THE SELECTION OF THE BRANDS The process for choosing the brands evaluated was carried out jointly by the teams of Fashion Revolution Brazil and ABC Associados, with the basic criterion that this second edition of the Fashion Transparency Index Brazil would analyse 30 brands. We understand that the size of the sample is still not enough to represent the Brazilian fashion market as a whole, and therefore we have chosen brands from different segments to cover the diversity of the sector. This covers brands representing the following market segments: denim, clothes for young people, casual wear, luxury attire, adult wear, footwear, sportswear and beachwear.

In cases where the information found refers to a group that has several brands, we have selected the brand, or brands, that appear to be most significant in terms of turnover and by consumer recognition (Top of Mind). We have intentionally listed the brands and not the parent groups, as consumers are more used to brands rather than the group name.

30

H OW M A N Y B R A N D S TO O K PA R T I N 2019

50%

30%

Filled in the questionnaire

Did not answer

The 20 brands and retailers reviewed and evaluated in the 2018 report have been kept on in this edition, with the addition of a further 10 brands. In 2020, we plan to continue increasing the number of companies analysed.

The selection of the brands in each segment was based upon three factors: business size by annual turnover; the diversity of market segments; and the position of the brand as Top of Mind1.

We relied on publicly available financial information to select brands and retailers. Some companies are privately held and do not publish financial records, including turnover, which means we may not have found them in our research.

1. Top of Mind is a term used as a way of establishing the brands that are most popular, according to the consumersâ&#x20AC;&#x2122; minds.

20% Declined the opportunity to fill in the questionnaire

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THE 30 BRANDS SELECTED

Animale Arezzo * Brooksfield Carmen Steffens * C&A Cia. Marítima Colcci * Colombo * Decathlon * Dumond *

Ellus Farm Havaianas Hering John John Le Lis Blanc Deux Leader * Lojas Avenida * Malwee Marisa

Melissa Moleca Olympikus Osklen Pernambucanas Renner Riachuelo TNG * Torra * Zara

* 10 companies that have been added to the analysis in 2019.

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HOW THE RESEARCH IS CONDUCTED The process of the research is divided into three phases. In the first phase, the team carries out a preliminary study of the data using information made publicly available by brands. We include what we have found in the brand questionnaire. Next, in the second phase, the questionnaires containing this preliminary information are sent to the brands themselves, so that each may identify and include information that may not have been found by our research team. For this version of the Index, the brands had about a month to revise and complete the questionnaire.

Finally, in the third phase, the completed questionnaires were once again evaluated by our team. Only when appropriate was the information included by the brands accepted and points awarded.

Some brands declined to participate in the second phase of the evaluation process. However, we stress that our researchers have evaluated and scored all the brands regardless of whether they have received the feedback of the questionnaires they have completed. Again, it is also important to remember that the methodology is based exclusively on the analysis of publicly available information.

The data research was conducted by the teams of Fashion Revolution Brasil and ABC Associados. Should you notice any errors, we suggest you contact us by e-mail at brasil@fashionrevolution.org and we shall take the comments into consideration for the following edition.

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ABOUT THE RESEARCH AND ENGAGEMENT PROCESS August - December 2018 Updates to global methodology: annual review of the methodology and brand questionnaire, including adjustments when necessary, as well as the selection of new Spotlight Issues.

July - August Final review of the questionnaires: after about a month, the brands return to the completed questionnaires and the research team analyses each answer, awarding additional points, provided the new information brings sufficient evidence for what we are seeking. In this stage of the process, there are many review rounds carried out by the team, to make sure of the accuracy of the data before the final scores for each brand are established.

April Updates to the Brazilian methodology: annual review based on the adjustments made to the global methodology and the need for possible adaptations to the Brazilian context. Selection of 10 new companies to be included in the survey.

June Questionnaires sent to the brands: the brands are invited to fill in the questionnaires with any additional data that our research team may not have found and/ or more up-to-date public information.

September - November The data is compiled, the analysis is completed, and the report is then prepared: the data of all the questionnaires from the different brands is then transferred to a tool for the joint analysis of complete data (dataset). The dataset is used as a base for the production of this final report.

May

Research and engagement with the brands and the retailers as selected: the research team analyses each brand, first filling in the questionnaire for the Index with all the publicly available information as found. Next, there is a review round to check the accuracy of the answers as found. At the same time, two meetings are held with representatives of the brands, for the presentation of the project, promotion of thoughts about the importance of greater transparency and to explain the methodology and research process for the Index.

December 2019 Launch of the Fashion Transparency Index Brazil: the 2019 edition is launched online and at an event in SĂŁo Paulo.

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HOW THE SCORING WORKS How brands and retailers are scored

Other aspects to be considered

The scope of the research

The points are assigned based exclusively on the information made publicly available through the following channels1:

The individual brand scores are not as important as the ranges in which they have scored.

The Fashion Transparency Index was developed to provide an illustrative reference benchmark regarding what the companies know, and what information they share, about their value chains. We have deliberately decided to concentrate specifically on transparency through public disclosure of information, or behind the scenes at companies and supply chains, rather than on everything that brands and retailers are doing internally or behind the scenes at their companies and supply chains.

This is because transparency allows a more complete examination by consumers and other stakeholders interested in understanding a brands sustainability efforts.

•

Website of the brand/retailer;

•

Website of the group to which the brand/retailer belongs (provided it is linked to the main website of the brand/retailer);

•

Investor relations website of the brand/retailer (provided this is linked to the main website of the brand/retailer);

•

Third-party websites, but only when directly linked to the website of the brand/retailer;

•

An annual report, on sustainability or social responsibility, as published by the brand/retailer (provided this is directly linked to the main website of the brand/retailer and provided it has been published in or after January 2017);

•

Financial statements published by the brand/retailer (provided they are linked to the main website of the brand/retailer);

•

Documents available to the public and which can be freely and easily downloaded through the website(s) of the brand/retailer.

1. Platforms of the brands’ social networks, like LinkedIn, are not considered in this research, as only those who are registered on the platforms would have access to the information, and also because possible data contained there are not in formats appropriate for this survey.

Even though we have designed this methodology to be as objective and comparable as possible, is not always easy to fit in complex and nuanced issues within a simple and uniform methodology. For this reason, we want to stress that you use the Fashion Transparency Index findings to reflect on general trends in transparency rather than focus on whether brands scored one point higher or lower than another brand overall or in any particular area.

All averages in this report represent the mean. All scores have been rounded up or rounded down to the nearest whole percentage point..

The methodology of the Index was designed to provide comparative information over time, showing standards for disclosure of data,

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HOW THE SCORING WORKS and to allow the brands to see their own positions with regard to transparency, in comparison with other companies on the market.

What is beyond the scope of this research The Fashion Transparency Index does not provide a detailed analysis of the content, quality or accuracy of the policies, procedures, performance and progress in any specific area. In addition, the Index does not verify claims made by the brands and retailers. This is beyond what is possible in the timeframe and budget of the project.

For this reason, we encourage other stakeholders to access and evaluate the information as found. This is an important way to hold these large companies to account for their claims.

Limitations of the research Our team has researched and scored brands regardless of whether the brand representatives have or have not filled in the questionnaire. The brands that decided to answer the questionnaire had a greater possibility of receiving higher scores, simply because they took the opportunity to suggest to our researchers other information that had not yet been found.

There are other notable limits to this type of desk-based research. Firstly, human error is always a possibility, with 208 indicators, applied to 30 brands, this means there are over 6,000 individual datapoints. Secondly, some companies produce annual reports with between 200 and 400 pages, each in its specific format, which opens the way for a margin of error, both on collection and on comparison of data.

However, our research team has made every effort to make an analysis in the most complete, most accurate and fairest way possible. Finally, this survey captures only one moment in time, which means that brands and retainers could provide new information, or even withdraw information, at any moment.

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3 THE FINAL RESULTS To download the full spreadsheet of results, click HERE.

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A QUICK GUIDE TO THE RESULTS

0—10%

11—20%

21—30%

Total scores were out of 250 possible points, which we have converted into percentages. We chose to group brands into score ranges because we want readers to focus on emerging patterns and trends rather than individual scores.

31—40%

41—50%

51—60%

61—70%

71—80%

81—90%

91—100% TRANSPARENCY

Brands that get a score of between 0-5% are disclosing nothing at all or a very limited number of policies, that are often related to brands own practices for hiring workers, or local community engagement activities.

Brands scoring between 5% and 10% tend to publish some policies for both its employees and suppliers.

Brands scoring between 11-20% are likely to be publishing many policies, some procedures and some information about their supplier assessment and remediation processes.

These brands are unlikely to be publishing supplier lists and won’t be sharing much information, if anything, about our Spotlight Issues.

Brands scoring between 21-30% are likely to be publishing much more detailed information about their policies, procedures, social and environmental goals and supplier assessment and remediation processes.

These brands may be publishing a supplier list but with few details other than the facility name and address. The brands will not be sharing information about the outcomes of their supplier assessments or grievance channels. These brands will not widely be disclosing information on the Spotlight Issues but may touch upon a few.

Brands scoring between 31-40% are the brands that publish lists of suppliers as well as giving more detailed information about their policies, procedures, social and environmental targets, supplier assessment and remediation processes.

These brands are also more likely to address and be disclosing some of the spotlight issues, such as gender equality, procedures for payment of fair wages and/or solutions to deal with textile waste and recycling and carbon emissions. In the 2019 version of the Brazilian index, only one company scored within in this range.

Brands scoring between 41-50% are those that are most likely to be publishing more detailed supplier lists.

Many will be publishing processing facilities as well as manufacturers – in addition to detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes and some supplier assessment findings. These brands are also more likely to be addressing the spotlight issues such as the gender pay gap, capacity building for female supply chain workers, collective bargaining, textile waste and circular resources.

As well as disclosing their carbon and water footprint at company level.

Brands scoring between 51-60% are disclosing all of the information already described in the other ranges and will be publishing detailed supplier lists. The brands will be publishing polices covering the majority of human rights and environmental risks as well as a vase range of procedures and targets. They will be publishing some detailed information about the findings of their supplier assessments, usually through membership of the Bangladesh Accord or Better Work Programme. These brands will be addressing many of the spotlight issues such as the gender pay gap, capacity building for female supply chain workers, the use of sustainable materials, textile waste and circular resources and disclosing their carbon and water footprints at company level and in the supply chain.

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

In 2019, only one company scored in this category.

No brand scored over 70%, 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 be disclosing the number of workers in their supply chain covered by collective bargaining agreements.

The brands would be mapping their social and environmental impacts into their financial monitoring and disclosing much more data on their use of sustainable materials. We would be able to find details about the company’s gender pay gap, number of women in executive and management roles and how gender issues are being addressed in supply chains. The brands would be disclosing their carbon emissions, use of renewable energy and water footprint from their own operations right down to raw material level.

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THE FINAL RESULTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

AREZZO

6%

DECATHLON

20%

HERING

26%

TORRA

3%

MARISA

19%

PERNAMBUCANAS

24%

MELISSA

3%

ELLUS

14%

BROOKSFIELD

0%

ANIMALE

12%

CARMEN STEFFENS

0%

FARM

12%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

RIACHUELO

41 - 50% 38%

51 - 60%

61 - 70%

OSKLEN

49%

MALWEE

55%

HAVAIANAS

47%

RENNER

52%

ZARA

44%

C&A

* The brands are classified by numeric order within a scale with a maximum score of 250 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

71 - 80% 64%

81 - 90%

91 - 100%

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QUICK FINDINGS

No brand scored above 70%

13 brands (43%) scored 0

Average score is 41 (16%) out of 250 points

Only one brand higher than 60%

15

NO. OF BRANDS

10

5

0

1-10

11-20

21-30

31-40

41-50

51-60

61-70

71-80

81-90

91-100

FINAL SCORE (%)

TRANSPARENCY

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OVERALL ANALYSIS TOP FIVE HIGHEST SCORING BRANDS SINCE 2018

FASHION BRANDS AND RETAILERS THAT INCREASED THEIR LEVELS OF DISCLOSURE BETWEEN 2018 AND 2019:

+140%

Pernambucanas

+98%

Renner

+62%

Riachuelo

+55%

Hering

+46%

Osklen

+43%

Marisa

+28%

Havaianas

+22%

C&A

+11%

Zara

+8%

Malwee

The increase in the point scores occurred mainly because these brands and retailers started to publish their lists of suppliers for the first time, or in greater detail. In order to avoid distorted variations by near-zero data comparison, the calculation for this percentage growth rate only considered brands that scored at least 1% in 2018..

A company's performance progresses are presented in this report as growth rate rather than as percentage points. For example, if a company performed 20% in 2018 and 30% in 2019, we say that it has improved its performance by 50%, which corresponds to 10 percentage points increase over 20 in the previous year.

2018

53% 51% 40% 36% 34%

2019

C&A Malwee Zara Havaianas Osklen

64% 55% 52% 49% 47%

% OF BRANDS SCORING OVER 50%

C&A Malwee Renner Osklen Havaianas

% OF BRANDS SCORING 0%

40

% OF BRANDS AVERAGE SCORE

43

23 10

10

2018

2019

2018

2019

17

16

2018

2019

2019 *

* amongst 20 brands reviewed since 2018

Two brands scored decreased from 2018 to 2019.

This could have happened due to changes in their public disclosure, or to small alterations made to the Index methodologies in 2019. During our review of the methodology we removed some indicators for 2019, and made others more ambitious. As a result, some of the brands may not have scored

any points in 2019 for some specific indicators in which they did score points in 2018. This could have brought some minor changes in the final percentages for some brands, from one year to the next.

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VIEWPOINT:

BARRIERS FOR A TRANSPARENT SUPPLY CHAIN

LEONARDO MARQUES COORDINATOR OF BUSINESS TRANSPARENCY & SUSTAINABILITY NETWORK COPPEAD GRADUATE SCHOOL OF BUSINESS - UFRJ

The question “Who made my clothes?” comes up against different barriers, depending on the environment where it is made. Government, companies and consumers – to highlight three stakeholders – that have different views on this issue.

Within the Government sphere, a study carried out by our group in the first half of the year has shown what we know as inhospitable transparency. We have seen that mechanisms for transparency do exist, but they are often integrated within the website of a Government organisation, linked to the Labour Courts [which, in turn, have been undergoing changes recently].

Searches are made by key words, which often reveals judicial lawsuits which, in spite of offering detailed information about labour lawsuits currently under analysis, often come expressed in legal jargon, and are thus of difficult understanding by society at large. This means that there is some degree of

transparency, but access to information is often made more difficult. In addition, there are mechanisms for the companies to detach themselves from their legal responsibility for what happens in outsourced suppliers, where there is no proof of a direct relationship with the brand. Last but not least, our research study has shown that legislation in other regions, such as France and California, are streets ahead of Brazil, both in terms of what should be transparent, as also on the enforcement of penalties should the rules not be complied with.

In the sphere of companies, our study with 112 managers of Brazilian companies [in many different business sectors] in September of this year showed that the main risks in the management of the supply chain are changes to the legislation and also social and environmental responsibility.

In spite of this fact, the managers also replied that these risks are among those with the worst monitoring, while the monitoring of financial issues warrants greater attention. In addition, less than 10% consider themselves to be mature with regard to the adoption of technologies for collection and analysis of data for monitoring these risks, and less than 15% feel that their teams are fully qualified to deal with these new technologies and make decisions based on them.

Finally, turning to the sphere of consumers, in spite of a general feeling that there has been some progress, in the importance given to the issues of transparency and sustainability, our October survey, which was answered by 302 consumers of fashion items, showed that transparency still loses to price and quality, in the opinion of most consumers.

Indeed, on answering the question “How important are the following factors in your decision regarding purchases of fashion items”, the fact was that 50% mentioned price, 66% ease to buy and 84% quality, while only 34% considered transparency to be a criterion of high importance. We also observed that, among the 34% who showed greatest concern with transparency issues, the greatest impediment stopping purchases of transparent brands is the lack of information to make the right decision. In addition, we noticed that those people who were most concerned about transparency are not necessarily those who have higher incomes.

The real cost of an item of clothing should include all externalities, meaning all the social and environmental impact of the production process. Only this way can we have a fair comparison between the price tag of a brand (that pollutes or treats its workers unfairly) and the price of a brand that adopt processes with low social and environmental impact. Apart from absorbing externalities, brands also need to make their impact (or, better, the significant reduction of such impact) transparent.

However, as we have shown above, if the most essential stakeholders for this transformation are still barriers rather than facilitators, where should we start? Our research group believes in the role of the third sector and academic circles as facilitators of this process. Together, NGOs and Universities may have a key role to play for awareness building, for development of solutions, and finally pressure so that Government, companies, and consumers may move towards transparency. In this regard, the Fashion Transparency Index is a fundamental vector to bring about transformation, making the stage of maturity of the sector more tangible and promoting healthy competition between brands of the fashion industry.

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4 THE FINAL SCORES: SECTION-BY-SECTION

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42

AVERAGE SCORES ACROSS THE SECTIONS

28% 1.

POLICY & COMMITMENTS The two brands that scored the most points in this section were C&A and Zara, with 97% and 88% respectively, working out at 47.

5 and 43 points. Only 9 of the brands (30%) scored over 50%.

Between 2018 and 2019 there was a decline of 12% in the growth rate for this section, largely affected by the thirteen (43%) brands that got a score of zero. However, if we compare with the performance of the 20 brands reviewed in 2018, it is possible to see a growth rate of 18% in this section, as the average score for the brands reviewed in 2018 and again in 2019 was 38% for this section.

Comparing this section with the others, we see that the brands continue to disclose much more about their policies and commitments than on their processes, suppliers, compliance and remediation or the issues covered in the spotlight section such as gender empowerment, carbon emissions and waste management.

21% 2.

17% 3.

10% 4.

9% 5.

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

C&A was the brand that got the highest score in this section: 100% of all available points (12 points).

Renner came in second, with 67%, and the greater concentration of scoring brands (5 brands) were in the bracket between 41% and 50%. Sixteen brands scored no points at all in this section.

We have seen an increase in the number of brands that have published their suppliers list this year. In 2019, 10 (33%) brands published their lists of Tier 1 suppliers; 10 (33%) disclosed processing and finishing facilities, and 5 (17%) published some data on their suppliers of raw materials.

The brands that scored the highest in this category were Osklen, with 86%, and Havaianas, with 84%.

The greatest concentration of brands in this section scored between 0 to 10%, with nineteen brands (63%) providing very little or no information about their evaluation and remediation processes and findings. C&A and Zara got the highest scores here, with 45% and 42% respectively.

The rest of the brands (9 brands) got scores between 11% and 30%.

This is the section with the lowest average score this year, with a growth rate fall of 24% when compared with 2018. The brands that stood out in this area were C&A with 62%, and Zara with 51%.

Twenty-two of the brands scored below 10% or did not score any points at all, which means that they published little or no information about the Sustainable Development Goals (SDGs): SDG 5 – Gender Equality; SDG 8 – Decent Work and Economic Growth; SDG 12 – Sustainable Consumption and Production, and SDG 13 – Action against Global Climate Change.

This shows a lack of disclosure by most of the brands, regarding who is responsible for social and environmental issues within the company, and their contact information. In addition, very little is disclosed about who takes on these responsibilities at the board level and about how the teams (apart from the sustainability team) and the suppliers are encouraged to improve their performance in the social and the environmental areas.

Compared with the result for 2018, we see a significant fall of 33%, in the growth rate for this section, which is the lowest fall growth rate across the sections.

Between 2018 and 2019, this was the only section saw an increase in its growth rate, considering the total number of brands, showing a rise of 39% in the growth rate from one 2018 to 2019. If, however, we consider only the 20 brands analysed in 2018, we see that this rise is huge, with a leap of 108% in the growth rate for the brands, year on year.

Compared to the results of the global index, we see that this is the only section where Brazil has performed better than the global report findings.

Many brands share information about their policies for supplier compliance. However, they still share little information about the results of these efforts, and what they do when non-compliances are identified within their supply chains.

This section saw a fall of 10% for the growth rate since 2018.

However, if we consider only the 20 brands analysed in both editions, we can see an increase of 23% in the growth rate for this section.

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1. POLICY & COMMITMENTS APPROACH What are the brands’ and the retailers’ policies and procedures with regard to human rights and the environment, for their direct employees and suppliers?

We analysed the following issues: • Animal Welfare

• Health & Safety

• Annual Leave & Public Holidays

• Living Conditions/Dormitories

• Antibribery, Corruption & Presentation of False Information

• Maternity Rights/Parental Leave

• Biodiversity

• Notice Period, Dismissal & Disciplinary Actions

• Child Labour

• Overtime Pay

• Community Engagement

• Restricted Substances List

• Contracts & Terms of Employment

• Sub-contracting, Outsourcing & Homeworkers

• Discrimination • Diversity & Inclusion • Energy & Carbon Emissions • Equal Pay • Forced or Bonded Labour • Foreign & Migrant Labour • Freedom of Association, Right to Organise & Collective Bargaining • Harassment & Abuse

• Wages & Financial Benefits (e.g. bonuses, insurance, social security, pensions) • Waste & Recycling (Packaging & Paper) • Waste & Recycling (Product/Textiles) • Water Effluents & Treatment • Water Usage & Footprint • Working Hours & Rest Breaks

Social & environmental priorities and goals for the future In this section, we also analyse whether brands and retailers are disclosing their priorities with regard to human rights and environmental issues (sometimes found in the form of a materiality matrix), certain issues are more relevant or present greater risk to brands and their stakeholders than others do and we want to understand how they decide on these priorities and what these priorities are.

In addition, we also look into whether brands and retailers are publishing their targets, strategic plans or roadmaps to reduce social and environmental impacts throughout their supply chain. These targets were only counted if they were time-bound and measurable. Companies also scored extra points if they reported on annual progress towards achieving these goals.

Finally, we looked to see whether the brands and retailers have their annual sustainability reports or reports on corporate social responsibility (CSR) audited by an independent third party.

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1. POLICY & COMMITMENTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

TORRA

10%

FARM

29%

MELISSA

9%

ANIMALE

BROOKSFIELD

0%

CARMEN STEFFENS

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

41 - 50%

51 - 60%

61 - 70%

71 - 80%

81 - 90%

HERING

60%

RENNER

66%

MALWEE

80%

29%

DECATHLON

59%

OSKLEN

65%

RIACHUELO

76%

MARISA

24%

HAVAIANAS

52%

AREZZO

22%

ELLUS

31%

PERNAMBUCANAS

49%

* The brands are classified by numeric order within a scale with a maximum score of 49 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

ZARA

91 - 100% 88%

C&A

97%

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

In Supplier Code of Conduct Applying to brandâ&#x20AC;&#x2122;s own employees

16

Forced or Bonded Labour

16

Child Labour

12

Antibribery, Corruption & Presentation of False Information

15

12

Discrimination

10

Freedom of Association, Right to Organise & Collective Bargaining

16

12 12

Health & Safety Harassment & Abuse

11

Foreign & Migrant Labour

11

13 15

11

Overtime Pay

10

Sub-contracting, Outsourcing & Homeworkers Notice Period, Dismissal & Disciplinary Actions

9

Living Conditions/Dormitories

9

Working Hours & Rest Breaks

8

Water Effluents & Treatment

8

Equal Pay

6

9

8 8

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

7

Contracts & Terms of Employment Maternity Rights/Parental Leave

5

Waste & Recycling (Packaging & Paper)

5

Waste & Recycling (Product/Textiles)

5

Biodiversity

3

Energy & Carbon Emissions

3

Water Usage & Footprint

3

Community Engagement

10

8 9

6

Annual Leave & Public Holidays

11

7 13 9

5 9 8

2

15 4

Animal Welfare

12

Diversity & Inclusion Restricted Substances List

6 0

5

10

15

1. Graph ordered by most common policies that apply to suppliers. / 2. Policies on forced or bonded labour; child labour; foreign and migrant labour; overtime pay; sub-contracting, outsourcing and homeworkers; living conditions/dormitories; and Water Effluents & Treatment were assessed only when applicable to the suppliers. Policies on Animal Welfare; Diversity & Inclusion; and Restricted Substances List were assessed only at the level of policies targeted at the companyâ&#x20AC;&#x2122;s own employees.

20

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1. POLICY & COMMITMENTS FINDINGS S N A P S H OT O F F I N D I N G S

BIODIVERSITY

ENERGY AND CARBON EMISSIONS

CHILD LABOUR

17%

10%

30%

10%

53%

30%

disclose a policy for their direct employees

disclose a policy for their suppliers

disclose a policy for their direct employees

disclose a policy for their suppliers

disclose a policy for their suppliers

disclose how this policy is implemented in practice

DIVERSITY AND INCLUSION

WATER USAGE & FOOTPRINT

WASTE AND RECYCLING (PRODUCTS/TEXTILES)

40%

37%

30%

17%

27%

10%

disclose a policy for their direct employees

disclose how this policy is implemented in practice

disclose a policy for their direct employees

disclose a policy for their suppliers

disclose a policy for their direct employees

disclose a policy for their suppliers

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1. POLICY & COMMITMENTS FINDINGS S N A P S H OT O F F I N D I N G S

ANIMAL WELFARE

EQUAL PAY

FOREIGN AND MIGRANT LABOUR

35

37

OVERTIME PAY

35

37

27

20

20 15

15 10

2018

2019

% of brands that disclose how the policy is implemented in practice

2018

2019

% of brands that disclose a policy for their direct employees

2018

2019

% of brands that disclose a policy for their suppliers

2018

2019

% of brands that disclose a policy for their suppliers

2018

2019

% of brands that disclose a policy for their suppliers

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1. POLICY & COMMITMENTS IMPLICATIONS

Most brands and retailers publish more about their policies covering human rights than environmental issues With regard to the policies as applied to direct employees, most companies provide information about critical issues such as discrimination (53%), bribery and corruption (50%) and harassment and abuse (50%). On the other hand, the policies least published by companies for their employees include those concerning environmental issues such as biodiversity (17%) and animal welfare (13%).

Looking at policies aimed at the supply chain, we see that the issues most often covered are child labour (53%) and forced/ bonded labour (53%). Even though these are the issues most commonly addressed within policies for suppliers, 53% is still a very low figure, considering how serious these issues are. Once again, the least published policies are those concerning environmental issues, such as biodiversity (10%), energy and carbon emissions (10%) and use of water (10%).

It is also interesting to note that, even though 50% of the companies have policies in place for community engagement, only 7% include this issue in their policies for suppliers.

When looking at how policies are put into practise, we found that there was greater focus on environmental issues Interestingly, when we looked at how a brandâ&#x20AC;&#x2122;s policies are put into action, whether through detailed policy guidelines or through programmes and partnerships, we see that companies tend to publish more about implementation for environmental issues. Some brands mention how their policies aimed at consumption of energy and carbon emissions are put into practice (43%), followed by initiatives that seek reduction and management of waste and recycling of textile materials (40%).

On the other hand, information about how policies for animal welfare are put in place are still poorly disclosed, with only 3 companies (10%) publishing information on this.

We also found that 40% of brands disclose information about their community engagement efforts, which are usually philanthropic activities. When it comes to more critical issues, we see that less brands are disclosing how they are working to implement their policies: for example, in tackling slave labour (33%) and child labour (30%), working to eradicate bribery and corruption (27%), discrimination (20%), foreign and migrant labour (10%), and harassment and abuse (7%). Only one brand discloses information about how they work to implement their policy on worker housing or dormitories for workers within their supply chain.

How brands and retailers prioritise human rights and environmental issues During our research, our team sought information about how the companies identified and prioritised issues related to the environment and human rights implications of their supply chains and business models, often called a materiality processed. We found that only 27% of the brands disclose their materiality processes and the results.

Few brands publish targets and outcomes regarding human rights and environmental practises With regard to measurable commitments or targets, that are time-bound, we found that only 27% of companies publishing their plans aimed to improve issues concerning human rights, and 30% show their plans to reduce environmental impacts. These figures fall even more when we looked to see if they reported on the progress of such commitments or targets: only 10% of companies report annually on their progress against human rights targets, and 13% publish their progress on their environmental targets.

There has been some progress on brands disclosure of policies, but there is still a lot to be done Out of the 30 brands and retailers reviewed in 2019, the average scoring for Policy and Commitments was 28%, compared to 32% in 2018. This 12% fall in growth rate was caused by the higher number of brands included in this yearâ&#x20AC;&#x2122;s report that resulted in 43% of brands scoring zero.

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1. POLICY & COMMITMENTS IMPLICATIONS

If we just consider the 20 companies analysed in 2018 and again in 2019, we see that the average score in this section has shown an improved growth rate of 18% in brands disclosure for this section.

This suggests that the participation of companies in this Index may encourage the public disclosure of more information.

Even so, if we compare the 2019 figures for the Brazilian Index compared to those of the global Index, we can see a very significant difference in the results obtained, as the 200 brands participating in the international version obtained a global average of 48% for this section.

As was the case in 2018, the brands that achieved the highest scores in 2019 in this section were C&A and Zara, with 97% and 88%, which means that these companies publish a lot of information about their policies, procedures, and social and environmental targets. Malwee and Riachuelo came next, with scores of 80% and 76%.

1. Brazilian Institute of Environment and Renewable Natural Resources

30% of the brands scored over 50%, showing that there is still plenty of room for improvement on brands disclosure for this section. This is not only in detailed disclosure of the policies and commitments of companies for their direct employees and for their suppliers, but also in the disclosure of how such policies are put into practice. In addition, a lot more effort is needed so that the brands may present information about how environmental and social issues are prioritised in the business activities, and also about their targets for the improvement of aspects related to human rights and to environmental impacts in the long term.

Examples of good practice in transparency This year we have decided to highlight some examples of best practices for each section of the methodology.

C&A publishes its targets aimed at human rights and the environment for the period between 2015 and 2020, clearly describing, in full detail, what their main challenges are, what they have been doing to tackle such challenges, the progress that is being made, and case studies for each main goal that the company has established.

Zara, which is part of the Inditex group (which also owns the Bershka, Massimo Dutti, Pull & Bear, and Stradivarius brands), publishes a global strategy for water management, including guidelines and actions to promote the sustainable management of water resources. Among its company goals and objectives, are transparency and the disclosure of results among company stakeholders.

In its Code of Ethics for National Supplier, Malwee states that the companies included in the IBAMA’s1 list of embargoed areas, shall be excluded from Malwee Group suppliers list. In addition, the brand is also a signatory to the UN Global Pact and commits itself to follow the ten principles set by the Pact in its business operational routine.

A Malwee publica em seu Código de Ética de Fornecedor Nacional que as empresas que constarem na lista de áreas embargadas e autuações do IBAMA, serão excluídas da tabela de fornecedores do Grupo Malwee. Além disso, a marca é signatária do Pacto Global da ONU e se compromete a seguir os 10 princípios estabelecidos pelo pacto no dia a dia de suas operações.

These are just a few examples, and there are surely many others but we believe that the sharing of best practices may be useful tool for the industry as a whole may progress.

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2. GOVERNANCE APPROACH Who in the company is responsible for the social and environmental impacts?

Incentives for Executives, Employees and Suppliers for improving social and environmental performance

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

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

We looked for the department, name and position of the person who takes most responsibility for the performance in issues concerning human rights and environmental matters in the company.

These contact details are important because they show the presence of an open channel between the brand, its customers, and other interested parties.

In our research, we also look for the name of the board member, or board committee who is responsible for issues concerning human rights and the environment, and the way in which their supervision is implemented. These issues are normally dealt with by a committee of ethics or sustainability, reporting directly to the board.

Assigning responsibilities regarding the company’s social and environmental practices to the board shows just how seriously these issues are internally.

We seek the same information, observing the disclosure of salaries and other incentives received by the CEO and by executives, related to environmental and human rights management and impacts of the company.

Finally, we also looked to see how suppliers’ incentives are linked to improvements in human rights impacts and environmental management. The types of incentives we were looking for included brands commitments to make purchases in the long term, and increased orders.

" To live in harmony within a healthy and fair economy, we need visibility about what we are feeding. Visibility about the effects of our investments and our purchases in human relations, visibility of these effects upon rivers, oceans and biomas. When we are able to see what we are creating, we can then choose to change our direction, based on what we really want to nurture in the world."

ANDRÉ MELMAN TRÊ - INVESTIDORES COM CAUSA

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2. GOVERNANCE 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

HAVAIANAS

33%

PERNAMBUCANAS

50%

ANIMALE

58%

0%

HERING

33%

RIACHUELO

50%

MALWEE

58%

BROOKSFIELD

0%

MARISA

33%

ZARA

50%

CARMEN STEFFENS

0%

ELLUS

42%

CIA. MARÍTIMA

0%

FARM

42%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MELISSA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

TORRA

0%

DECATHLON

8%

AREZZO

OSKLEN

17%

RENNER

* The brands are classified by numeric order within a scale with a maximum score of 12 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

71 - 80% 67%

81 - 90%

91 - 100% C&A

100%

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2. GOVERNANCE FINDINGS BOARD LEVEL ACCOUNTABILITY

CAN WE GET IN TOUCH WITH THE BRANDS EASILY?

43%

27%

20%

17%

disclose information for direct contact with the sustainability/CSR team

give the name and direct contact information of the person who has most responsibility for issues concerning human rights and environmental impact

disclose the name of the board member of board committee responsible for human rights and environmental issues

describe how the board level accountability is implemented in practice

INCENTIVES FOR IMPROVED PERFORMANCE

17%

7%

17%

say how incentives (pay and bonuses) for workers are tied to improved management of human rights and environmental concerns

show how bonuses and incentive packages for executives are related to improved management of human rights and environmental issues (for example: annual bonuses and evaluation of performance)

show how incentive packages for suppliers are linked to improvement in the management of better labour practices and environmental issues (for example: long-term order commitments, longer contracts, increase in orders)

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2. GOVERNANCE IMPLICATIONS

The 17th Annual Global CEO Survey by the PwC mentions that 75% of the CEOs interviewed agree with the statement that satisfying societal needs (beyond those of investors, customers and employees) and protecting the interests of future generations is important. But what are major brands willing to tell us about the way their company embeds social and environmental performance into the business from Board level to their own employees and in the supply chain?

Board accountability for human rights and environmental impacts Only 20% of brands provide information about the board member or about the board committee responsible for issues related to human rights and the environment, while 17% publish a description of how this responsibility is implemented by the board.

Incentives for improvements in the areas of human rights and environmental impacts We looked to see how companies are encouraging their direct employees, directors and executives, and their suppliers to improve human rights and environmental impacts.

We found that only 17% of brands disclose how their own employees (sourcing, designers, buyers, merchandisers, etc) are incentivised to achieve human rights and environmental improvements. Only 7% of the brands reported linking CEO and executive level pay and incentives to human rights impacts and environmental management.

These figures make us question just how seriously the brands are addressing these problems.

For the suppliers, we found that only 17% of the brands give descriptions of how supplier incentives are linked to improvements in the management of best labour and environment practices.

Allowing customers and other interested parties to get in touch A simple act of transparency that the brands could take up would be that of providing an easy way to get in touch directly with the corporate social responsibility department or the sustainability team. This allows an open line of communication between the brand, its customers, and other interested parties who may wish to ask a question or address some kind of concern.

For this reason, we look into whether the brands are sharing an email address or direct telephone number to get in touch with the department/team, we found that 43% of the brands did this. We also found that 27% of the companies disclose the names and direct contact information for the person with lead responsibility for issues of human rights and the environmental impact of their operations.

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2. GOVERNANCE IMPLICATIONS The brands with the greatest scores in the governance section this year were C&A, with 100%, and Renner with 67%. The average score for this section was 21%, compared with 32% in 2018, which means a significant fall of 33% in growth rate, since last year. With regard to other sections of the Index, we see that this was the section to have shown the greatest fall compared to last year. In addition, 16 brands scored zero points in this section in 2019, which pushed the average score for this section down.

We must also take into consideration that we have changed the wording of some of our governance indicators in 2019. We made these changes to make the criteria more ambitious and to encourage brands to provide information that enables them to be held accountable.

Examples of good practices in transparency C&A publishes the direct e-mail addresses of their heads of department, as also the names and LinkedIn profiles of the whole global leadership team and managers of their regional teams.

Renner incentivises the product teams to lessen their impact by linking remuneration to targets throughout the year, this is to encourage and increase the percentage of products made with better raw materials, and processes, involving less impact.

Their goal is that these products make up 80% of their inventory by 2021. In addition, Renner has initiatives to drive better practises from their suppliers, such as a financing programmes by the National Bank of Economic and Social Development (BNDES), to support suppliers in programmes to improve social and environmental management and efficiency.

" ABIT supports initiatives that

encourage greater transparency on the part of companies. The development of this issue has required that the private sector share information that is more and more structured and organised; information that gives society a picture of how business activities operate, through data from the supply chain and environmental policies, for example. The whole textile and clothing supply chain is well aware that one needs to change the method of production. Society is getting more and more informed and has a better understanding of the fact that the consumer has the power of changing production processes within companies, redirecting to a more sustainable style of production.

This work has grown, and this shall continue. There is no way back, which is good for all."

FERNANDO PIMENTEL PRESIDENT OF ABIT BRAZILIAN TEXTILE AND GARMENT INDUSTRY ASSOCIATION

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3. TRACEABILITY APPROACH Do the brands publish their lists of suppliers and how detailed is this information?

This section focused on whether brands are publishing lists of their suppliers, and what level of detail brands provide.

We have tried to find out whether the brands share information such as the following: • A ddresses of the supplier’s facility/ facilities; • Types of products made / services rendered at these premises; • The name of the parent company; • The approximate number of workers; • Gender breakdown of workforce; • % of workforce by ethnicity; • Percentage of migrant workers or workers with temporary contracts; • Trade union representation or workers’ committee on the facility; • If the suppliers list has been updated within the last 6 months.

Disclosing factories, processing facilities and raw material suppliers We looked for suppliers at three levels.

We first looked to see if brands are disclosing the factories where their clothes and accessories are made – e.g. the facilities with which brands have direct relationships with and typically do the cutting, sewing and final finishing of the products.

Second, we looked to see if brands are disclosing processing facilities further down the supply chain- e.g. from ginning and spinning, through to subcontracting, wet processing, laundries, finishing and dye-houses etc.

The brands also score points: when their supplier lists are made available in a computer searchable format such as Excel or CSV, if they include over 95% of their suppliers, and if their supplier lists have been updated over the last 6 or 12 months, in the case of suppliers of raw materials. We also looked to see if the brands are tracing at least one raw material, such as cotton, leather or wool.

[BELOW] PHOTOGRAPHY @AMANOYARNS amanoyarns.com

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3. TRACEABILITY 0 - 10%

11 - 20%

21 - 30%

HERING

9%

PERNAMBUCANAS

19%

DECATHLON

1%

ELLUS

16%

ANIMALE

0%

ZARA

16%

AREZZO

0%

BROOKSFIELD

0%

CARMEN STEFFENS

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

FARM

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MELISSA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

TORRA

0%

MARISA

31 - 40% 26%

RIACHUELO

41 - 50% 40%

51 - 60% C&A

61 - 70% 56%

* The brands are classified by numeric order within a scale with a maximum score of 85 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

71 - 80%

81 - 90%

91 - 100%

RENNER

76%

OSKLEN

86%

MALWEE

71%

HAVAIANAS

84%

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3. TRACEABILITY FINDINGS WHO IS PUBLISHING A LIST OF TIER 1 SUPPLIERS?

33%

20%

10%

7%

7%

7%

27%

publish a list of tier 1 suppliers

include the approximate number of workers in each location, in the supplier list

include the gender breakdown at each facility

include ethnicity breakdown in each sit

have included whether the factory has a trade union or worker committee

publish at least 95% of their suppliers on the list

have updated their list within the last 6 months

WHO IS PUBLISHING A LIST OF PROCESSING FACILITIES?

WHO IS PUBLISHING A LIST OF RAW MATERIALS SUPPLIERS?

33%

10%

7%

13%

17%

10%

17%

publish a list of processing and finishing units beyond the first-tie

include the gender breakdown at each facility

include ethnicity breakdown in each site

publish what percentage of processing facilities is published

publish a list of suppliers of raw materials

include the approximate number of workers in each location, on the list

publish whether or not they are tracing one or more specific raw materials

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3. TRACEABILITY IMPLICATIONS The publication of supplier lists is becoming a new practice

More brands are disclosing their suppliers of raw materials

Companies have shown significant progress with regard to publishing supplier lists between 2018 to 2019.

We saw a 39% growth rate increase for this section from 2018 to 2019.

In 2018, only five of 20 (25%) brands were publishing lists of first-tier suppliers, in 2019, ten out of 30 brands (33%) are disclosing their suppliers at this level.

We found that 17% of brands, or 5 out of the 30 brands, are publishing lists that include the companiesâ&#x20AC;&#x2122; suppliers of raw materials.

Comparing this analysis to 2018, this result also shows that there has been an improvement, considering that last year only three companies out of 20 brands (15%) disclosed details about their raw material suppliers.

There was also a significant increase in the disclosure of lists of suppliers further down the supply chain, where the processes such as ginning, weaving and dying happen.

While in 2018 only five out of 20 brands (25%) were publicising these units, in 2019 this figure soared to 33%, which means ten out of the 30 brands.

With regard to the global Index in 2019, it showed 10 brands out of 200 (5%) disclosure some suppliers of raw materials, this suggests brands operating in the Brazilian market are showing good progress towards greater transparency of their suppliers, right down to the sourcing of their raw materials.

Brands included in the Index tend to publish more information year on year

of their direct suppliers of raw materials and of processing and finishing units.

When looking at the 20 brands that were reviewed in both 2018 and 2019, we found that the growth rate for Section 3 - Traceability was the highest across all the sections at 108%.

The scope of the Traceability section

Good progress has been made, but many companies still donâ&#x20AC;&#x2122;t publish their supplier lists Even though we observe that progress is being made in the disclosure of brands supply chains, the fact of the matter is that many companies still fail to disclose any kind of information about who their suppliers are. Out of the 30 brands reviewed, eighteen (60%) scored zero points in this section.

The brands that earned the highest scores were Osklen (86%) and Havaianas (84%), both part of the Alpargatas Group. These two brands supplied some data about some

The methodology used in this section was created to be aligned with the requirements of the Transparency Pledge, a coalition of labour and human rights organisations, build to promote transparency across the supply chains of the fashion industry and how it supports better practises.

Some of the organisations behind the Transparency Pledge are: IndustriALL Global Union, International Trade Union Confederation, UNI Global Union, Human Rights Watch, Clean Clothes Campaign, Maquila Solidarity Network, Worker Rights Consortium, International Corporate Accountability Roundtable, and International Labour Rights Forum.

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3. TRACEABILITY IMPLICATIONS In our methodology, we have also included additional indicators, extending beyond those proposed by the Transparency Pledge, including gender breakdown, the percentage of migrant workers at each facility, specifically in the Brazilian questionnaire, we have also included a question on the ethnicity breakdown within facilities as this is an important issues for Brazilian brands to monitor.

Only 2 brands (7%) had lists that included whether the factories at tier-one had any link with a trade union or any kind of independent worker committee; 3 brands (10%) disclosed the gender breakdown; 2 brands (7%) published the ethnicity breakdown, and only one brand disclosed the percentage of migrant workers in each facility.

We would like to highlight some changes have been made to the 2019 methodology and questionnaire, as this could have had a minor impact on the scores for this section compared to 2018.

For example, in 2018 the supplier lists were accepted in any format (PDF, Word, Excel, CSV etc.). This year we gave points only to the brands publishing their supplier lists in a computer readable file, Excel or CSV. Why? Because this enables their lists to be easily utilised by open source tools such as the Open Apparel Registry or the Clean Clothes Campaign â&#x20AC;&#x201C; Wikirate factory search widget. Platforms like these are very useful for other stakeholders to make efficient use of brands supplier lists but they require data that can be easily and quickly compared and used.

The analysis this year showed that five brands (17%) made their list of tier-one suppliers available in Excel or CSV format. Only four brands (13%) publish spreadsheets in this format with data about their tiertwo processing units, as with their suppliers of raw materials.

We looked to see if brands provided data about their suppliers because this type of transparency and information can help brands engage and collaborate with trade unions and other civil society organisations on labour and human rights issues.

The disclosure of supplier lists may facilitate direct conversation between local organisations and brands when problems involving workersâ&#x20AC;&#x2122; rights arise that a standard audit may not have identified.

Therefore, transparency may really

help to strengthen the efforts of due diligence of a company, and help to reveal issues such as unauthorised subcontracting operations.

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3. TRACEABILITY IMPLICATIONS Examples of good practice in transparency Havaianas disclosing a supplierâ&#x20AC;&#x2122;s list with contact details, addresses, the number of employees, gender and ethnicity breakdown, and presence of trade unions, it also has some extra information regarding a supplier rating for each unit. Apart from all this, Havaianas also includes, as part of its list, information as to whether there are collective labour agreements in place. C&A also highlights good practise by updating its suppliers list every two months.

60

" When we consider the impact generated by an extreme use of irrigation methods, pesticides and fertilisers, and the degradation of the soil, we sense that we shall not manage to produce cotton and rubber for long. In the light of this fact, new technologies such as the Geographic Information System (GIS) bring greater transparency in the way these raw materials are produced, helping to establish forest ecosystems that are resilient to climate change.

The systems based on Regenerative Agroforests, in turn, produce fibres that regenerate the soil, increasing biodiversity, mitigating the climate change and bringing greater resilience of water, as well as being more economically feasible for the farmer and for the fashion brand."

FELIPE BOCAIUVA VILLELA FOUNDER OF reNATURE

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4. KNOW, SHOW & FIX APPROACH How are brands and retailers assessing the implementation of their policies? Do they share the results of these assessments?

We give additional points to brands that disclose the following: • How suppliers are assessed against the brand’s policies; • The decision-making process for taking on new suppliers; • How often assessments are carried out (for example: every 12 months); • If assessments are fully announced, partly announced, or not announced at all; • If the brands assess suppliers beyond the firsttier of manufacturing; • The number of workers interviewed during the assessment process.

Know We analyse how the brands assess their suppliers to ensure that they are complying with the brand’s policies and ethical standards. For this reason, we seek descriptions of the brands’ supplier assessment processes (normally through audits carried out in factory units).

Show We also seek to identify whether the brands disclose the results of their supplier assessments, both through a summary of the issues found, and at a more detailed level, reporting on the issues found in each factory, on an individual basis.

Fix Finally, we analyse what the brands disclose about their efforts to fix problems in in the factories found through the assessment process. In addition, we seek information about the exit strategy when brands want to cease working with a supplier, such as when they continue to be non-compliant with the brand’s ethical standards, in order to ensure that workers are not harmed as a result. We also look to see if brands disclose information about confidential complaint channels for the direct employees and workers in the supply chain; also, if they disclose the results of their supplier remediation processes, normally known as Corrective Action Plans (CAPs).

61

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4. KNOW, SHOW & FIX 0 - 10% ANIMALE

11 - 20% 10%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

PERNAMBUCANAS

18%

MALWEE

30%

C&A

45%

ZARA

42%

FARM

9%

RENNER

18%

HERING

25%

AREZZO

6%

DECATHLON

16%

OSKLEN

22%

TORRA

3%

RIACHUELO

16%

HAVAIANAS

21%

BROOKSFIELD

0%

MARISA

15%

CARMEN STEFFENS

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

ELLUS

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MELISSA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

61 - 70%

* The brands are classified by numeric order within a scale with a maximum score of 67 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

71 - 80%

81 - 90%

91 - 100%

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4. KNOW, SHOW & FIX FINDINGS SHOW: DISCLOSING OUTCOMES

KNOW: ASSESSING SUPPLIERS

47%

37%

37%

13%

20%

20%

publish a description of the process used for assessing conditions in supplier facilities

publish how often the suppliers are assessed

publish if supplier assessments go beyond the first-tier

publish the number of workers interviewed during the supplier assessment process

publish a summary of supplier assessment findings at the first-tier

publish the summary of supplier assessment findings going beyond the first-tier

FIX: ADDRESSING PROBLEMS

3%

0%

43%

7%

43%

13%

only one brand publishes the summary of supplier assessment findings, considering raw materials

no brand of supplier assessment findings at the first-tier covering a range of different issues for individually name facilities

publish the process of remediation, whenever non-conformities are found in a supplier facility

only two brands publish the number of first-tier suppliers with remediation plans in place

publish a description of a confidential complaints channel for workers within the supply chain

publish data on the number of complaints or violations filed by workers in the supply chain

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4. KNOW, SHOW & FIX IMPLICATIONS

Know: how the brands are assessing their suppliers We see that 47% of brands disclose the description of the supplier assessment process, normally carried out by specialised audit companies. There is a slight improvement in this result when compared to 2018, when the result was 45%. We also see that the Brazilian average is very low when compared to the global Index for 2019, which showed a score of 88% for this indicator.

In addition, 37% of the brands disclose their criteria for taking over new suppliers before production gets under way, to make sure that these premises comply with brand’s ethical standards as required. We also see that 37% of brands disclose how often these evaluations take place. They typically occur at least once a year.

Some changes have been made in the wording of the questions in this section, to encourage more detailed disclosure. For example, in 2018, 45% of the twenty brands analysed disclosed whether supplier assessments were announced, partly announced, or not announced at all. In 2019, we looked to see if brands disclosed the actual number or percentage of facility assessments conducted in each way.

In this regard, we see that only 30% publish the percentages of supplier assessments that were announced, partly announced, or not announced at all.

Last but not least, we identified that 37% of the brands disclose whether the scope of supplier assessments goes beyond the first-tier, including outsourced personnel, sewing and cutting units, processing and

finishing units, suppliers of fabric and other raw materials, and so on.

Show: little information has been published about the results of supplier assessments Only 20% of brands publish a summary of supplier assessment findings at the first-tier and beyond, while only one brand (3%) discloses such information about their raw material suppliers. Essentially, there has been no improvement in this scenario compared to the Index for 2018, when 20% of the brands published a summary of supplier assessment findings at the first-tier, 15% beyond the firsttier, and 5% at raw material level.

We noticed that only one brand (3%) discloses supplier assessment findings at the first-tier for a specific topic (e.g building and fire safety), two brands

(7%) publish this information beyond the first-tier, and no brand publishes such data at raw material level. The two brands that publish information beyond the first-tier (C&A and Zara) are members of the Bangladesh Accord on Fire and Building Safety and include a link to this initiative on their respective websites. These brands also publish their supplier lists, which makes it possible to crosscheck data with the date on inspection reports made available by the Bangladesh Accord and observe the performance of specific units.

However, in September 2019, representatives of the Bangladesh Accord, and of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)1, met in Dhaka to discuss the transition of the Accord and its functions for the establishment of the RMG Sustainability Committee (RSC) by the end of May 2020. We now

1. In September 2019, representatives of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Accord on Fire and Building Safety Management Committee met in Dhaka to discuss the establishment of the “RMG Sustainability Committee (RSC)”. The Parties discussed the transition of the Agreement and its functions (concerning inspections, remediation, training, and mechanisms for complaints about safety) for RSC up to May 2020. RSC is a national initiative, which brings together industry, brands, and trade unions, to make sure of a sustainable solution, based on a unified standard of compliance, to build upon the significant conquests in the area of safety in the workplace, in Bangladesh. The RSC shall also include industrial relations, development of skills, and environmental standards.

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4. KNOW, SHOW & FIX IMPLICATIONS

wait to know what kind of changes that would bring in relation to the way in which such information regarding these brands is published.

With regard to the complete audit reports that identify specific units, no brand shares any information, as is also the case in the global Index.

Zara is the only brand that discloses supplier assessment findings, identifying cases occurring in specific named suppliers, beyond the first-tier, regarding issues such as health and safety, discrimination, salaries and wages, and working hours, through the Better Work portal, of the International Labour Organisation (ILO). The other brands do not give such information, not even for first-tier suppliers or suppliers of raw materials. The point was accepted as the brand is a member of the ILO programme and includes a link on its website, to this initiative and publishes its supplier list, enabling the crosschecking of compliance data for specific factory units on the Better Work portal.

Fix: less than half the brands publish steps taken to remediate non-compliances in the supply chain We looked to see if brands disclose the remediation processes that deal with non-compliances found during supplier assessments. We also reviewed whether brands support their suppliers to make the necessary improvements. This is usually in the form of Corrective Action Plans (CAPs) that might include stop-work notices, warning letters, supplementary training, policy revisions and further inspections, and so on. In this case, 43% of the brands publish a description of their process for the remediation of non-compliances. This, while only two brands (7%) share the percentage or the number of units with remediation

processes in place and the status of remediation for first-tier suppliers and for suppliers beyond the first-tier. None of the brands disclose this information for suppliers of raw materials.

With regard to confidential complaints channels that allow problems to be identified and addressed, 50% of the brands publish a description of this complaints channel (for example: online form, e-mail communication, confidential telephone hotline) for their direct employees and 43% for workers in the supply chain. This is a decline compared to last year, when 60% of the brands published a description of the confidential complaints channel for workers in the supply chain.

Only 13% of the brands publish data about the number of complaints or tip-offs concerning violations filed by their direct employees and workers in the supply chain and if complaints are still being analysed or have already been solved.

The average score in this section has not changed much between 2018 (11%) and 2019 (10%). However, if we restrict our analysis to the 20 brands that have been reviewed in both editions of the Index, we see a positive growth rate of 23%, which results in 14% for the general mean for these brands.

However, in this section, not even the highest scoring brands â&#x20AC;&#x201C; C&A (45%) and Zara (42%) â&#x20AC;&#x201C; reached 50% of the possible points. This shows that there is a need for greater effort on the part of the industry, with regard what is being disclosed about brands efforts to assess, monitor and improve working conditions and the safety of the workers in the supply chain.

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4. KNOW, SHOW & FIX IMPLICATIONS

Examples of good practice in transparency C&A provides some interesting and quite detailed information about the results of the assessments and performance of their global suppliers, according to a classification programme that uses a scale from A to E. Riachuelo showed a detailed Table of Penalties with pre-set time frames, dealing with items presenting greater hazards, and in cases of repeated occurrences. This table of penalties is the same table as used by the Brazilian Association of Textile Retail (Associação Brasileira do Varejo Têxtil - ABVTEX).

" ABVTEX supports initiatives that help to impart greater transparency upon the best practices carried out by retail brands active in the fashion industry. Our plan to promote sustainable fashion, making it more accessible based on the development of a fair production chain that is responsible, innovative, competitive and transparent.

This also has synergy with the Index, that analysis the sharing of information of sustainability of different brands within their own channels of communication. In this way, the Index encourages brands to take qualified information to society in general."

EDMUNDO LIMA EXECUTIVE DIRETOR OF DA ABVTEX BRAZILIAN TEXTILE RETAIL ASSOCIATION

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5. SPOTLIGHT ISSUES APPROACH

As each year goes by, the Fashion Transparency Index explores some of the key issues in deeper detail through the spotlight issues. In 2019, the Brazilian team decided to focus on the four of the Sustainable Development Goals (SDGs) of the 2030 Agenda of the United Nations (UN). Our global team selected SDGs 5, 8, 12 and 13, as they are particularly relevant and should be urgently addressed by the global fashion industry, so that brands and retailers support the achievements of the SDG goals.

SDG 5: Gender Equality We wanted to see how major brands are dealing with the issue of gender-related discrimination and violence within their supply chains, and what they are doing to support gender equality, salary equivalence, and womenâ&#x20AC;&#x2122;s empowerment within the company and in their supply chain.

SDG 8: Decent Work and Economic Growth As mentioned before, in addition to the core issues of racial equality and discrimination between nationalities, with regard to this SDG, we seek information about how the brands and retailers make sure that their workers, within their supply chains, have the right to unionise and to take part in collective negotiations to bargain for their rights. We also look at how their purchasing practices are enabling good working conditions and the payment of a living wage to workers throughout the supply chain.

SDG 12: Responsible Consumption and Production We looked at what brands have been doing to increase their use of sustainable materials and reduce the use of virgin plastics used to produce synthetic fibres such as polyester and acrylic. We also seek information about what major brands are doing to tackle the waste of textile materials, and if they are investing in initiatives that are working towards a circular business model.

SDG 13: Climate Action We also looked to see what brands published about their carbon emissions, the use of renewable energy, and their water footprints, both at their headquarters and those within their supply chains. Finally, we reviewed whether brands are linking the environmental impact of their operations to their financial reviews and businesses bottom line.

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5. SPOTLIGHT ISSUES 0 - 10%

11 - 20%

21 - 30%

ANIMALE

8%

DECATHLON

19%

HAVAIANAS

5%

RIACHUELO

19%

MELISSA

5%

HERING

16%

PERNAMBUCANAS

5%

FARM

11%

OSKLEN

3%

ELLUS

3%

MARISA

0%

AREZZO

0%

BROOKSFIELD

0%

CARMEN STEFFENS

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DUMOND

0%

JOHN JOHN

0%

LE LIS BLANC

0%

LEADER

0%

LOJAS AVENIDA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

TORRA

0%

MALWEE

31 - 40% 30%

RENNER

41 - 50% 35%

51 - 60% ZARA

61 - 70% 51%

C&A

* The brands are classified by numeric order within a scale with a maximum score of 37 points, and presented here as rounded percentages. When two or more brands have the same percentage score, they are then listed alphabetically.

71 - 80% 62%

81 - 90%

91 - 100%

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5. SPOTLIGHT ISSUES FINDINGS SDG 5: GENDER EQUALITY

SDG 8: DECENT WORK AND ECONOMIC GROWTH UNIONISATION AND COLLECTIVE BARGAINING

40%

publish the annual percentage of executive roles and management positions occupied up by men and women, or the percentage of women in these roles

RACIAL EQUALITY AND DISCRIMINATION BETWEEN NATIONALITIES

10%

17%

3%

7%

7%

publish the annual gender pay gap within the company

publish the number (or percentage) of workers in the supply chain who are covered by collective bargaining agreements

publish the number (or percentage) of supplier facilities that have independent democratically elected trade unions

publish information about the breakdown of their own employees by nationality or ethnicity, in relation to their seniority

publish information about their efforts concerning the integration of foreign and/or migrant workers, within their supply chain

SDG 12: RESPONSIBLE CONSUMPTION AND PRODUCTION

SDG 13: CLIMATE ACTION

33%

30%

17%

10%

17%

10%

publish a sustainable materials strategy or roadmap

publish a strategy to reduce pre-consumer waste

publish their annual carbon footprint or GHG emissions from their own operations

publish the annual carbon footprint of GHG emissions within their supply chain

publish the annual water footprint of the companies owned facilities

Publish the annual water footprint within their supply chain

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5. SPOTLIGHT ISSUES IMPLICATIONS ODS 5: Gender Equality This SDG seeks to eliminate all types of discrimination and violence against women and girls around the world by 2030. The fashion industry, at different stages, from the growing of cotton, sewing, design, marketing and retail, employs a significant number of women. Between 70% and 80% of labour employed in the global fashion industry is female, and in Brazil women account for 75% of the workforce1.

A report published by CARE International highlighted that sexual harassment is a regular occurrence in the fashion industry’s supply chains, in which about one in every three female garment workers report that they have faced sexual harassment in the workplace over a 12-month period.

In 2017 Fashion Revolution worked on the Garment Worker Diaries project, in collaboration with Microfinance Opportunities, found that female garment workers in Bangladesh, Cambodia and India are often exposed to verbal abuse from their supervisors, and depend on the income of their husbands or other family members to meet their financial obligations.

1. https://www.abit.org.br/cont/perfil-do-setor

Yet major brands don’t seem to be doing much to address the issue of gender inequality and to empower women along the value chain of the fashion industry. The brands who received the highest score in the section Spotlight Issues were C&A (62%) and Zara (51%). The other brands scored less than 50%, and sixteen of the 30 brands reviewed scored zero points in the Spotlight Issues section.

Only 10% of brands support empowerment of women along the supply chain We observed that only three brands (10%) disclose that they are involved in capacity building projects along the supply chain focused on gender equality or empowerment of women such as: building of awareness of discrimination issues and gender violence, financial inclusion and literacy training, and opportunities and skills training to support women in progressing to supervisory or management roles.

Comparing this to the 2018 findings, this represents a slight fall, considering that, last year, 15% of brands said they were involved in initiatives like this. With

regard to the global Index, this number also fell between 2018-2019 but found that 37.5% of the 200 brands reviewed in 2019 published information about their involvement in such projects.

No brand publishes data on the prevalence of gender-related violations within their supply chain. In the global Index, only three brands (1.5%) published such information.

Very little is known about how brands are addressing gender-based labour violations in their supply chain

This kind of disclosure is useful for NGOs, trade unions and other stakeholders that work to end gender equality and improve the lives of women global, as they can then hold brands to account In. Addition, such disclosure could also help to track brands performance and progress on these issues.

C&A is the only brand to publish guidance on best practices guidelines for their suppliers concerning issues faced by female workers along the supply chains. This guidance could be aimed at issues such as sexual harassment and other forms of genderrelated violence; treatment and dismissal of pregnant workers; maternity leave; gender based salary differences for like for like work; bathroom breaks; women in supervisory and management roles; participation of women in trade union organisations; and so on. Compared with the analysis conducted in 2018, this figure has stayed the same.

However, the global Index found that 14% of brands reviewed published some best practise guidance for supplier in support of gender equality.

In Section 1 of the questionnaire – Policies and Commitments – we identified that eight of the brands (27%) have an equal pay policy in place, while six (20%) have a maternity or parental leave policy for their suppliers. This shows that the brands have a greater focus on the disclosure of their policies than on the disclosure of their actions or the results of their efforts to support gender equality within their supply chains.

There is significant progress in the disclosure of policies for equal pay, and the gender pay gap between men and women within the company

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5. SPOTLIGHT ISSUES IMPLICATIONS With regard to policies and initiatives for direct employees of the companies, it is possible to note greater publicity and progress from one year to the next. We also found that 40% of brands publish annual proportions of men and women in executive and management positions, or the percentage of women in these positions, compared to 35% in 2018.

When looking at policies that cover equal pay in Section 1, we found that 20% of brands disclose an equal pay policy for their direct employees, compared to 15% in 2018. Even though progress has indeed been made, Brazilian brands still lag behind if we compare these figures against the global Index results of 2019, which found that 63% of brands publish a policy on equal pay.

We also see that 10% of brands published the company’s annual gender pay gaps, compared with 5% in 2018. The global Index reported that 33.5% of the brands published this in 2019.

However, we noticed a considerable drop in brands publishing the company’s quantitative goals with

regards to the empowerment of women, with a result of 7% in 2019, compared with 30% in 2018. In the meantime, the global Index showed a rise from 25% to 29.5% from one year to the next, using this very same indicator.

Examples of good practice in transparency Renner (page 58 of the hyperlink), in partnership with the Instituto Lojas Renner and UN Women, supports initiatives taken by production groups, aimed at gender equality and income generation within the textile industry value chain, including “Empowering Female Refugees”, that offers professional training to female refugees; “Female Fashion Entrepreneurs”, that promotes professional and management training to low income women; and “Women in the Organic Cotton Supply Chain”, that offers professional training to quilombola2 women working as rural producers within three communities in Minas Gerais, for improvement to production processes for the cultivation of organic cotton, with participative certification.

SDG 8: Decent Work and Economic Growth We concentrate mainly on goal 8.5 of the Sustainable Development Goals which aims to achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value, by 2030.

Freedom of association, unionisation and collective bargaining Freedom of association, the right to unionise and collective bargaining are human rights that are essential for achieving SDG 8. This is why we looked at what leading brands disclose about their efforts to support and monitor these issues.

In terms of policies relating to these issues (reviewed in Section 1 of the questionnaire) we have seen a fall between 2018 and 2019. While in 2018 half the companies published a policy aimed at freedom of association, the right to organisation and collective bargaining within their Codes of Conduct for Suppliers, in 2019 this figure fell to 40%. At the same time, the

same policy aimed at direct employees of companies fell from 35% to 33% within the space of one year.

When we looked at these issues in more detail in the Spotlight Issues, we see that only one brand (3%) discloses the number of the percentage of supplier facilities that have independent trade unions, democratically elected – which is also a fall when compared to 2018, when 10% of the brands published this.

However, 17% of the brands disclose either the number or the percentage of workers who are covered by collective bargaining agreements within their supply chains – a rise of 2 percentage points when compared to 2018.

Only two brands (7%) disclosed whether their first-tier and second-tier supplier facilities are linked to a trade union or other type of independent workers’ committee.

Many of the brands included in the Brazil Index also produce in Brazil, where freedom of association, unionisation, and collective bargaining agreements are mandatory by Law. However, it is not always possible to gauge what percentage of their production is made in other countries,

2. A quilombola is an Afro-Brazilian resident of quilombo settlements first established by escaped slaves in Brazil. They are the descendants of Afro-Brazilian slaves who escaped from slave plantations that existed in Brazil until abolition in 1888.

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5. SPOTLIGHT ISSUES IMPLICATIONS like countries in Asia, for example, where labour regulations tend to be more lax. This means that just complying with local legislation is not enough to make sure that human rights and decent labour conditions are actually being upheld within their entire supply chain and we want to see more brands publicly disclosing if their workers have access to a union or independent worker committee.

Living wages A â&#x20AC;&#x2DC;living wageâ&#x20AC;&#x2122; can be defined as a salary that is enough to cover basic living costs and to allow a decent standard of living for the worker and his or her family. This wage level is normally more than the official minimum wage and above the poverty line; in other words, a salary which makes it possible to provide a dignified life for you and your family. The estimate of a living wage varies by region, and guidance on what a living wage is across regions is offered by Government and international institutions, academic organisations, and NGOs.

The issue of a living wage is a fraught, complex and hugely important issue for workers within fashion supply chains. Most workers in the fashion industry around the world do not earn a living wage, which makes it difficult, if not impossible, to meet their basic needs with the salaries they earn from working in the supply chain. For this reason, it is so important to shed some light on what brands disclose about the efforts they have made to address this problem.

We found that only 10% of the brands published their commitment to providing workers with a living wage in their supply chain. In this regard, it is important to mention that there are a number of international initiatives that make methodologies available, regarding how to establish the value of the living wage and support brands in achieving the payment of a living wage to workers within their supply chains.

Examples of such organisations include Action, Collaboration, Transformation (ACT), the Fair Wage Ladder of the Fair Wear Foundation, the Fair Wage Strategy of the Fair Labour Association and the Textile Standard from Fairtrade International. It is also possible to compare and calculate fair

wages using either the Anker methodology or Asia Floor Wage. In Brazil, Dieese calculates and publicly discloses the monthly readjustment of the minimum salary necessary to cover costs incurred by the worker and his/ her family, including food, housing, health services, education, clothing, hygiene, transport, leisure and a private pension.

earn more than the minimum wage.

According to the global Index, only two out of 200 brands (1%) publish this information.

Only two of the brands (7%) describe how they have supported the payment of a living wage for the workers within their supply chain, which could include: regular collective bargaining; promotion of dialogue between factory managers/ owners and the workers; investment in training in salary negotiation skills; incentives for the adoption of digital payroll for the companies in the supply chain; implementation of mechanisms to detect when workers have not been paid, or have been paid late; offering an increase in order commitments in exchange for an increase in pay for the workers.

There is almost no information about brands purchasing practices

Only two brands report their annual progress towards their commitment to pay a living wage but none of the brands informs the percentage of workers within their supply chain that

3. Ethical Trading Initiative was set up to improve working conditions in global supply chains, developing efficient approaches for the implementation of the ETI base code for labour practices.

This clearly shows that major brands and retailers are not moving fast enough to address this key issue that has such a huge impact on the lives of workers.

According to the Ethical Trading Initiative3, within a supply chain, the suppliers have a key role and responsibility for providing good working conditions for the people they employ, but their efforts can be undermined by the buying practises of their customers, those that are often the same brands and retailers pushing them to comply with their social and environmental policies. Several factory owners in Bangladesh have reported to us recently that they are receiving 3-5% cheaper prices for their orders from brands every year and claim this is one of the main reasons they canâ&#x20AC;&#x2122;t increase wages for their employees.

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5. SPOTLIGHT ISSUES IMPLICATIONS It will be very difficult for wages to improve for garment workers within fashion supply chains if brands and retailers continue to reduce their prices paid per piece, season by season. This provides a barrier for suppliers to pay a living wage to their employees or to offer them satisfactory working conditions. In addition, there are other demands from brands, related to design, order planning, invoicing and shipping that can sometimes contribute to suppliers making their employees work excessive overtime or they might call in casual labourers and sub-contracting without the brands authorisation.

In 2019, new indicators were included in the Spotlight Issues section, so we could look more deeply and in greater detail at what brands disclose about their purchasing strategies and practices, and how these contribute to the decent work agenda along the supply chain.

The lack of information provided by brands on this issue is shocking. Not a single brand discloses its method for calculating labour costs, including wages, social charges, sick leave, holidays, and requests for leave when looking at the price they pay suppliers

for products. In comparison the global Index found that six (3%) of brands from the 200 reviewed disclosed such information.

Basically, we were looking to see if brands talk about how they determine if the price they pay to suppliers allows for the payment of a living wage rate.

The point being that the prices they’re paying to suppliers should be high enough to enable the payment of a living wage to workers.

Only 1 brand discloses its supplier payments policy Only one company, Zara, discloses its policy for payment of suppliers, within the maximum time frame of 60 days, compared with thirteen brands (6.5%) on the global Index. Some countries set commitments, like the United Kingdom’s Prompt Payment Code, which has, as a main requirement, the settlement of invoices within 60 days but Brazil does not yet have any legislation like this. In addition, in Brazil not a single brand reviewed publishes the percentage of payment to suppliers within the time frame and according to the terms as agreed, compared to four brands (2%) in the global Index. This is also a key point to address as it has a direct impact on the suppliers’ capacity

to ensure regular and fair payment to direct employees and/or outsourced personnel, not to even mention keeping up with other financial responsibilities and commitments.

In the global Index and the Brazil index no brand disclosed the percentage of orders where penalties were enforced upon the suppliers, or the reasons for these penalties being imposed for reasons such as; late delivery, damaged products, non-compliances etc, which can also have a direct impacts on suppliers profits and there for ability to uphold their human rights and environmental responsibilities.

Only 2 brands share their processes collecting supplier feedback on their purchasing practices Only two (7%) of brands disclose their processes for collecting feedback from their suppliers on the companies purchasing practises such as holding regular meetings with suppliers, conducting surveys for suppliers to provide feedback or via the better buying programme (it is important to note that carrying out audits on suppliers is, in itself, not sufficient to earn points here). In the global Index 18 brands (9%) scored points for this question. However, none of the brands

disclosed the feedback provided by suppliers, compared to six brands (3%) on the global Index.

Taking into consideration that brands and retailers expect a relationship with their suppliers based on confidence and trust, they should also be willing to share more information publicly regarding their own commitments and efforts to be responsible business partners.

How is racial equality and discrimination between nationalities dealt with by brands operating in Brazil?

Aware of the importance of this debate at local level, and also seeking to achieve goal 8.8 of the Sustainable Development Goals – related to the protection of labour rights and the promotion of work environments that are secure and well-protected, for all workers, including migrant workers, particularly migrant women, and people with unsteady jobs – our team in Brazil has defined that issues concerning racial equality and discrimination between nationalities should be included in the Brazil Index since its inception in 2018.

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5. SPOTLIGHT ISSUES IMPLICATIONS However, very few companies share information about these matters. Only two brands (7%) publish information about number or percentage of workers based on nationality or ethnicity of their direct employees. Compared to last year, we observed a slight increase, as in the past only one brand (5%) among the 20 analysed published some data on this issue.

No brand publishes, on an annual basis, the ethnic pay gap within the company, and only one brand (3%) discloses its actions focused on the promotion of racial equality among their employees, such as the establishment of a culture that favours racial diversity, and the inclusion of under-represented nationalities at executive and management level within the company – in 2018, no company published this information.

While, in 2018, three brands (15%) - C&A, Renner and Zara – published information about their actions towards integration and protection of foreign migrant workers in their supply chains, in 2019, we saw a slight fall, as only two of the brands (7%), namely C&A e Renner, continued to share such information.

Examples of best practices in transparency Both C&A and Zara are members of ACT - Action, Collaboration, Transformation, an agreement between leading brands and trade unions working toward a more sustainable industry through the implementation of living wages. This initiative, in turn, promotes the following for the whole sector: the creation of programmes for collective bargaining; the preparation of practices for responsible purchases; and active engagement of the Governments of the countries, in the discussions.

Zara, as part of the Inditex Group, has a Global Framework Agreement, signed with IndustriALL Global Union. The global framework agreements provide mechanisms and standards to support workers rights and access to join trade unions and protect workers’ rights throughout global supply chains.

Renner also has a Suppliers’ Council (page 37 of the hyperlink) consisting of national suppliers considered strategic by the company, that operates as an important forum for exchange of experiences and relevant discussion of issues of common interest, in quarterly meetings, with the aim of constructing an efficient, competitive and sustainable chain.

The company also has another programme “Promoting improvements in working conditions and management at sewing workshops in São Paulo” (page 59 of the hyperlink) in partnership in other brands and the ILO (International Labour Organisation), promoting development and skills training in 30 workshops of Bolivian immigrants in the city of São Paulo and its metropolitan area.

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5. SPOTLIGHT ISSUES IMPLICATIONS SDG 12: Responsible consumption and production When we address the issues involving sustainable consumption and production, we understand that this is a critical issue that needs to be addressed urgently, we should do more with less. In this context. SDG 12 seeks to achieve a range of targets by 2030, including: • Significant reduction in the generation of waste, through prevention, reduction, recycling, and re-use; • Encouraging companies, especially larger companies and transnational companies, to adopt sustainable practices and include information on sustainability in their reports; • Attain sustainable management and efficient use of natural resources; • Make sure that people, wherever they are, have information and awareness about sustainable development, and styles of living in harmony with nature.

For this reason, we would like to know what major brands and retailers have published about the use of sustainable materials, and what they do to promote the use of clothes for longer, as well as how they handle textile waste and excess production. Finally, we looked for information regarding investment in circular solutions4.

Strategies for use of sustainable materials We found that 33% of the brands publish a strategy or roadmap for sustainable management of materials, while only 17% publish the annual volume of products (including clothes, footwear, and accessories) made using more sustainable materials such as organic certified cotton, chromiumfree tanned leather or textiles from recycled fibres.

Only one brand (3%) publishes measurable targets with set time frames for the reduction of virgin plastics – this is a very low figure, considering just how serious the debates have become around the world, about the use of plastics in a wide range of sectors.

Management of textile residue and excess production We found that 30% of the companies publish their strategies to reduce their excess or pre-consumer waste such as, scraps and left-over production material, unsold or defective stock and production samples etc – which is a fall when compared to 2018, which had a result of 40% among the 20 brands analysed. However, these results are better than what was found in the global Index, where 26.5% of the brands analysed in 2019 made their strategies public.

We also found that only 13% of the brands published whether they provide permanent systems for returning used clothing items for recycling in their shops – which accounts for a fall of 7 percentage points when compared with 2018 and is below the 2019 global Index, which found that 23.5% published information relating to this indicator.

As was the case in 2018, no company published whether they offer services to repair clothing or accessory items for clients, to extend the life of the products. In the global Index, 10% of the brands offer these services, most being luxury brands, which offer the repair of shoes, bags or other valuable fashion items.

Finally, we note that only 13% of companies disclose the way in which they invest in circular solutions beyond reuse or downcycling, such as, for example, through processes for fibre and textile recycling in a closed loop system (in this case, the use of recycled materials is not enough to score points). The global Index shows a result of 26%. Considering that about 80% of all clothes produced in the world end up either incinerated or in landfills, with only 20% being reused or recycled, it is essential and urgent that major brands and retailers provide more information about their effort to reduce the generation of residue and excess textiles, to move towards more circular systems.

However, the concentration of efforts to recycle clothing and textiles without addressing huge volume and increase in the quantity of new clothes and accessories produced every year, shall continue to generate negative impacts in an unsustainable way.

4. Circular solutions such as, for example, reduction in the use of non-renewable natural resources, including: virgin plastics; reductions in excess production; unsold and defective stock; samples of production or pre-consumption residues; the implementation of systems that allow the return of parts for reuse or recycling; the provision of repair services that can lengthen the life cycle of the products; investment in closed-circuit recycling systems for parts, and so on.

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5. SPOTLIGHT ISSUES IMPLICATIONS [BELOW] PHOTOGRAPHY BIRDSONG birdsong.london

For example, the Inditex Group (owner of brands such as Zara, Bershka, Massimo Dutti, Pull & Bear and Stradivarius) reported that they placed over 1.5 billion products on the Market in 2017. This is not necessarily measured by the methodology of the Index, but is still extremely important to note and very alarming.

Examples of good practices in transparency C&A developed the first jeans with Cradle to CradleTM Gold certification in the world and, together with Fashion for Good, made a set of resources publicly available for other fashion companies to use in the development of their own products with the same certification. In addition, the company implemented a programme for collection of clothes in nine countries.

To evaluate the reduction of the impact on the life cycle already achieved with Re Jeans, a collection of recycled jeans, Renner (page 48 of the hyperlink) developed a Life Cycle Analysis (LCA) from cradle to cradle, with the support of the University of SĂŁo Paulo (USP), with checking of independent third party, from raw materials to their reinsertion in the cycle, to compare the impact of its life cycle with regard to the impact of the traditional virgin cotton thread.

5. https://quantis-intl.com/measuring-fashion-report-2018/

SDG 13: Climate Action Among other key targets, SDG 13 focuses on the integration of measures to tackle climate change and the impact it has on policies, strategies and national planning. The UN Fashion Industry Charter for Climate Action contains the vison to achieve net-zero emissions by 2050. It includes a target of 30% greenhouse gas emission reductions by 2030 and a commitment to analyse and set a decarbonisation pathway for the fashion industry drawing on methodologies from the Science-Based Targets Initiative.

Fashion Revolution is a signatory and official supporter of the Charter, and therefore shall work together with the other signatories and with the United Nations (UN) to promote wide action to tackle climate change within the fashion industry.

Thus, in 2019, we wanted to focus on what the major players in the fashion industry share about their climate impacts, through carbon footprints, water footprints, and the use of renewable energy.

Carbon footprint

Water footprint

We found that 17% of companies publish their carbon footprint on an annual basis, or their levels of emissions of greenhouse gases (GHG) from their own facilities, and only 10% publish, on an annual basis, the carbon footprint or GHG emissions of their supply chain â&#x20AC;&#x201C; where over 50% of emissions from this sector actually occur, according to Quantis5. These figures are well below those analysed in the global Index, which suggest 55% and 19.5% respectively, for the indicators concerned.

We see that 17% of companies publish their water footprint on an annual basis, while only 10% publish, on an annual basis, the water footprint at the level of facilities for processing and finishing, and only 7% at the level of production of fibres and/or raw materials. On the global Index, these results come respectively to 30.5%, 14% and 4%.

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5. SPOTLIGHT ISSUES IMPLICATIONS Use of renewable energy In relation to the percentage use of energy from renewable sources, 27% of the companies share data about their own facilities, but no companies publish this information for the supply chain.

We observe that some brands release data on reductions of the amount of energy used in their operations and supply chains, but this aspect has not been analysed in this year’s Index.

No brand publishes how it links its environmental impact to its financial bottom line We observe that none of the brands publish, as part of its statements or account, any information that maps their environmental impacts directly to their financial statements. There are now some methodologies to calculate this kind of information, such as Kering’s (EP&L) Environmental Profit & Loss statment. Methodologies like this one propose a monetary analysis of the environmental gains and losses, linked to the operations of a company and its supply chain.

The global Index shows that a few brands out of 200 (3.5%) map their environmental impacts directly linking them to their statements of accounts and bottom line.

Finally, with regard to SDG 13, we hope that, as the work carried out by the Fashion Industry Charter for Climate Action, of the United Nations (UN), makes progress, we could see more brands starting to link their carbon footprints, their use of renewable energy, and the way in which they manage other environmental impacts to their financial results.

Examples of best practices of transparency C&A provides detailed data regarding their water footprint, on an annual basis, showing its green water footprint (used in the cultivation of plants), the grey water footprint (a measure of pollution) and blue water footprint (used in the cultivation of a crop, or in production of goods and services). The company also provides details about its water footprint, in the whole life cycle of the product, from raw materials to the final use by the consumer, within a period of 1 year.

The Guararapes Group, which includes Riachuelo, has more than 150 shops totally supplied with energy (coming from Small Hydro Units -, PCH, Biomass, Aeolian and Solar). In addition, the company’s facility at Fortaleza is also supplied with 100% of energy coming from these sources, indicating that 90% of all jeans sold at Riachuelo shall be produced based on renewable sources of energy.

75%

Of all consumers said that it is important that the brands protect the environment at all stages of the manufacture of the products.

Fashion Revolution Consumer Survey 2018

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"When I received the job proposal to plant cotton, I was very happy. This was because I had the dream of becoming an agroecological farmer. On one occasion, I was even humiliated for wanting to take part. It was shocking. I am proud to say: I will get the certification. As I am a woman, they feel that we do not have the same capacity as men do. This came as a great shock to me but with great satisfaction, I say: I am going to be certified. This is challenging because, when they see us walking to the field, they swear at us and say that this will not get us anywhere. It is very hard to bear. However, we do not lose motivation because of this. We are going to get stronger, to show what we can do. For women, joining agroecological consortiums was something new because, until then, we only worked in our own backyards, in our very homes. It is a long journey to get to the cotton field. We have to commute. We have to leave the house clean and tidy, leave the children at school, and have lunch ready. This means we have a lot to do before we even get to the cotton filed. Men just pick up their work tools and head to the field. With women, this is not the case. They need to take care of the house, of the children, and of the animals. There are several things to be done before they make their way to the field.

Then the woman needs to go back home because there are more tasks to be done. This is challenging, but we can work it out."

VANUSA INÁCIO DE CARVALHO FAMILY FARMER FROM THE IRAPUÁ COMMUNITY, CEARÁ.

PARTICIPANT IN THE ‘CONSÓRCIOS AGROECOLÓGICOS COM ALGODÃO’ (AGROECOLOGICAL CONSORTIA WITH COTTON) PROJECT

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5 WHAT SHOULD YOU DO WITH THIS INFORMATION?

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CITIZENS

We hope the Fashion Transparency Index Brazil has helped you understand more about the human rights and environmental policies, practices and impacts of the world’s largest fashion brands and retailers. With this information, we invite you to ask brands #WhoMadeMyClothes and demand greater transparency At the moment the public does not have enough information about where and how clothing is made.

As consumers, we have the right to know that our money is not supporting exploitation, human rights abuses and environmental destruction. But there is no way to hold companies and governments to account if information about what we buy is kept secret.

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

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To encourage brands to do more, you can take action in two ways:

We should be able to easily scrutinise the brands that we spend our hard-earned money with and make choices that better align with our values. We can’t do that without comprehensive, credible and comparable information about their policies, practices, and crucially, the impacts and outcomes of their efforts. This is why greater transparency is so essential.

Finally, we hope this research activates you to dig even deeper into the production processes and people behind what you wear. We hope it makes you think twice about where and how you spend your money.

A lways ask the brands you buy #WhoMadeMyClothes You can do this by tagging your favourite brands on social media and using the hashtag, or you can use our automated email tool to get in touch directly.

Why ask this question? Because it sends brands a strong message: you care about the way your clothes have been made and want the assurance that the people making them have been paid fairly, treated with respect and that the environment wasn’t destroyed in the process. Brands are listening, tell them to do more!

Ask your elected government officials to do two things: - Require fashion brands to be transparent, demand that brands disclose who their suppliers are and that they report annually on their social and environmental impacts across the entire value chain using a common framework; - Make fashion brands legally responsible for the impacts they have on our ecosystems and the lives of people working in their supply chains, at home and abroad.

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BRANDS AND RETAILERS 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 sustainability.

It has been encouraging to see many leading brands and retailers become considerably more transparent since our first edition in 2018. However, you can and should do more!

You have the power, resources and moral imperative to ensure that every single person working to make your products is paid fairly, treated with dignity and working in safe conditions. In the face of our accelerating climate catastrophe, you have a huge responsibility to move faster on reducing the consumption of earth’s finite resources and creating business models that are regenerative instead of destructive and linear.

By being more transparent about your policies, practices and impacts, your customers and stakeholders can come along with you on that journey, celebrating and supporting where you get it right and scrutinising the areas where you could be doing even better.

Finally, we hope that participating in the Fashion Transparency Index Brazil has been a useful exercise, helping you to understand where you are leading and lagging on transparency compared to your industry peers.

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We ask brands and retailers to take immediate, concrete steps to: P ublicly disclose your manufacturers and suppliers, provide lists which are downloadable and in accessible formats that your stakeholders can use; Publish

more easy-to-understand information about your social and environmental practices as well as the outcomes and impacts of your efforts across the entire supply chainr;

Publish direct contact details (email address or phone number) for your sustainability or compliance teams, so that your customers and stakeholders can easily get in touch with questions and concerns; Share

more information about your purchasing practices and the steps you are taking to be a responsible business partner to your suppliers; Disclose more environmental data about the amount of carbon emissions, water consumption, pollution and waste created throughout the length of your value chain, and what you’re doing to reduce your footprint; Answer your customers’ #WhoMadeMyClothes requests on social media or via email with practical information and data, not just your policies and principles.

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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 related bodies such as the International Labor 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 violations though the courts. This needs to change.

Transparency is beginning to become subject to legislation. For example, in the UK, companies must now disclose their gender pay gap. France passed a law that requires corporations to assess and address the impacts of their activities on people and the planet, by having them publish annual, public vigilance plans.

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 chains.

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.

We hope the findings of the Fashion Transparency Index Brazil demonstrate the urgent need for stronger mandatory due diligence and transparent reporting from major fashion brands and retailers. Your constituents deserve to know that the clothes and shoes they buy and wear have not contributed to human exploitation and environmental degradation.

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We ask that governments and policymakers take action in several ways to: Legislate and support transparency — i.e. mandatory due diligence and standardised disclosure by brands on human rights and environmental issues; Better implement and enforce existing laws that are meant to protect workers and the environment everywhere;

Make companies at home liable for human rights and environmental harms caused directly or by business partners across its global supply chain, if companies fail to take effective measures to stop harms materialising in the first place.

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CIVIL SOCIETY GROUPS, TRADE UNIONS AND WORKERS We hope that the Fashion Transparency Index Brazil is useful for non-governmental organisations, trade unions and civil society groups who are working directly with producers and supply chain workers on human rights and environmental protection.

This research should help you better understand which major fashion brands are publishing their supplier lists as well as what policies, procedures and commitments that brands claim to have in place so that you can hold them to their word.

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We encourage civil society groups and trade unions to:

Support our call for citizens to ask brands #WhoMadeMyClothes. Find out how here.â&#x20AC;¨

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

Invite workers you know in the supply chain to tell the world their story using our hashtag #IMadeYourClothes. Find out how to activate here.

We invite you to get in touch with us to discuss our findings further and how this research could help you in your efforts to protect workers and the environment

Join us in encouraging brands to publicly disclose supplier lists and more detailed supply chain information;

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

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

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6 ACKNOWLEDGEMENTS

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THANK YOU!

The Fashion Transparency Index Brazil was written by Eloisa Artuso, the Educational Director of Fashion Revolution Brasil, and Sarah Ditty, Policy Director, with the support from Ilishio Lovejoy, Project Manager, Policy & Research, (who are both part of the Fashion Revolution global team), and Renato Moya and Helton Barbosa, from ABC Associados, the technical partner for the Index.

This report has been designed by Emily Sear, Head of Design, with support from Bronwyn Seier, Social Media Manager & Designer (who are both part of the Fashion Revolution global team), and was adapted by Igor Arthuzo, the Head of Design at Fashion Revolution Brazil.

A big thank you to Fernanda Simon, Executive Director; Loreny Ielpo and Barbara Poerner, from the Fashion Revolution Brazil team, and Aron Belinky of ABC Associados, for monitoring and supporting the project process, development of the report.

We would also like to thank Dandara Valadares, Press Advisor, and Mariana Chaves, Head of Communications, who are jointly responsible for the publication of the Index. Thank you for your contributions.

Thank you to all the brands and their representatives for making time to take participate in this project, our meetings and to provide input and feedback on the research questionnaire. We know that brands receive frequent requests from many civil society organisations and NGOs, and it is difficult for them to answer all of these whilst delivering on all their other work. Their involvement is very important and much appreciated.

We would particularly like to thank Andre Melman, Carol Delgado, Cristina Filizzola, Dari Santos, Edmundo Lima, Felipe Villela, Fernando Pimentel, Leonardo Marques, Marcelo Linguitte, María Rosa Nina Sinani, Mércia Silva and Vanusa de Carvalho for their important contributions to this report.

We would also like to thank our pro bono consultation committee, which has been very important in guiding and monitoring the development of the methodology used in the Fashion Transparency Index: Dr Mark Anner, Neil Brown, Ian Cook, Orsola de Castro, Subindu Garkhel, Jenny Holdcroft, Kate Larsen, Dr Alessandra Mezzadri, Joe Sutcliffe and Heather Webb. In addition, we are very grateful to all who have contributed with informal feedback on the methodology.

Our profuse thanks also go out to Ana Fernanda Souza, Carolina Terrão, Elisa Tupiná, Fabrício Vieira, Isabella Luglio and Paula Leal, of the team at Fashion Revolution Brazil, for having been at our side with so much energy and dedication.

We would also like to thank the C&A Foundation for their financial support and also the Aliança Empreendedora, the Brazilian Association of the Textile and Clothing Industries (ABIT), the Brazilian Association for Textile Retail (Abvtex), COPPEAD - UFRJ, InPACTO and the Brazilian Network of the Global Pact, for their institutional support.

Last but not least, we extend our warm thanks to our local representatives, student ambassadors and teachers, as also to all the other volunteers who continue to support the movement in Brazil, and who continue to boost and strengthen the activities of Fashion Revolution in Brazil.

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We would like to thank YOU for reading this report!

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Supporters:

Fashion Revolution is a non-profit organisation, and therefore everything we produce is only possible thanks to the support of financial contributions from organisations and individuals.

Through a small donation for the Fashion Revolution Institution in Brazil, you shall be collaborating towards the strengthening of the movement in Brazil in favour of a cleaner, safer, and more transparent fashion industry for us all through projects such as the Fashion Transparency Index Brazil. Together we shall drive the continued growth of a conversation about the impact of our clothes.

>> DONATE HERE << With your support, we can continue to create positive change and transform the fashion industry!

Thank you!

The Fashion Transparency Index Brazil has received financial support from the C&A Foundation and institutional support from Abit, Abvtex, Alianรงa Empreendedora, COPPEAD - UFRJ, InPACTO and the Brazilian Network of the Global Pact. The content of this report is the exclusive responsibility of Fashion Revolution and does not necessarily reflect the opinions of its supporters.

Technical Partner Fashion Revolution Foundation: Registered Charity in England and Wales under No. 1173421; Company registered in England and Wales under Number 10494997; Fashion Revolution CIC: Company registered in England and Wales under Number 08988812. Registered Address: 19 Dig Street, Ashbourne, Derbyshire DE6 1GF, United Kingdom. Instituto Fashion Revolution Brasil, registered with the Brazilian Corporation Register (CNPJ) under No. CNPJ 30.852.175/0001-98.

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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 refers 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) Carbon Emissions means the release of Carbon Dioxide (CO2), a greenhouse gas (GHG), into the atmosphere over a specified period of time. GHGs, such as CO2 and methane, are any gases which absorb and re-emit heat, and thereby keep the planet’s atmosphere warmer than it otherwise would be. (Source OECD and Ecometrica) Circularity (or Circular Economy) is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. (Source: WRAP) Collective bargaining is a process where employers and unions negotiate to determine fair wages and working conditions. (Source: ILO)

CSR (Corporate Social Responsibility) is a 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)

Due Diligence is the process through which companies appraise their impact on human rights and on the environment and take applicable measures so that the negative impacts may be reduced. (Source: UN Global Pact) Equal pay means that men and women in the same employment performing equal work must receive equal remuneration.

This applies not only to salary, but to all contractual terms and conditions of employment, such as holiday entitlement, bonuses, pay and reward schemes, pension payments and other benefits. (Source: Equality and Human Rights Commission)

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

(Source: Office for National Statistics)

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

Purchasing practices refers 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: Better Buying)

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: Office of the United Nations High Commissioner for Human Rights - OHCHR)

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: OECD) Wet processing facilities are involved in the production of clothing whose activities typically involve rinsing, bleaching, dyeing, printing, treating or coating fabric and laundering. (Source: Garment Merchandising blog)

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ANNEX 2: REFERENCES ABIT (Brazilian Textile Industry Association) – Profile of the Sector - 2017 – Available at: http://www.abit.org.br/cont/perfil-do-setor Accessed on 21 August 2019.

CLEAN CLOTHES CAMPAIGN – Transparency Pledge - 2017 – Available at: https:// cleanclothes.org/transparency - Accessed on 26 August 2019.

ACCORD ON FIRE AND BUILDING SAFETY IN BANGLADESH – Available at: http:// bangladeshaccord.org/ - Accessed on 6 September 2019.

CLEAN CLOTHES CAMPAIGN - Wikirate factory search – 2019 – Available at: https://ccc. wikirate.org/ - Accessed on 6 September 2019.

ACT (ACTION, COLLABORATION, TRANSFORMATION) – Available at: https:// actonlivingwages.com/ - Accessed on 15 September 2019.

CLIMAINFO – Brasil perde área de vegetação equivalente a 3,6 vezes o estado de SP em 33 anos, mostra o MAP Biomas (Brazil loses a vegetation area equivalente to 3.6 times the state of SP in 33 years, shows MAP Biomas) – 2019 – Available at http://climainfo.org. br/2019/08/30/brasil-perde-area-devegetacao-equivalente-a-36-vezes-oestado-de-sp-em-33-anos-mostra-omapbiomas/ - Accessed on: 30 August 2019.

ALLIANCE FOR BANGLADESH WORKER SAFETY – Available at: http://www. bangladeshworkersafety.org/ - Accessed on 6 September 2019.

BEIS and CICM – 2016 - United Kingdom Prompt Payment Code. Available at: http:// www. promptpaymentcode.org.uk/ Accessed on 15 September 2019.

BETTER BUYING PLATFORM - Better Buying Index Report Spring – 2018 – Available at: https://betterbuying.org/better-buyingindex-report-spring-2018-released/ Accessed on 15 September 2019.

CICB – Exportando valor agregado (Exporting added value) – 2019 – Available at: http:// www.cicb.org.br/cicb/dados-do-setor – Accessed on 6 September 2019.

CORPORATE HUMAN RIGHTS BENCHMARK – 2019 - Available at: https://www. corporatebenchmark.org/apparel Accessed on: 3 September 2019.

ELLEN MACARTHUR FOUNDATION – A new textile economy – 2017 – Available at https:// www.ellenmacarthurfoundation.org/assets/ downloads/publications/A-New-TextilesEconomy_Full-Report.pdf – Accessed on: 19 August 2019.

ETHICAL TRADING INITIATIVE - Código Básico da ETI (Basic ETI Code) – Available at: https:// www.ethicaltrade.org/sites/default/files/ shared_resources/eti_base_code_-_ portuguese.pdf - Accessed on: 3 September 2018.

ETHICAL TRADING INITIATIVE - Company purchasing practices – 2019 - Available at: https://www.ethicaltrade.org/issues/ company-purchasing-practices - Accessed on 15 August 2019.

FAIR LABOUR ASSOCIATION - Fair Compensation Strategy – 2015 – Available at: http://www.fairlabor.org/global- issues/ fair-compensation - Accessed on 30 August 2019.

FAIR WEAR FOUNDATION - Wage Ladder – 2019 – Available at: https://www.fairwear.org/ about/ - Accessed on: 15 September 2019.

FAIRTRADE - Fairtrade Textile Standard – 2016 – Available at: https://www.fairtrade.net/ standards/our-standards/ textile-standard. html – Accessed on: 6 September 2019.

FASHION REVOLUTION - Consumer Survey Report – 2018 – Available at: https://www. fashionrevolution.org/ resources/consumersurvey/ - Accessed on: 30 August 2019.

FASHION REVOLUTION - Fashion Transparency Index 2018 – 2018 – Available at: https://www. fashionrevolution.org/ about/transparency/ Accessed on: 12 September 2019.

FASHION REVOLUTION - Índice de Transparencia da Moda Brasil 2018 (Fashion Transparency Index Brazil 2018) – 2018 – Available at: https://www.fashionrevolution. org/ about/transparency/ - Accessed on: 16 August 2019.

FASHION REVOLUTION - While the rainforest burns, we need to know where our leather comes from – 2019 – Available at https:// www.fashionrevolution.org/while-therainforest-burns-we-need-to-know-whereour-leather-comes-from/ - Accessed on 10 September 2019.

GLOBAL FASHION AGENDA – Pulse of the fashion industry – 2017 – Available at https:// globalfashionagenda.com/wp-content/ uploads/2017/05/Pulse-of-the-FashionIndustry_2017.pdf - Accessed on: 6 September 2019.

GLOBAL LIVING WAGE COALITION - Anker methodology – 2019 – Available at: https:// www.globallivingwage. org/about/ankermethodology/ - Accessed on: 22 August 2019.

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ANNEX 2: REFERENCES

GREENPEACE – Amazon Cattle Footprint – 2010 – Available at https://www.greenpeace. org/usa/wp-content/uploads/legacy/Global/ usa/report/2010/2/amazon-cattle-footprint. pdf - Accessed on: 10 September 2019.

GREENPEACE – Slaughtering the Amazon – 2009 – Available at http://tricri.org/wpcontent/uploads/SlaughteringTheAmazon_ ExecSumm_0.pdf – Accessed on: 19 August 2019.

ILO BETTER WORK - Transparency Portal – 2019 – Available at: https://portal.betterwork. org/transparency - Accessed on: 16 August 2019.

INDUSTRIALL GLOBAL UNION - Global Framework Agreements – 2016 -Available at: http://www.industriall-union. org/globalframework-agreements – Accessed on: 12 September 2019.

INTERUNION DEPARTMENT OF STATISTICS AND SOCIOECONOMIC STUDIES – DIEESE – Pesquisa nacional de cesta básica de alimentos (Nationwide survey of basic food hamper) – 2019 – Available at: https:// www.dieese.org.br/analisecestabasica/ salarioMinimo.html#2019 – Accessed on 10 September 2019.

KNOW THE CHAIN - Benchmarks: 2016 Apparel & Footwear – 2016 – Available at: https://knowthechain.org/benchmarks/3/ Accessed on: 3 September 2018.

MICROFINANCE OPPORTUNITIES and FASHION REVOLUTION - Garment Worker Diaries.

Available at: http:// workerdiaries.org/ Accessed on: 16 September 2018.

NATIONAL SPACE RESEARCH INSTITUTE (INPE) – Observação da Terra (Observation of the Earth) – 2019 – Available at: http://www.obt. inpe.br/OBT/noticias/a-estimativa-da-taxade-desmatamento-por-corte-raso-para-aamazonia-legal-em-2019-e-de-9-762-km2 - Accessed on: 22 November 2019.

NATIONAL SPACE RESEARCH INSTITUTE (INPE) – Queimadas (Forest Fires) – 2019 – Available at: http://queimadas.dgi.inpe.br/queimadas/ portal-static/estatisticas_estados/ Accessed on: 22 November 2019.

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 - Accessed on: 26 August 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 Accessed on: 26 August 2018.

OPEN APPAREL REGISTRY – 2019 – Available at: https://info.openapparel.org/ - Accessed on: 30 August 2019.

PARLIAMENT OF THE UNITED KINGDOM - Modern Slavery Act – 2015 – Available at: http://www. legislation.gov. uk/ukpga/2015/30/contents/ enacted – Accessed on: 6 September 2019.

PWC - 17th Annual Global CEO Survey – 2014 – Available at: https://www.pwc.com/gx/en/ ceo-survey/2014/assets/ pwc-17th-annualglobal-ceo-survey-jan-2014.pdf – Accessed on: 15 September 2019.

QUANTIS - Measuring Fashion – 2018 – Available at: https://quantis-intl.com/ measuring-fashion-report-2018/ - Accessed on: 14 September 2019.

SÃO PAULO LEGISLATIVE ASSEMBLY – Law No. 14,946, of 28 January 2013 - 2013 – Available at: https://www.al.sp.gov. br/norma/169311 – Accessed on 15 September 2019.

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

UNFCCC (United Nations Climate Change) – About the fashion industry charter for climate action – 2019 – Available at https:// unfccc.int/climate-action/sectoralengagement/global-climate-action-infashion/about-the-fashion-industrycharter-for-climate-action - Accessed on: 30 August 2019.

UNITED NATIONS IN BRAZIL (ONU BR) – Objetivos do Desenvolvimento Sustentável (Goals for sustainable development) – 2015 – Available at: https://nacoesunidas.org/ pos2015/ - Accessed on: 15 September 2018.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2019

FOR FURTHER RESEARCH, PLEASE CHECK OUT THESE ORGANISATIONS: In Brazil: Akatu akatu.org.br AzMina azmina.com.br Climainfo climainfo.org.br Escravos Nem Pensar! escravonempensar.org.br Greenpeace Brasil greenpeace.org/brasil Human Rights Watch hrw.org/pt/americas/brasil Instituto Identidades do Brasil simaigualdaderacial.com.br/site/?page_ id=1130

Repórter Brasil reporterbrasil.org.br Think Olga thinkolga.com In the world: Clean Clothes Campaign cleanclothes.org Ellen MacArthur Foundation ellenmacarthurfoundation.org Ethical Trading Initiative ethicaltrade.org Canopy canopyplanet.org/campaigns/canopystyle Environmental Justice Foundation ejfoundation.org

Instituto Socioambiental socioambiental.org/pt-br

Fair Labor Association fairlabor.org

Observatório do Clima observatoriodoclima.eco.br

Fairtrade International fairtrade.net

OIT – Organização Internacional do Trabalho ilo.org/brasilia/lang--es/index.htm

Fair Wear Foundation airwear.org

Rede Brasil do Pacto Global pactoglobal.org.br

Know the Chain knowthechain.org

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IMPORTANT FINAL NOTE We are not endorsing any of the brands included in the Fashion Transparency Index Brazil, regardless of how they score. On carrying out this survey, we are not promoting the business model known as fast fashion, which sustains some of the brands as mentioned here, but rather encouraging greater transparency of their practices and processes, as also for all the other brands mentioned.

Fashion Revolution believes that the whole fashion industry needs a radical change of paradigm and that the way in which we produce, sell, consume and dispose of our clothes needs to be systematically transformed. Transparency helps us to reveal the structures of the fashion industry, so that we may better understand how to entirely change this system, in a positive and long-lasting way.

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ABOUT FASHION REVOLUTION Fashion Revolution is the world’s largest fashion activism movement. We are a global campaign working towards systemic reform of the fashion industry with a focus on transparency.

We love fashion, but we don't want our clothes to come at the cost of people or our planet.

We are working year-round to raise awareness of the industry’s most pressing issues. We encourage positive change and celebrate the artisans, the farmers, the spinners, the weavers, the seamstresses, the pioneers and all the diverse people who design and make our clothes all around the world.

We invite you to also get to know our Manifesto.

" The fashion industry was built on secrecy and elitism; it was opaque. Transparency is disruptive - in that sense, it's a breath of fresh air and a useful weapon of change."

Be curious. Find Out. Do something. www.fashionrevolution.org/brazil @fash_rev_brasil @fashionrevolution.brasil

ORSOLA DE CASTRO CO FOUNDER, FASHION REVOLUTION

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