Fashion Transparency Index - Brazil 2022

FASHION INDEX

2022 EDITION

A review of 60 of the biggest fashion brands and retailers in Brazil ranked according to their level of public disclosure on human rights and environmental policies, practices and impacts.

EXECUTIVE SUMMARY

About Fashion Revolution

About the Fashion Transparency Index Introduction

How the Index has changed this year

KEY FINDINGS

KEY RESULTS

ABOUT THIS INDEX

The changes we want to see The role of transparency in achieving change The role & aims of the Fashion Transparency Index How the Fashion Transparency Index drives change

METHODOLOGY & SCOPE OF THE RESEARCH

How brands and retailers are selected What does brand participation mean? The 60 brands selected The scope or our research

About the research process About the methodology Methodology advisory committee

About the annual review of the Index Adapting the methodology to the Brazilian context Limitations of the research How we calculate the findings Weighting of the scores A guide to the final scoring

FULL RESULTS

The final scores

Quick overall findings Average scores across the sections POLICIES & COMMITMENTS

GOVERNANCE

Viewpoint: Regina Magalhães, Senior Executive in Sales, Digital Transformation and Sustainability SUPPLY CHAIN TRACEABILITY

Case Studies: Transparency in action Case Studies: #WHOMADEMYCLOTHES in action Viewpoint: Luciana Sonck, Tewá 225 KNOW, SHOW, FIX SPOTLIGHT ISSUES

Viewpoint: Race and Diversity Committee of Fashion Revolution Brasil Viewpoint: Julia Codogno, Communicator and co-creator of the Retecendo project Viewpoint: Natalia Guimaraes Moreira, Postdoctoral researcher Viewpoint: Dr. Leonardo Marques, Audencia Business School Interview: Daniela Dias, Sos Amazônia

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 2022. All rights reserved. This document is not to be copied or adapted without permission from Fashion Revolution CIC.

EXECUTIVE SUMMARY

ABOUT THE FASHION TRANSPARENCY INDEX ABOUT FASHION REVOLUTION

Fashion Revolution has become the largest fashion activism movement and works towards a vision of a fashion industry that conserves and restores the environment and values people over growth and profit. The Rana Plaza disaster in Bangladesh instigated the creation of Fashion Revolution and spurred millions to join our call for greater transparency and accountability in the fashion industry.

The issues in the fashion industry never fall on any single person, brand, or company. That’s why we focus on using our voices to transform the entire system. With systemic and structural change, the fashion industry can lift millions of people out of poverty and provide them with decent and dignified livelihoods. It can conserve and restore our living planet. It can bring people together and be a great source of creativity and expression for individuals and communities.

In Brazil, since 2014, there have been actions to develop projects, carry out activities and foster the creation of a network of people, initiatives, and organisations in the sector. In 2018, these actions became the Instituto Fashion Revolution Brasil, a civil society organisation.

The Fashion Transparency Index Brazil is an annual review of the largest Brazilian fashion brands and retailers ranked according to their level of public disclosure on human rights and environmental policies, practices and impacts in their own operations and in their supply chains.

We focus on the biggest and most profitable brands and retailers because they have the biggest negative impacts on workers and the environment and therefore have the greatest responsibility to change.

Transparency is foundational to achieving systemic change in the global fashion industry, which is why we have been campaigning for it since 2014 and why we created this tool. Transparency underpins transformative change but unfortunately, much of the fashion value chain remains opaque while exploitation thrives with impunity.

Transparency is not to be confused with sustainability. Transparency is a first step; it is not radical, but it is necessary. However, without transparency, achieving a sustainable, accountable and fair fashion industry will be impossible.

The Fashion Transparency Index Brazil reviews brands’ public disclosure across 252 indicators in 5 key areas:

1. Policy & Commitments

2. Governance

3. Traceability

4. Know, Show & Fix

5. Spotlight Issues, which this year covers: Decent work, covering forced and bonded labour, living wages, purchasing practices, unionisation and collective bargaining

Gender and racial equality

Sustainable sourcing and materials

Overconsumption, waste and circularity

Water and chemicals

Climate change & biodiversity

For a deeper dive into how this Index works, why transparency matters and the methodology, please see the two chapters below: About this Index; Methodology & Scope of Research.

INTRODUCTION

Extreme climate events have become increasingly frequent in Brazil and worldwide. This year in Brazil, we have witnessed heavy rainfall resulting in floods and landslides and intense heat waves. According to estimates, we have a little over six years to avert climate catastrophe.

Despite the urgency of taking action against the climate crisis, headlines about deforestation reaching new records are becoming the norm in our country and it is estimated that deforestation increased in all six national biomes between 2020 and 2021. The Amazon rainforest, which is fundamental for the environmental and climate balance of the entire planet, was the most affected region, comprising 59% of the total area deforested in the country.

To further accentuate this worrying scenario, indigenous peoples, who according to various studies, act as protectors of forests biodiversity and shields against deforestation, are having their rights dismantled and their population impacted by the increase of livestock farming, agriculture and mining. Another concerning fact is that Brazil is the country that has killed the most environmental activists and community

leaders in the world in the last ten years. One third of the deaths were of indigenous and black people, with 85% of the cases occurring in the Amazon rainforest. The conflicts linked to the murders are related to land disputes, mining, hydroelectric plants, and agribusiness.

Moreover, although the income of much of humanity is worse off due to the COVID-19, the wealth of the ten richest men in the world has doubled since the start of the pandemic while more than 160 million people have been pushed into poverty. In Brazil, it is estimated that the unemployment level will be among the 10 highest in the world in 2022. Given the current levels of inequality and lack of opportunities, Brazil is back on the Hunger Map and, according to the United Nations, chronic hunger affects 4.1% of Brazilians - which is higher than the global average.

Social justice and climate justice are intrinsically linked. As fashion is one of the world’s largest industries that impacts people and nature, it has vast power and a moral imperative to operate more fairly and transparently, providing a decent livelihood for its workers and contributing to the maintenance and regeneration of the environment.

However, the results of the Fashion Transparency Index Brazil show that a large part of the major fashion brands and retailers in the Brazilian market have not yet taken the first step towards systemic change: transparency. For another year, our research has found that the fashion industry tends to disclose more information publicly about their policies and commitments, but less so on their outcomes and impacts. Moreover, overall, brands continue to disclose more information about their own facilities than about their supply chain - where most of the risks lies.

Another worrying point about the industry is that, despite all the environmental and social signs pointing to an urgent need to slow down production, an even faster and cheaper production model is gaining popularity. In this model, brands add thousands of new products to their websites every day, making billions of dollars while consumers are manipulated into a cycle of consumerism and workers face precarious working conditions and low pay.

All these aspects only reinforce that the fashion industry urgently needs to be more transparent and forward-thinking. The fashion industry needs to address numerous challenges our society faces today such as the climate crisis, the consequences of unsustainable production and consumption, social inequalities and precarious work intertwined in the value chain of our clothes. To really achieve a systemic revolution, we need the action and collaboration of everyone involved in the sector - citizens, consumers, brands, governments, NGOs, etc. in order to redefine what is considered valuable in our society. We must value people as well as the conservation and restoration of the environment over economic growth and profit.

HOW THE INDEX HAS CHANGED THIS YEAR WELCOMING

Over the past few years, we have conducted a detailed review of the Index globally through stakeholder interviews, media analysis and surveys. As a result, we have taken a number of steps to strengthen the methodology and push brands and retailers to go beyond publishing their policies and commitments, to greater public disclosure on the implementation and results of their actions.

We understand that policies do not always accurately reflect how a business is run and, in an effort to push for more stringent disclosure, we have added and enhanced some research guidelines. These guidelines help our researchers during the search for information disclosed by the brands. For example, for Policies and Commitments subsection 1.2, we do not award points in cases where brand policies "encourage" or "suggest" a supplier to do something. Points were awarded only when policies "require" suppliers to comply with a certain practice. Language, when ambiguous, can be used as a way to deflect responsibility. Another example is indicators showing progress of initiatives adopted by companies, in which respective targets on these initiatives

must have been publicly disclosed in order for points to be awarded. The disclosure of targets and their progress promotes greater accountability from brands, especially in cases where targets are not being met. Thus, we aim to identify whether brands disclose both their long-term ambitions and evidence of year-on-year progress in results.

We have also carried over the changes made last year such as halving the weighting of points in Section 1: Policies and Commitments and giving more weight to indicators which focus on implementation and outcomes of their actions. These changes have allowed us to prioritise public disclosure on actions such as supplier audits, living wages, purchasing practices, gender and racial equality, and climate and water data in the supply chain. In addition, as of this year, we no longer accept supplier lists that do not have a significant proportion of brand suppliers at each of the three levels analyzed in the Traceability section.

Finally, we strengthened Communications Guidelines for the brands and retailers reviewed to avoid this Index being misunderstood or misused by brands, such as for greenwashing purposes or other types of misinterpretations. We

are committed to drawing attention to misuses of the Index and will seek to request corrections to any misleading communications. If you see anything of concern being shared by brands about the Index, please let us know. You can read our Communication Guidelines here.

LICENCES

YOUR FEEDBACK

We recognise that the Index can always be improved. Any comments or questions are welcome.

Write to: educacional.brasil@fashionrevolution.org

The Fashion Transparency Index Brazil is licensed under a Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0). It is not a Free Culture Licence. Please see this link for more information.

We do not grant any licence to use the raw data that we compiled to produce this Index and that we make available in the dataset file. You are only permitted to view the Raw Data File.

You are free to copy and redistribute the Fashion Transparency Index Brazil in any medium or format provided that you give Fashion Revolution CIC and Fashion Revolution Brazil credit for creating it. This licence does not give you the right to alter, remix, transform, translate or otherwise modify the content in any way. This includes providing it as part of a paid service, nor as part of a consultancy or other service offering.

You must contact Fashion Revolution transparency@fashionrevolution.org at to obtain a licence if you want to commercialise the whole or any part of this Index.

KEY FINDINGS

This year, we reached the fifth edition of the Fashion Transparency Index Brazil analysing the public disclosure of data on policies, practices and social and environmental impacts of 60 major brands and retailers operating in the domestic market. In these five years, the Index has been pushing brands with a relevant presence in the national market to publicly disclose information about their own operations as well as about their supply chains. The project has been a useful tool to open dialogue with brands, their employees and other stakeholders, bringing the debate on transparency to these companies’ management.

Once included in the Index, brands tend to show an increasing evolution year by year. For example, when only looking at the group of 20 brands that have been reviewed since

2018, their overall average score in 2022 would be 31%. This represents a difference of 14 percentage points compared to the result of the 60 brands reviewed this year. Furthermore, when looking at the 30 brands reviewed since 2019, there is an evolution in all five sections of the Index - with an increase between 6 and 14 percentage points. However, overall progress is still slow in the face of the many challenges encountered in the industry.

Among the brands reviewed this year, C&A obtained the highest score, with 73%, followed by Malwee, with 68%, and Havaianas, Renner and Youcom, all with 57%. In addition, 22 brands scored zero: Besni, Brooksfield, Caedu, Carmen Steffens, Cia. Marítima, Colcci, Di Santinni, Fórum, Havan, Klin, Kyly, Leader, Lojas Avenida, Lojas Pompéia, Marisol, Moleca, Netshoes, Nike, Penalty, Sawary, TNG and Trifil. In addition, 36 brands, or more than half of those reviewed, scored in the 0% to 10% range.

For another year, the section with the highest score was Policies and Commitments, with 31%. This indicates that the brands reviewed publicly disclose more information on their policies and commitments related to human rights and the environment, and significantly

less on the other sections of the Index. As we moved through the questionnaire, we observed a progressive drop in the average scores. For example, the section on Corporate Governance had an overall average of 20%; Traceability, which looks for the detailed disclosure of supplier lists, 18%; and Know, Show and Fix, which looks for due diligence procedures and supplier assessments, 14%. The lowest average score was 12%, which was found in the Spotlight Issues section, in which we searched for information on urgent topics such as combatting modern slavery, fair living wages, purchasing practices, trade unionisation, gender and racial equality, sustainable materials, overconsumption, waste, circularity, water, chemicals, deforestation, regeneration, carbon emissions, and energy use. Despite the low averages observed, it is noteworthy that only the sections on traceability and due diligence procedures and supplier assessments saw a decrease from the 2021 results. The other sections made little progress or remained stable.

Considering the severity of the crises faced today, such as climate change, systemic racism and economic inequality, and the growing public call from citizens for corporate transparency - as evidenced by the

steady increase of people asking #WhoMadeMyClothes #WhatsInMyClothes and #TheColourOfWhoMadeMyClothes - brands need to make faster progress in publicly accounting for their social and environmental impacts.

In the first editions of the Fashion Transparency Index Brazil, brands were resistant to disclose their detailed supplier lists and in 2018, only 5 brands out of the 20 reviewed disclosed their direct suppliers. Although progress is still slow, in this edition, 20 out of the 60 brands reviewed have released their lists related to these suppliers. Over the years, brands have started to release more robust lists, with more suppliers and more details about each facility. For example, this year, 27% of brands disclosed gender breakdowns and 23% disclosed the number of migrant workers in each facility. In 2018, no brand disclosed this information.

Progress on transparency remains very slow, as the overall average score of the 60 major fashion brands operating in Brazil, was 17%, which is a decrease of 1 percentage point

Only 1/3 of brands (33%) disclose information about their direct suppliers, classified as cutting, sewing, finishing, assembly, finished product and packaging facilities

Despite the progress observed, it is worrying that 37 out of 60 brands scored zero in this section, showing they do not have any public information on the traceability of their supply chain. The reluctance of so many brands to disclose their supply chain indicates that legislation is needed in relation to this.

The disclosure of supplier lists is an essential step towards more transparent and responsible fashion. It is only through visibility behind the scenes of this industry that it will be possible to act effectively on behalf of human rights and nature. It is impossible to hold companies and governments accountable if we cannot see what is really happening in their supply chains. Companies have a responsibility to look at their chains and then identify and address the potential risks and impacts on human rights and the environment. The lack of visibility on these issues allows for degrading working conditions and environmental damage to occur.

The level of disclosure decreases as we move along the value chain, and away from brand-controlled operations. Only 28% of companies disclose data on their processing facilities, such as weaving, printing, finishing, dyeing and laundry facilities. This number decreases to 8% when looking at information on raw material suppliers.

There is an urgent need for greater disclosure of all the suppliers of the brands,

including the indirect ones, reaching down to the raw material level, and considering both national and international suppliers. We encourage more brands to release detailed lists of their suppliers in machine readable formats, in alignment with the Open Data Standard for the Apparel Sector. For brands that already publish their lists, we encourage them to accelerate their progress towards a deeper and more comprehensive level of traceability.

The planet is reaching several critical points and the impact that human action has had in intensifying climate change over the last 2,000 years is clear. In 2022, we reach the Earth Overshoot Day, that is, the date when humanity’s demand for natural resources exceeds the Earth’s capacity to produce or renew those resources over 365 days two days earlier than in 2021.

monitoring data on greenhouse gas (GHG) emissions is an essential step for brands and retailers to effectively reduce their emissions and meet their decarbonisation targets. Among the brands reviewed, 33% publish the carbon footprint of their own facilities.

1/3

The impacts of the climate crisis are felt disproportionately and contribute to accentuating social inequalities. Groups already in a vulnerable situation are the most affected and societies with high levels of inequality are the least resilient to the climate crisis.

In addition to social impact and environmental degradation, the increase in global temperature can impact the productivity of companies. According to an ILO estimate, by 2030 more than 2% of total working hours worldwide can be lost because of high temperatures. This means a loss of productivity equivalent to 80 million full-time jobs and the cumulative financial loss due to heat stress is expected to reach US$ 2,400 billion. If nothing is done now to mitigate climate change, those costs will be much higher as global temperatures continue to rise.

Similar to the other parts of this report, disclosure decreases as we move away from brand-controlled operations. GHG emissions from the supply chain are disclosed by 28% of companies - up 10 percentage points from 2021 - and 18% publish their carbon footprint at the raw material level - up 8 percentage points from last year.

Thus, it is imperative that the fashion industry is more incisive in tackling the climate crisis. Accurately collecting and

The Intergovernmental Panel on Climate Change (IPCC) warns that it will not be possible to contain the temperature increase to 1.5°C, as foreseen in the Paris Agreement, without curbing deforestation and regenerating nature. Despite this, none of the 60 major brands reviewed disclose, for the second consecutive year, their commitments to end deforestation in their value chains.

It is worrying that no brand has positioned itself on the issue, since several materials

Despite the urgency of the climate crisis, only 13% of brands disclose a decarbonisation target that is verified by the Science-Based Targets Initiative and covers their entire supply chain

Even with deforestation reaching new records in Brazil, no brand has disclosed zero deforestation commitments

of brands publish the carbon footprint of its own facilities

widely used by the industry, such as cotton, leather and viscose, have the risk of being associated with deforestation. In the case of leather, for example, a study by Stand Earth showed that more than 150 fashion brands have connections with the Amazon rainforest deforestation through the purchase of leather. Some of these brands are reviewed by this report.

are discarded into the environment every day. The global fashion industry is one of the most water intensive and a major contributor to water pollution.

90%

of brands don't publish their supplier's wastewater test results.

Despite this, the disclosure of data on water and chemical use by the brands reviewed is low. Only 8% of companies disclose a commitment, with their respective progress, to eliminate hazardous chemicals. In addition, 18% of brands disclose the process they use to conduct water-related risk assessments and only 10% publish wastewater test results from their suppliers. Transparency on these issues is key to ensuring that brands are held accountable for their impact on local biodiversity, garment workers and their communities.

Regarding water usage, 33% of the brands have a policy in place that covers this for their suppliers, but only 7% publish the water footprint of the processing facilities and 2% disclose the total water use at the raw material level.

which defines the sector's current business model. Fast and excessive production, low quality products, consumerism, limited recycling, reuse and repair mechanisms in which less than 1% of the material used to produce clothes is recycled into new clothes, intensify fashion’s social and environmental problems. It is difficult to provide exact figures, but it is estimated that between 80 and 150 billion garments are produced every year. To further highlight the issue around lack of accurate figures, 75% of brands do not disclose the quantity of products they produce annually.

model, only 23% of companies disclose how they invest in circular solutions that enable the recycling of their clothes.

To fight greenwashing, brands need to be more transparent and provide quality data about their products and services

Only 10% of brands publish the results of their suppliers’ wastewater tests, despite the impact of the textile industry on water pollution

Brazil has 12% of the planet’s surface fresh water, but 39.2 million people have no access to drinking water and 99.7 million have no sewage collection (48% of the population). In addition, it is estimated that a volume of 24 billion litres of sewage

Most

It is impossible to talk about a more sustainable fashion industry without addressing the issue of overproduction,

In addition to the lack of transparency on the quantity of produced garments, there is also a lack of data on the quantity of generated waste. Among the brands reviewed, 82% do not disclose the amount of pre-production waste (offcuts, scraps, yarn, end-of-roll fabrics) produced within a year and 88% do not publish the amount of post-production waste (overstock, samples, defective garments) generated in this time interval.

Without the public disclosure of data, it is impossible to precisely measure the size of the problem, making it more difficult to demand effective measures from companies to solve the problems of overproduction and waste generation. The fashion industry needs to act collaboratively to make production models circular. Despite the need to move away from a linear to a circular production

The lack of transparency causes brands to lose credibility with their consumers and the general public. According to a study by Edelman, approximately 6 in 10 people say their default tendency is to distrust a piece of information until they see evidence to prove its reliability. Despite this, less than 30% of the brands reviewed disclose information about the tool they use to define a material as sustainable in their collections. When communicating on the sustainability of their products, it is essential that companies present real data, contextualised in an appropriate and careful manner, in order to avoid the suspicion of greenwashing.

In recent years, several brands and business groups that have acquired clothing resale platforms or have included take-back schemes in their shops. Among the 60 brands reviewed, 23% disclose how they make permanent take-back schemes for recycling/reuse at their selling locations. In this regard, 22% publish whether they offer new business

brands are not transparent about the quantity of clothing they produce and the waste that is generated by their production processes

models that support longevity and reduce the consumption of new clothes - such as rental and resale services.

It is important to note that, to ensure the effectiveness of these systems, the clothes need to have a minimum quality standard that allows them to be recycled or resold. Brands also need to be transparent about the destination of the garments they collect so that the responsibility for the generated waste is not outsourced to the consumer or sent to other regions of the planet. Without such transparency, these initiatives may be perceived as cases of greenwashing by the industry.

As some of the largest and most powerful brands in the Brazilian clothing industry, the way brands reviewed in this Index operate end up causing a significant negative impact on human rights and environmental protection. Moreover, these brands have the responsibility to generate positive and transformative changes, directly proportional to their financial capacity. For these positive changes to happen, it is necessary that the executive level implements corporate governance processes aligned with sustainability principles, such as the Sustainable Development Goals proposed by the UN and the guidelines of the Brazilian Institute of Corporate Governance (IBGC).

Although people increasingly care about how companies’ leaderships position themselves on social and environmental issues, there is a lack of transparency by the brands reviewed on how governance, human rights, and environmental issues relate to each other. Just over 70% of the brands reviewed do not disclose information about the direct contact of their board members responsible for human rights and environment issues or how board-level accountability is implemented in practice.

Moreover, only a quarter of brands disclose how executive incentives, such as bonuses and profit sharing, are linked to improvements in socio-environmental management. This number is even lower when looking at the percentage

of board remuneration linked to social and environmental targets, with only 12% disclosing this information. We must demand greater transparency and accountability from the leadership of the fashion industry’s largest corporations and those driving environmental and human rights issues globally.

of the workforce in Brazil are female. That women represent the majority of workers in fashion is a well-known fact, but most of this industry’s power and profits remain out of their reach.

13%

According to a study by UNOPS, UN Women, the Public Labour Prosecutions Office (MPT) and Tewá 225, women are the ones who suffer the most from the precariousness and informality of the garment sector. They are exposed to lower wages, lack of access to health policies and services, double or triple working hours as well as impacts on personal decisions, such as the full exercise of motherhood. There are also cases of gender -based violence and sexual harassment, both at home and at work. In Brazil, this issue is intensified by the fact that many female workers are also immigrants and refugees, thus facing other rights violations associated with these challenges.

The fashion industry needs women to work: Approximately 80% of the world’s garment workers and over 60%

Our findings this year show that disclosure by major brands on key gender issues in their supply chains is still low. Among the companies reviewed, 27% publish the gender breakdown of workers at direct suppliers’ facilities; 17% at processing facilities; and only 2% at raw material suppliers. In addition, despite the recommended presence of women (including women’s organisations and gender experts) in the consultations for human rights due diligence processes, only 3% of brands report carrying out this practice.

Little transparency on how the companies’ leadership deals with social and environmental issues

The fashion industry remains dependent on female labour, but a large proportion of brands (90%) do not disclose the data on the labour violations against women at their supplier facilities

of brands disclose maternity rights and parental leave policy for its suppliers

As evidenced by the study by FGV’s Centre for Human Rights and Business and by the analysis of this year’s Index, companies tend to adopt more inclusion actions aimed at their own female employees, so migrant women along the production chain remain a distant public, despite their fundamental role in the garment sector. While 22% of the brands disclose programmes for career development and promotion of opportunities for women in the company itself – an already low number – only 5% disclose their actions focused on the promotion of gender equality in their suppliers’ facilities.

Companies must take responsibility and propose solutions to address the barriers faced by women, including the lack of representation in higher hierarchical levels, both in their own facilities and in those of their suppliers. The imbalance of power between men and women is one of the biggest challenges companies face regarding gender equality, including in the fashion industry. It is important that brands act to fix this imbalance and protect the rights of the women who make our clothes – from those at the beginning of the value chain to the leadership levels of the businesses.

Brands are not very transparent on racial equality indicators and evidence shows that most of them are still at the beginning of their journey to tackle racism in their operations

Over the past few years, there were several news reporting racist attacks suffered by black people in major brand stores in Brazil, some of which are reviewed in this Index. This raises a number of questions about how racial issues are addressed within the companies. Although brands are increasingly speaking out for race and ethnic equality, there is still little data on how this inequality is addressed in companies’ operations and their supply chains.

Among the brands reviewed, 32% disclose actions focused on promoting racial equality among their employees - a growth of 8 percentage points compared to 2021. This figure decreases to 7% regarding the dissemination of career development programmes aimed at reducing race inequality and promoting growth opportunities. This may be an sign that brands are still at the beginning of their anti-racist journeys.

Another point that shows that most brands are still starting to integrate racial equality into their business model is the fact that only 15% publish the breakdown of job roles by ethnicity, of their employees. The lack of transparency on the workers’ breakdown makes it difficult to take effective action to reduce inequalities and to monitor the progress of the implemented initiatives.

Race and ethnic equality also need to be present in the brands’ supply chain, where the most precarious workers are

usually found. Only 2% of the brands publish the existence of actions focused on the promotion of race and ethnic equality in the suppliers’ facilities.

workers in their supply chain, a figure typically higher than the minimum wage. In addition, 98% of brands do not publish their annual progress towards paying living wages across the supply chain nor how much supplier workers are paid above the minimum wage.

97%

of brands don'ts disclose the % above the minimum wage workers are paid in the supply chain

No brand discloses the use of methods for ring-fencing labour costs – such as wages, overtime, social charges, sick leave, holidays and licences – in the payment terms negotiated with its suppliers. This purchasing practice is an important indicator of how brands consider labour costs in their negotiations with suppliers.

No brand discloses how many workers in its supply chain receive living wage

A large proportion of workers in the garment industry are not paid enough to secure a decent standard of living with access to food, water, housing, education, health, transport, clothing and savings for unexpected events. Meanwhile, the brands reviewed in this Index are among those with the highest revenues and some of their owners and executives are among the richest people in the world and Brazil.

Only 8% of companies disclose their approach to ensuring a wage capable of covering the basic living costs of

The sections with indicators on purchasing practices and living wages payments have had very low scores since their inclusion in the Brazilian Index. The high level of opacity surrounding these issues is worrying and may be a strong indication of the industry’s lack of commitment on this matter, highlighting that voluntary measures alone are failing to drive progress.

Due to the impact of the COVID-19 pandemic, there was an increased focus from society on how brands commercially relate with their suppliers, i.e. their purchasing practices in the supply chain. Studies and reports have highlighted the precarious working conditions and reduced prices paid per garment item in Brazil and in the world, globally. Campaigns such as #PayUp

and #PayYourWorkers have contributed to increased awareness and greater understanding of the power that brands wield over their suppliers, demanding the payment of the amounts owed.

Greater transparency on how brands interact with their suppliers can be the first step towards eliminating damaging negotiations and promoting fair purchasing practices. However, the findings of this year’s Index demonstrate how that first step has yet to be taken by a large proportion of brands. For example, only 17% of brands disclose their supplier payment policies with stipulated maximum terms (e.g. 30 days, 60 days etc). In addition, only 2% disclose a policy on what percentage of orders are normally paid in advance to suppliers before they start production in order to cover pre-production costs, such as those for purchasing raw materials and other inputs.

The lack of transparency about payment terms is particularly striking, as it is common for consumers to wear their new clothes before the suppliers who made them have even been paid. Poor performance on transparency on these issues is a missed opportunity for brands to demonstrate that they have serious and fair approaches in place when negotiating with their suppliers.

Although slavery was formally eradicated in Brazil more than 130 years ago, in practice, unfortunately, it is still occurring. According to data from the Observatory for the Eradication of Slavery and Trafficking in Persons, almost 60,000 workers have been rescued in situations analogous to slavery in Brazil since 1995. Fashion is one of the industries in which this practice still happens. In São Paulo, for example, of the 139 people rescued in 2019, 43 were women working in sewing workshops. In the capital of São Paulo, the textile sector is one of the sectors that receives the most complaints about modern slavery.

Despite this, only 22% of brands publish data on the prevalence of modern slavery-related violations or the existence of risk factors such as excessive and forced overtime, restricted freedom of movement, retention of workers’ passports or other personal documents, withholding of wages, debt bondage or complaints related to recruitment practices.

A necessary measure to assess the risks of forced labour is to verify the existence of recruitment fees paid by workers. However, most brands (93%) do not disclose the number of workers in their supply chain affected by the payment of these fees or other related costs. This lack of transparency raises the question of whether companies are tracking this information and choosing not to disclose it or whether their due diligence approaches are not robust enough to monitor such practices.

important to remember that many of the reviewed brands in this Index also have suppliers in other countries. In some of these places, it is impossible, difficult and/or unsafe for workers to organise in unions and defend their rights.

Almost half of the brands reviewed (48%) publish a policy describing their commitment to freedom of association, the right to organise and collective bargaining at the supply chain level. However, the disclosure drops to 32% when looking at how this policy is put into action. It decreases even more, to 18%, when we analyse the disclosure of existing trade unions or other types of workers’ independent committees on the premises of the direct suppliers listed by brands. In addition, no brand disclosed the number of collective bargaining agreements that provide the payment of wages higher than those required by the local legislation for workers in their supply chain.

Organising and collective bargaining are vital tools for workers and are often the only means for them to obtain better working conditions and wage increases. Amidst the repression of union leaders and workers organising collectively, as reported in the Myanmar Case Study on page 61, it is important that brands live up to their commitments to the freedom of association expressed in their policies.

Although freedom of association is a common practice for Brazilian companies and guaranteed by labour legislation, it is

Modern slavery still happens in the fashion industry, but there is little transparency from brands on this issue

Almost half of the brands (48%) have policies on freedom of association for their suppliers’ workers, but transparency on this issue decreases as we search for more detailed information

93%

of brands don't disclose the number of workers in the supply chain affected by the payment of recruitment fees

processes

Among the 60 brands reviewed, 82% do not publicly disclose their human rights or environmental due diligence processes. These processes are necessary for brands to track, prevent and mitigate the potential social and environmental risks in their operations and supply chains. It is a continuous procedure that involves several stages: evaluation of the risks and impacts, integration of the actions to prevent and control the risks and impacts in the business management as well as monitoring of the actions adopted and communication to the internal and external public about what was done.

Thus, the existence of a due diligence process is closely linked to the progress of corporate transparency. We hope that, in future editions of the Index, more brands will disclose a description of their due diligence processes, how impacted stakeholders are involved in the formulation of these processes and the outcomes of the steps taken on identified violations.

Use the Index findings to promote your activism and not as an incentive for consumption

We have seen the growing debate on transparency in fashion companies and we know that the Fashion Transparency Index has been influencing several brands to share more relevant information about their own operations and their supply chains as well as increase their level of transparency year by year. Despite this, the current trajectory of the fashion industry is still far from positive, as evidenced throughout this report.

In a year of important political decisions in Brazil, all the topics covered in the Index only reinforce the relevance of the collective discussion about the fashion industry. For most of the reviewed topics, voluntary disclosure does not seem to be effective in keeping up with the speed of the sector’s negative impacts. Fashion is nature, fashion is culture, fashion is women, fashion is its workers and fashion is politics. For the important systemic change we seek, collaboration and participation of all stakeholders is indispensable. This includes brands, NGOs, workers, citizens and our representatives at all levels of government.

Our invitation to you in reading this report is: Use these findings to educate yourself and collectively raise your voice, thereby encouraging large brands and retailers to be more transparent and accountable, publicly accounting for their impact and what real changes they are making. Use this information to monitor our politicians, demanding better social and environmental laws and regulations for the fashion industry. Use this data to create research, initiatives and projects that seek systemic change in fashion. To read more about what you can do with these findings – whether you are an individual, brand or retailer, investor, NGO or trade union – please see the Final Thoughts & Recommendations on this report.

Aruna Kashyap, Associate Director (Corporate Accountability),

Economic Justice and Rights Division, Human Rights Watch

Most brands still do not disclose any information on their human rights and environmental due diligence

"Transparency needs to be the cornerstone of any serious effort by brands to build a supply chain free from human rights abuses."

ABOUT THIS INDEX

THE CHANGES WE WANT TO SEE

A systemic overhaul of the global fashion industry

At Fashion Revolution, we campaign for a fashion industry that conserves and restores the environment, valuing people and nature over growth and profit. To achieve this, we are working towards an industry-wide culture of transparency and accountability across the value chain; a global fashion industry where brands take responsibility for their social and environmental impacts. The Fashion Transparency Index is one tool used to achieve this vision, and feeds into our manifesto point #8.

#8

Fashion is transparent and accountable. Fashion embraces clarity and does not hide behind complexity nor rely upon trade secrets to derive value. Anyone, anywhere can find out how, where, by whom and under what conditions their clothing is made.

See our "Manifesto for a Fashion Revolution" here.

OUR ROLE WITHIN AND OUTSIDE THE INDUSTRY

Fashion Revolution is uniquely positioned both ‘within’ and ‘outside’ the fashion industry. We work to achieve change in three main ways: policy change, cultural change, and industry change.

Working ‘within’ the system means engaging in a system that is deeply unsustainable, extractive, and unjust. However, engaging within a system we disagree with is not to condone it. Quite the opposite, actually. That is, by engaging with it, we attempt to fundamentally disrupt and dismantle the structures that uphold injustice and exploitation in the industry supply chains.

We engage within this unjust system because doing so is effective in driving change, although it can sometimes be frustratingly slow. To achieve transparency and accountability across the industry, we need to engage the industry's biggest players, such as brands and retailers reviewed in this Index. These are the companies responsible for the biggest negative impacts and, therefore, have the greatest responsibility to address and change the problems they have caused and continue to perpetuate.

We see industry change as working 'within' the system, while cultural and political changes as work 'outside' the system, where we focus on educating and mobilising citizens as well as advocating for policy changes in government and legislation. Transparency is fundamental to achieving all these changes.

Learn more about how we work by clicking here.

THE ROLE OF TRANSPARENCY IN ACHIEVING CHANGE

Transparency is fundamental to achieving all the changes that Fashion Revolution is working towards - in policy, in culture and in the industry.

The public disclosure of credible, comprehensive, and comparable information about fashion’s supply chains enables investors, lawmakers, journalists, NGOs, trade unions, workers, and their representatives to hold brands and retailers accountable. This transparency enables such actors to:

• Scrutinising what companies say they are doing to uphold human rights and to protect the environment.

• Holding brands and retailers accountable for their policies and practices, which is especially important when things go wrong, like they did when Rana Plaza Building collapsed, in Bangladesh in 2013.

• Collaborating to cease, mitigate, prevent and remedy environmental and human rights abuses.

• Collaborating to share strategies and best practice on these issues.

Transparency is not to be confused with sustainability, but without transparency, achieving a sustainable, accountable, and fair fashion industry will be impossible.

We see transparency as a tool for change, not the end goal. Transparency alone will not solve all of the complex and deeply systemic problems in the global fashion industry. However, it is a baseline, without which we cannot meaningfully move towards real improvements. Shining a light on the places and conditions in which our clothes are being made allows for faster and more collaborative ways to solve these problems.

Fortunately, we are not alone in calling for transparency. We are one voice of many across civil society, including NGOs and trade unions representing supply chain workers, as shown in this letter published in April 2021 and signed by 33 global NGOs, including Fashion Revolution. This letter calls for full supply chain transparency in the clothing sector:

“The time for full supply chain transparency is now. As civil society organisations, we call upon all clothing brands and retailers to disclose all the facilities in their supply chain. We welcome the steps taken by those companies who are already disclosing part of their supply chain and encourage them to accelerate their progress towards full transparency. We ask regulators to provide for a level playing field, by setting harmonised legislation for such public disclosure and to ensure every clothing brand commits to the same level of transparency.”

transparency scrutiny accountability change

ROLE & AIMS OF THE FASHION TRANSPARENCY INDEX

The Fashion Transparency Index was created to:

• Incentivise major brands and retailers to disclose a greater level of detailed and comparable data and information year-on-year.

• Analyse trends and compare the level of transparency on human rights and environmental issues among the world’s largest and most influential fashion brands and retailers.

• Create a tool that helps a wide set of stakeholders to better understand what data and information is being disclosed by the world’s largest brands and use the findings to take further action.

• Shape our ongoing efforts to raise public awareness and educate people about the social and environmental challenges facing the global fashion industry, using this research to inform people’s activism.

We have heard from many people in our community who feel frustrated by the speed of change in the fashion industry. Given the climate emergency and persistence of human rights abuses in the industry, many people are crying out for urgent and systemic transformation now. We hear you, and we share your frustrations. This is why we have made some notable changes to the methodology in 2021, moving focus from policies and commitments to implementation and outcomes. See more details about this change in Methodology & Scope of the Research.

For the time being, while so much of the global fashion industry remains opaque and abuses go unseen, driving transparency is absolutely necessary. And we believe the Fashion Transparency Index has a pivotal role to play. We hope that in the near future, campaigning for transparency will no longer be needed as the industry moves beyond transparency to other crucial actions.

THE

“Fighting the climate emergency, fighting for the preservation of the Amazon, promoting the cultures of traditional peoples, among countless other current and so urgent causes, are intrinsically connected to the fashion industry. Therefore, fashion, which has always reflected society, urgently needs to take responsibility in favor of rapid and effective change. I believe that transparency is the path that will enable the reconstruction of the sector so that it is, in fact, aligned with people and nature, and thus, lead us to a desirable future.”

Fernanda Simon, Executive Director of Fashion Revolution Brasil

HOW THE FASHION TRANSPARENCY INDEX DRIVES CHANGE

The Fashion Transparency Index has driven change in large part by helping to normalise the concept of transparency within the industry and make public disclosure of social and environmental efforts more commonplace. For brands that have been reviewed year-on-year since 2017, and in Brazil since 2018, we have seen their average scores progressively increase.

When we started this research in Brazil in 2018, very few brands were disclosing Tier 1 supplier lists. In 2018, there was only 25%, or 5 out of 20 brands. While in 2022, this number grew to 33%, or 20 brands out of the 60 reviewed. Furthermore, when considering these 20 brands reviewed since 2018, we see their average score in the traceability section has increased progressively over the years. In 2022, their average in this section is 34%, compared to the overall average of 18% obtained by the total of the 60 brands reviewed.

This demonstrates an important change in behaviour in the industry. Despite being a slow and gradual change, it is

happening due to strong pressure for more transparency, also supported by allied organisations.

We have also forged partnerships with different organisations. These partnerships not only help push harder for increased transparency, but also enable the Index methodology and research to be used more widely, putting the findings into tangible action.

For example, our partnership with WikiRate enables the data we collect, both from the Global and from the Brazil Indexes, about brands to be freely accessible, easily comparable, machine readable, and, above all, actionable for different stakeholders. This data was also added to Clean Clothes Campaign's FashionChecker.org, which compares Brazilian and global brands’ claims about living wages to workers’ wage slips. This is valuable to investors and civil society organisations, including trade unions that represent garment workers, which make use of transparency data.

The Index findings have been integrated into the Business & Human Rights Resource Centre’s and platform Matter, both used by investors who are increasingly incorporating Fashion Transparency Index data into their ESG scoring of investee companies. Parts of the methodology and research have been integrated into the Good On You app used by ethically-minded consumers.

these 5 years, the Fashion Transparency Index Brazil boosted the discussion about transparency within major fashion brands in the country. I feel that, today, the theme is seen as a necessary step towards the fashion industry we want. However, to achieve a fair, clean, ethical and responsible fashion, brands

Isabella Luglio, Coordinator of the Fashion Transparency Index Brazil

“During

need to be more audacious, taking into account issues that were ignored for a long time, such as overproduction and the payment of living wages across the supply chain."

METHODOLOGY AND SCOPE OF THE RESEARCH

HOW BRANDS AND RETAILERS ARE SELECTED

Fashion Revolution Brasil and ABC Associados jointly agreed and selected 60 brands1 to be reviewed for the fifth edition of the Fashion Transparency Index Brazil. We understand that the size of the sample of brands selected is not enough to represent the Brazilian fashion market as a whole. Therefore, we tried to select brands from different segments to address the diversity of the industry. The selected brands covered the following markets/ segments: retailers; denim, casual wear; footwear; sportswear, beachwear; underwear; and childrenswear.

Brands and retailers were selected based on three main factors:

• Annual turnover;

• Spread of market segments;

• The position as top of mind2.

Regarding turnover, we reviewed publicly disclosed information about the financial performance of brands and retailers on their websites. In the case of private companies that do not disclose their financial performance, we relied on third-party publications, widely available nationally and internationally, that presented their revenue and turnover estimates.

When the information found concerned a parent company that controls different brands, we selected the brand (or brands) identified as the most significant in terms of turnover and brand recognition. We have purposely listed brands and not the parent companies because the public will be most familiar with the brands.

The 50 brands and retailers reviewed in 2021 remained in this edition, and we added another 10 to them. The Colombo brand, analyzed in 2020, was excluded from the analysis in 2021 because it no longer met the aforementioned selection criteria.

1. We may only use the term “brands” to indicate brands and retailers.

2. Top of mind is a term used to qualify brands that are the most popular among consumers.

This year, 48% of the brands took part in the second phase of the review process by returning a completed questionnaire. Brands are included in the Index whether they returned the completed questionnaires or not. We treat every brand the same regardless of whether they choose to participate. However, brands that participate in this second phase typically receive higher scores because they are able to identify relevant disclosure information that our researchers may have missed in their initial research.

"Truly sustainable development includes people and improves their lives, while also caring for the environment and respecting end consumers. These are key elements in building a different society"

Nelsa Nespolo, President and Director of Justa Trama

WHAT DOES BRAND PARTICIPATION MEAN?

Fashion Revolution contacts all brands each year at the beginning of the Fashion Transparency Index research cycle. At this stage, we inform them of the updates in the methodology and invite them to participate, asking them to reply with their interest or to decline.

Participation means brands will review their pre-populated questionnaires to fill in any gaps that the Fashion Revolution research team may have missed in the initial review, as brands know their policies and websites better than we do.

Fashion Transparency Index reviews the evidence added by the brands in line with the project's methodology and leave comments in the questionnaire template, justifying whether or not responses are accepted. This is one of the value- add of participation.

Generally speaking, brands who participate receive higher scores year-onyear because the Fashion Transparency Index research team is able to push them to disclose more information in line with industry best practice. If we only analyze the 29 brands that participated this year, their overall average score in the Index was 32%. On the other side, the overall average score of the group of 31 companies that declined or did not respond to the research was 3%.

Participation allows brands to constantly review and plan their publications, meeting the questionnaire indicators and good market practices, thus increasing the transparency of their business.

THE 60 BRANDS SELECTED

Adidas (Adidas Group)

Amaro •

Animale (Grupo Soma) •

Aramis •

Arezzo (Arezzo&Co) •

Besni

Brooksfield (Grupo Via Veneto)

Caedu

Carmen Steffens (Carmen Steffens)

C&A •

Centauro (Grupo SBF)

Cia. Marítima (Grupo Rosset)

Colcci (AMC Têxtil)

Dafiti (GFG LatAm) •

Dakota (Universo Dakota)

Decathlon (Association Familiale Mulliez)

DeMillus • Di Santinni

Dumond (Grupo Paquetá)

Ellus (InBrands) •

Farm (Grupo Soma) •

Fórum (AMC Têxtil)

Gabriela (Studio Z)

Havaianas (Alpargatas) • Havan

Hering (Grupo Soma) •

Hope (Grupo Hope) •

Ipanema (Grendene) • John John (Restoque) • Klin

Kyly (Grupo Kyly)

Le Lis Blanc Deux (Restoque) • Leader

Lojas Avenida (Grupo Avenida)

Lojas Pompéia (Grupo Lins Ferrão)

Lupo • Malwee (Grupo Malwee) • Marisa •

Marisol (Marisol S.A.)

Melissa (Grendene) •

Moleca (Calçados Beira Rio S. A.)

Netshoes (Magazine Luiza)

Nike (Grupo SBF)

Olympikus (Vulcabrás)

Osklen •

• = brands that completed the questionnaire

Penalty (Grupo Cambuci)

Pernambucanas • Puket

Renner (Lojas Renner S.A.) •

Reserva (Arezzo&Co) •

Riachuelo (Grupo Guararapes) •

Sawary Shein

Shoulder • TNG Torra

Track & Field •

Trifil (Lupo - Scalina S/A) •

Youcom (Lojas Renner S.A.) • Zara (Inditex) •

THE SCOPE OF THE RESEARCH

The Fashion Transparency Index ranks the largest brands and retailers according to the amount of information publicly available on their social and environmental impacts throughout their supply chain and their own operations. We have deliberately chosen to focus on transparency by means of public disclosure. If the information and data disclosed by brands is publicly available, detailed and specific enough, it can be used by multiple stakeholders – including worker representatives, environmental groups, investors, consumers and brands themselves – to drive positive change on human rights and environmental issues.

As public disclosure drives public accountability, limited and inwardfacing disclosure aimed only at specific stakeholders limits the scope for transformative, positive impact. For this reason, the Index purposely excludes everything that brands and retailers may be doing internally and behindthe-scenes across their companies and supply chains. This is why we are looking for public disclosure not only on brands’ policies, procedures and governance, which are less risky to share, but also meaningful disclosure of results, progress, outcomes and impacts across the business and its value chain.

It is important to highlight that the Fashion Transparency Index is not a shopping guide. We do not recommend or endorse any of the brands and retailers reviewed, regardless of their scores. The aim is to understand the amount of information about social and environmental aspects are shared by the largest brands in Brazil, so we can push for greater public disclosure of this information and use it to hold them accountable, when needed.

The information / data should be publicly available from one of the following places:

On the brand/retailer website;

On parent company website (provided there is a direct web link to it from the main brand website);

Investors reports or Sustainability/ CSR websites (provided there is a direct web link to it from the main brand website);

In annual reports on sustainability or social responsibility published by the brand (provided there is a direct link to it from the main brand website and is dated January 2019 or later);

In any other documents which are publicly available and can be downloaded freely from the brand/retailer's website(s);

On third party websites when there is a direct link from the brand website.

We do not count the following information sources:

Clothing labels and hang tags on products;

In-store or at other physical locations; Smartphone apps;

Social media channels;

Third party websites or documents where there is no weblink from the brand’s own website, including press articles;

Downloadable documents where the weblink cannot be found on the brand’s website.

ABOUT THE RESEARCH PROCESS

August – November 2021

Global methodology updates: industry research and stakeholder consultation process for annual review of the methodology, including adjustments and inclusion of new indicators, when needed, as well as selection of new topics for the Spotlight Issues section.

February - March 2022

Brazilian methodology updates: annual review, considering the adjustments made in the global methodology and the need for specific adaptations to the Brazilian context. Selection of the new companies to be included in the research.

July-August 2022

Final review of the questionnaires: after approximately one month, brands return the completed questionnaires. Our research team reviews each indicator and awards additional points, provided that the new information presents enough evidence for what we are looking for. The Brazilian and global teams conduct several rounds of peer review data quality assurance checks before finalising each brand's score.

June 2022

Brands receive questionnaires to complete: brands are invited to complete the questionnaires with data that our research team might not have found and/or with more up-to-date public information.

April-May 2022

Research and engagement with the selected brands and retailers: the research team reviews each brand and pre-populates their Index questionnaire with all the public information found. A review round is then carried out to verify the accuracy of the answers found. In parallel, two meetings are held with the brand representatives to present the initiative, promote reflections on the importance of greater transparency for the sector and detail the methodology and process of analysis of the Index.

September-November 2022

Data is compiled, analysis completed and report prepared: Data from all brand questionnaires is transferred to a joint-analysis tool for the complete dataset. This dataset is the baseline for creating this final report.

End of November 2022

Fashion Transparency Index Brazil is released

ABOUT THE METHODOLOGY

The Fashion Transparency Index reviews brands’ public disclosure across 5 key areas:

SPOTLIGHT ISSUES

Which this year covers:

• Decent work, covering combating forced and bonded labour, living wages, purchasing practices, unionisation, and collective bargaining

• Gender and racial equality

• Sustainable sourcing and materials

• Overconsumption, waste and circularity

• Water and chemicals

• Climate change and biodiversity

Brazilian questionnaire

The 2022 Index covers 252 individual indicators across 60 brands, comprising 15,120 data points. For more details, visit this link to view the 2022 Brand Questionnaire template sent to companies in Brazil.

Changing Markets Foundation

“Transparency is not just about bombarding the public with information, but it is about presenting this information in such a way that information can be easily found and understood, and if necessary, challenged... Pages filled with rhetoric and empty words hide a lack of accessibility to scrutiny and the necessary level of detail.”

METHODOLOGY ADVISORY COMMITTEE

The methodology was designed in 2017 through a four-month consultative process. We had contributions from a variety of industry experts and stakeholders from academia, the trade union movement, civil society organisations, socially responsible investment, business consulting and journalism. This year we have made significant updates to the methodology in consultation with our advisory committee, which included more than 20 experts and organisations, such as:

Dr Mark Anner, Associate Professor & Director of the Center for Global Workers’ Rights at Penn State University

Eloisa Artuso, Co founder of Instituto Fashion Revolution Brasil and Instituto FEBRE

Neil Brown, Head of Equities at GIB Asset Management

Maddy Cobbing, Detox My Fashion Campaign at Greenpeace

Gary Cook, Global Climate Campaigns Director at Stand.earth

Subindu Garkhel, Cotton and Textiles Lead at The Fairtrade Foundation

Fiona Gooch, Senior Private Sector Policy Advisor at Traidcraft Exchange

Christina Hajagos-Clausen, Textile and Garment Industry Director at IndustriALL Global Union

Kristian Hardiman, Head of Ratings at Good On You

Aruna Kashyap, Associate Director (Corporate Accountability), Economic Justice and Rights Division, Human Rights Watch

Kate Larsen, Business & Human Rights Consultant

Hester Le Roux, Senior Economic Advisor, Policy & Advocacy at CARE International

Emily MacIntosh, Policy Officer for Textiles at European Environmental Bureau

Maya Rommwatt, Fashion Climate Campaigner at Stand.earth

Francois Souchet, Make Fashion Circular Lead at Ellen MacArthur Foundation

Joe Sutcliffe, Senior Advisor, Dignified Work at CARE International

Urksa Trunk, Campaign advisor at Changing Markets

Ben Vanpeperstraete, Supply Chain Consultant

Frank Michel, Executive Director at ZDHC Klaas Nuttbohm, Implementation Director at ZDHC

Olivia Windham Stewart, Business and Human Rights Specialist

Katie Shaw, Chief Programme Officer at Open Supply Hub

Pauline Op De Beeck, Head of Sales, Europe – Apparel Sector Lead

Laura Balmond, Lead at Make Fashion Circular, Ellen Macarthur Foundation

Anna Bryher, Director of Advocacy, Labour Behind the Label

Chloe Rollscane, Researcher, Canopy Global

Holly Syrett, Global Fashion Agenda

We have also strived to align the methodology, so far as possible, with existing international standards and frameworks such as Global Reporting Initiative (GRI), Open Data Standard, UN Guiding Principles, Sustainable Development Goals (SDGs), OECD Due Diligence Guidelines and the relevant International Labour Organization (ILO) conventions, as well as other industry initiatives including Act on Living Wages, Corporate Human Rights Benchmark, Know The Chain, Transparency Pledge, and several others. We also collaborate to share research with other benchmarks through our partnership with the open research platform Wikirate.

ABOUT THE ANNUAL REVIEW OF THE INDEX ADAPTING THE METHODOLOGY TO THE BRAZILIAN CONTEXT

This year, we added an additional 24 indicators compared to last year. The weighting of the scores1 is designed to incentivise detailed, granular public disclosure. The intention is to put the greatest emphasis on results, outcomes, impacts and the most actionable data that can be used by external stakeholders to hold brands to account.

In the Spotlight Issues section, the indicators on Covid-19 Response have been removed. Although Covid-19 and its impacts are still being felt by society, we chose to focus the points available on other vulnerable topics in the sector, such as purchasing practices and due diligence. In addition, as we have done over the years, we have added and improved the wording in some indicators for clarity and to align with best practice.

1. Check out more information on Weighting of the scores

For the first edition of the Fashion Transparency Index Brazil in 2018, Fashion Revolution Brazil established a technical partnership with FGVces (Centre for Sustainability Studies at Getulio Vargas) for adapting the methodology to the Brazilian context and conducting the research.

On that occasion, we consulted different experts from the Brazilian industry for our research. We defined that it would be important to address issues related to race equality and to the working conditions of foreign migrant workers in the supply chain. 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.

Since 2019, we carried on reviewing the questionnaire's content and structure with the same technical partner team, which now operates by ABC Associados consultancy. Similarly to 2018, this team has supported us in the stages of identifying and reviewing the brands presented in this Index.

It is possible to see differences in the final scores of the brands included in both global and Brazil Indices. These differences may occur due to the period of the year in which the survey was conducted for each report, the variation of indicators according to the local context as well as the fact that global brands are controlled by different groups in Brazil and worldwide. Each review used the latest available information at the time it was performed.

LIMITATIONS OF THE RESEARCH HOW WE CALCULATE THE FINDINGS

• The survey relies on the available information within a certain time frame, and brands and retailers may withdraw or disclose new information at any time. Data is only as current as of August 31st, 2022.

• Changes to the methodology in 2021 and 2022 may affect yearon-year comparability of the results, so please make annual comparisons with that in mind.

• Desk-based research means that human error is a possibility. Although our research team is committed to conducting the review in the most complete, accurate and impartial manner possible, there is the possibility of errors.

• We are confident that the methodology is comprehensive and robust when it comes to the public disclosure of information by major brands. However, we acknowledge that it can always be improved and, therefore, we welcome your comments or feedback on how to make it even better. You can email us at: educacional. brasil@fashionrevolution.org.

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

The questionnaire awards a total of 250 points. To calculate the total score for each brand, we add the score awarded to the brand for the 5 different sections. Each section has the following maximum scores:

• Section 1 is worth 33 points

• Section 2 is worth 11 points

• Section 3 is worth 72 points

• Section 4 is worth 52 points

• Section 5 is worth 82 points

and 45% in the next, we are usually reporting that the brand increased by 15 percentage points (45-30=15) rather than saying the brand increased by a 50% its performance (45/30=1.5).

Where a score may have been rounded to the nearest percentage point in previous editions, we are calculating the yearon-year difference according to the rounded figures rather than to the exact decimal points. For example, where the average score in a particular section is 17.74%, we have rounded this up to 18%.

If in a previous year’s report the average score in that section was 12.41%, we rounded it down to 12% in the report. Therefore, the year-on-year difference is technically 5.33 percentage points, but if we go by the nearest rounded figures it is 6 percentage points.

• Verification of brands’ claims are beyond the scope of this research. The Fashion Transparency Index does not provide a detailed review of content, quality, or precision of brands’ policies, procedures, performance, and progress in any particular area. Therefore, we encourage other stakeholders and experts to access and evaluate the information found.

The overall average score across all 60 brands is calculated by each brand’s individual final score.

For the most part, year-on-year differences in scores are described as the change in percentage points, which means the actual amount of change, rather than the percent, which means the rate of change (unless explicitly stated otherwise). For instance, if a brand scored 30% in one year

WEIGHTING OF THE SCORES

1. 2. 3. 4. 5.

POLICY & COMMITMENTS

This section explores brands’ human rights and environmental policies for both their own employees and workers in their supply chain, how these policies are implemented, if brands have relevant goals and targets in place and if brands are reporting annual progress against these targets. Since 2021, the points available in this section were halved to place more emphasis on outcomes and impacts.

Here we look at who on the executive board has responsibility for human rights and environmental issues, how this is implemented, whether the relevant department can be easily contacted by the public, and how human rights and environmental improvements are linked to employee, CEO and supplier performance. This year we also looked to see whether there is worker representation on the board.

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

KNOW, SHOW & FIX SPOTLIGHT ISSUES

Here we review what brands disclose about their due diligence processes regarding human rights and environmental issues, with the respective results, what the company is doing to remedy any problems identified in these processes, how it assesses the implementation of its policies in their supply chain, and how it ensures that human rights and environment issues complaints made by their own employees and the supply chain workers are heard and addressed.

In this final section, we look at what brands are doing to deal with issues such as combating forced and bonded labour, gender and race equality, living wages, purchasing practices, unionisation, overproduction, waste and circularity, sustainable materials, water and chemical usage, deforestation and climate change.

A GUIDE TO THE FINAL SCORING

We have intentionally grouped brands in percentage ranges so readers can focus on the emerging patterns and trends for disclosing information by the companies rather than focusing on their individual scores.

Brands scoring between 0-5% are disclosing nothing at all or a very limited number of policies, which tend to be related to the brand’s hiring practices or local community engagement activities.

Brands scoring between 6-10% are likely to be publishing some policies for both their employees and suppliers. Those closer to 10% are more likely to be publishing a basic supplier code of conduct, some information about their procedures and limited information about their supplier assessment process.

Brands scoring between 11-20% are likely to be publishing many policies for both employees and suppliers, some procedures and some information about their relationship with suppliers. These brands usually disclose a list of first-tier suppliers only but not of other levels nor other more specific aspects, such as those found in the Spotlight Issues section.

Brands scoring between 21-30% are likely to be publishing much more detailed information about their policies, procedures, governance, social and environmental goals and supplier assessment and remediation processes. These brands may be publishing their list of suppliers, mainly first-tier manufacturers, and some information about their grievance channels regarding human rights and environmental issues. These brands are usually not disclosing extensive information about Spotlight Issues.

Brands scoring between 31-40% are typically disclosing their first-tier manufacturers as well as some information on their governance policies. They may also disclose detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes. These brands are also more likely to be disclosing partial information on a few of the Spotlight Issues, such forced and bonded labour, solutions for textile waste, and data on the carbon footprint of their own facilities.

Brands scoring 41-50% are likely to be publishing more detailed first-tier supplier lists and processing facilities as well as some information on supplier assessment findings. In addition, they are usually disclosing their policies, procedures, social and environmental goals, governance, and remediation processes. These brands are also more likely to be addressing some Spotlight Issues, such as collective bargaining, sustainable materials, textile waste, carbon footprint, and water usage in their own facilities.

Brands scoring 51-60% are disclosing all the information already described in the other ranges as well as detailed supplier lists for first-tier manufacturers and processing facilities, with more complete information about their governance practices. These brands are likely to be publishing findings of their supplier assessments, describing their due diligence processes, and addressing many of the Spotlight Issues, such as combating forced and bonded labour, gender and racial equality, sustainable materials, waste and circularity, water and chemicals, and carbon footprint.

Brands scoring 61-70% are disclosing all the information already described in the other ranges and will be publishing detailed supplier lists, which include manufacturers, processing facilities and suppliers of raw materials. These brands will also be providing relatively more information on topics related to the Spotlight Issues section. In 2022, only one brand was ranked in this range.

Brands scoring 71-80% are disclosing all of the information already described in the other ranges and will be publishing detailed supplier lists for at least 95% of all suppliers, from direct manufacturers to processing facilities. These brands will also be publishing detailed information about their due diligence processes and outcomes. They will be sharing comparatively more comprehensive and detailed information and data than other brands in the Index on the Spotlight Issues but still missing significant disclosures on outcomes and impacts. In 2022, only one brand is in this score range.

No brands score above 80% but if they did these brands would be disclosing all of the information already described as well as publishing detailed information about supplier assessment and remediation findings for specific facilities. They would also be sharing detailed supplier lists for at least 95% of all suppliers from manufacturing right down to raw materials. They would also provide broader data on sustainable materials usage, gender and race issues in their supply chains, their purchasing practices, as well as the company’s approach and progress towards living wages for workers in their supply chain. These brands would be disclosing their carbon emissions, use of renewable energy and water footprint from their own operations and across their supply chains - right down to raw material level.

FULL RESULTS

To access the complete dataset, please visit here.

THE FINAL SCORES

CENTAURO ELLUS HOPE OLYMPIKUS SHEIN DAKOTA DEMILLUS DUMOND SHOULDER TORRA PUKET STUDIO Z BESNI BROOKSFIELD CAEDU CARMEN STEFFENS CIA. MARÍTIMA COLCCI DI SANTINNI FÓRUM HAVAN KLIN KYLY LEADER LOJAS AVENIDA LOJAS POMPÉIA MARISOL MOLECA NETSHOES NIKE PENALTY SAWARY TNG TRIFIL

5% 4% 4% 4% 3% 2% 2% 2% 2% 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

TRACK&FIELD LUPO 10% 9% DECATHLON AMARO JOHN JOHN LE LIS BLANC

20% 18% 13% 13%

OSKLEN MARISA ANIMALE FARM

28% 27% 25% 25%

PERNAMBUCANAS RESERVA AREZZO

38% 35% 34%

HERING ZARA RIACHUELO ARAMIS

48% 47% 44% 42%

HAVAIANAS RENNER YOUCOM ADIDAS DAFITI IPANEMA MELISSA

57% 57% 57% 53% 53% 52% 52%

MALWEE 68% C&A 73% * The brands are ranked in numerical order out of a score of 250, but they are shown here as a rounded-up percentage. If any brands have the same score, they are listed in alphabetical order.

QUICK OVERALL FINDINGS

22 brands (37%) did not score any points

Overall average score was 43 (17%) out of 250 points

Only 1 brand scored above 70%

Not a single brand scored above 80%

AVERAGE SCORES ACROSS THE SECTIONS

1. 2. 3. 4. 5. 31% 20% 18% 14% 12%

POLICY & COMMITMENTS GOVERNANCE TRACEABILITY KNOW, SHOW & FIX SPOTLIGHT ISSUES

Brands are once again most transparent about their policies and commitments than other topics.

C&A scored highest in this section at 98%, followed by Adidas and Malwee both at 91%.

This year, there is an increase in the number of brands scoring above 70% in this section, from 7 brands in 2021 to 12 in 2022. Despite this, almost half (48%) of the brands scored in the lowest range (0-10%), and 20 of them scored zero. This means that most brands disclose little or no information on their policies for their own employees and their suppliers as well as their human rights practices or environmental impact goals.

Adidas and Malwee scored highest in this section at 91%, followed by Zara, C&A, Renner and Youcom, with 82% of the available points.

Almost 2/3 of the brands (63%) scored at the lowest range (0-10%). Among these, 32 brands scored zero. This means that most brands do not disclose any information on their governance practices, such as contact details of the responsible department for human rights and environmental issues; data on the member or committee of the board of directors responsible for these issues; or the amount invested by the company in sustainability and corporate responsibility actions.

The highest scores in this section were Havaianas at 97% and C&A at 83%.

Around 63% of brands do not disclose any information about their supplier lists. This section had the biggest drop from the overall average observed last year, from 21% in 2021 to 18% in 2022.

As a methodological note, it is important to highlight that, starting this year, we do not to accept supplier lists without a significant and representative proportion of the brands' total number of suppliers.

Overall, 95% of the brands reviewed scored less than 50% of the available points in this section. Furthermore, almost 2/3 of the brands (62%) scored at the lowest range (0-10%). Among these, 27 brands scored zero. This means that most brands disclose nothing or very little about their supply chain due diligence, assessment, and remediation of environmental and human rights issues.

The highest scoring brand in this section was C&A at 69%, followed by Malwee at 65%.

In this section we had the lowest average Index score for the fourth year running.

The brands with the best scores were Malwee at 61%, Zara at 57%, and C&A at 55% of the available points. The rest of the brands (95%) scored less than 50% in this section. These results show there is a widespread lack of transparency among the majority of major brands across a range of critically important and increasingly urgent issues such as: fighting forced and bonded labour, purchasing practices, living wages, unionisation, gender and race equality, use of sustainable materials, waste and circularity, water and chemicals, climate change and deforestation.

This scenario is even more alarming for the 29 brands (48%) that did not score at all in this section, showing that they do not disclose any information on these urgent matters.

POLICY & COMMITMENTS

1. POLICY & COMMITMENTS

APPROACH

What human rights and environmental policies and procedures do major brands and retailers publicly disclose?

In this section, we reviewed what policies and procedures brands disclose both at their own management level (as related to the company’s own operations in head offices, stores, warehouses, and owned production facilities) and at supplier level (Code of Conduct or other supplier guidance documents).

Social and environmental priorities with measurable, time-bound targets

We looked at the following issues:

• Anti-bribery, Corruption & Presentation of False Information

• Harassment & Violence

• Animal Welfare

• Biodiversity & Conservation

• Living Conditions / Dormitories

• Contracts & Terms of Employment (including notice period, dismissal & disciplinary action)

• Maternity Rights and Parental Leave

• Discrimination

• Diversity & Inclusion

• Water Effluents & Treatment

• Energy & Greenhouse Gas Emissions

• Community Engagement

• Equal Pay

• Annual Leave & Public Holidays

• Working Hours & Rest Breaks

• Freedom of Association, Right to Organise & Collective Bargaining

• Restricted Substances List (RSL)

• Manufacturing Restricted Substances List (MRSL)

• Foreign & Migrant Labour

• Overtime Pay

• Waste & Recycling (Packaging/ Office/Retail)

• Waste & Recycling (Product/ Textile)

• Wages & Benefits (including bonuses, insurance, social security, pensions)

• Health & Safety

• Mental Health & Wellbeing

• Subcontracting

• Homeworking

• Forced & Bonded Labour

• Child labour

• Water Usage

In this section, we have also looked at whether brands and retailers publish strategic goals or roadmaps for improving social and environmental impacts across the supply chain. We specifically looked for clear, measurable, time-bound targets. We also awarded points if brands are reporting on annual progress towards achieving these targets.

And finally, we checked to see if the annual report for sustainability or corporate social responsibility was audited by an independent third party.

1. POLICY & COMMITMENTS

RESULTS

HAVAN

POMPÉIA

1. POLICY & COMMITMENTS FINDINGS

HOW MANY BRANDS OUT OF 250 PUBLISH RELEVANT POLICIES?

Anti-bribery, Corruption, & Presentation of False Information

Discrimination

Harassment & Violence

Freedom of Association, Right to Organise & Collective Bargaining Health & Safety

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

Waste & Recycling (Packaging/Office/Retail)

Community Engagement

Biodiversity & Conservation

Diversity & Inclusion

Energy & Greenhouse Gas Emissions

Working Hours & Rest Breaks

Water Consumption

Maternity Rights & Parental Leave

Annual Leave & Public Holidays

Restricted Substance List (RSL)

Waste & Recycling (Product/Textiles)

Animal Welfare

Equal Pay

Mental Health & Wellbeing

Living Conditions/Dormitories

Contracts & Terms of Employment (including notice period, dismissal & disciplinary action)

Water Effluents & Treatment

Manufacturing Restricted Substances List (MRSL)

Foreign & Migrant Labour

Overtime Pay

Supplier policies FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 39 POLICY & COMMITMENTS

Subcontracting

Homeworking

Company policies Procedures 0 20 60 40

100 80

1. Graph ordered by the most common policies applied to the brand's internal employees. 2. Policies on living conditions/dormitories, contracts and terms of employment, water effluents and treatment, restricted substance list, foreign and migrant work, overtime pay, subcontracting, homeworking, forced and bonded labour, and child labour are categories that have only been reviewed when applied to suppliers. Meanwhile, animal welfare, diversity and inclusion, restricted substance list, and mental health and wellbeing have been reviewed only regarding policies applied to the brands' own internal processes and/or direct employees.

1. POLICY & COMMITMENTS FINDINGS

IMPLEMENTATION OF POLICIES

HARASSMENT & VIOLENCE FORCED & BONDED LABOUR

CHILD LABOUR

disclose policies for their suppliers disclose how policies are implemented disclose policies for their suppliers disclose how policies are implemented disclose policies for their suppliers disclose how policies are implemented

MATERNITY RIGHTS AND PARENTAL LEAVE

WORKING HOURS & REST BREAKS

SUPPLIER CODES OF CONDUCT

disclose policies for their direct employees

disclose policies for their suppliers disclose policies for their direct employees

disclose how policies are implemented state that Code of Conduct is part of the supplier contract

publish Code of Conduct in languages of key production countries

1. POLICY & COMMITMENTS

IMPLEMENTATION OF POLICIES

ANIMAL WELFARE BIODIVERSITY & CONSERVATION

disclose policies for their direct employees

disclose how policies are implemented disclose policies for their direct employees

disclose policies for their suppliers disclose policies for their direct employees

disclose policies for their suppliers

disclose restricted substances list (RSL) disclose manufacturing restricted substances list (MRSL)

disclose policies for their suppliers disclose how policies are implemented disclose policies for their direct employees

disclose policies for their suppliers

1. POLICY & COMMITMENTS

1. POLICY & COMMITMENTS ANALYSIS

The largest fashion brands and retailers operating in the Brazilian market continue to be more transparent about their policies, commitments, and respective practices compared to other sections of the Index, such as governance information, supply chain traceability and data on socio-environmental impact outcomes.

Despite being the highest scoring section, the overall average score remains stagnant year-on-year, with a slight increase from 30% in 2021 to 31% in 2022.

It is noteworthy to highlight that this section presents the greatest disparity between the overall average score of the brands reviewed in the Brazilian Index and in the Global Index, as the average score of the 250 brands reviewed globally was 51%.

The majority of brands disclose company policies – those that apply to their own employees – on the following topics: anti-bribery, corruption and submission of false information (52%), discrimination (52%), and harassment and violence (50%). We observe the least transparency on the following company policies:

mental health and wellbeing (15%), equal pay (20%) and animal welfare (20%).

In terms of their supply chains, most brands disclosed policies on: forced and bonded labour and child labour, both being published by 52% of the brands. We observe the least transparency on the following company policies: overtime pay (8%), maternity rights and parental leave (13%), and homeworking (13%).

There is a significant decrease regarding the number of brands disclosing their suppliers’ policy on overtime pay between 2021 (30%) and 2022 (8%). Part of this decrease is due to the fine-tuning of the research methodology, with the updated indicator guideline now requiring brands to disclose how much they pay for overtime.

Regarding information on how human rights and environment policies are implemented, the highest level of disclosure can be found for procedures that are relatively simple to implement, such as waste & recycling (packaging/ office/retail) (52%), community engagement (48%), and energy & greenhouse gas emissions (48%).

Few brands have policies aimed at the mental health and wellbeing of their employees

Despite the increase in cases of people with post-pandemic mental health issues and the fact that around 30% of Brazilian professionals suffer from burnout, only 9 brands out of the 60 reviewed have a policy on mental health and wellbeing for their own employees.

Meanwhile, 35% have initiatives on mental health and wellbeing aimed at their own employees. This discrepancy between policy and practice may indicate that, for most of the brands reviewed, initiatives on mental health and wellbeing for their employees may not be part of the company’s policies guidelines and may only be present within specific or isolated projects.

Disclosure on policies and commitments for employees

2021 2022 2020

Diversity & Inclusion

Annual Leave & Public Holidays

Working Hours & Rest Breaks

Water Usage

It is worrisome that this indicator has the lowest score in relation to brand policies for their employees since, according to journalist Camila Yahn, fashion is intrinsically linked to mental health because it affects the way we perceive ourselves as well as how others perceive us. As a historically exclusionary place, it directly affects our self-esteem and how easily or not we fit in. Therefore, this issue has several ramifications, ranging from burnout to inclusion, as well as holding high performance jobs. If we are to ensure transformation for a fairer, more humane, and sustainable industry, this issue must also be taken into consideration.

Homeworking and foreign and migrant work

Regarding management procedures for human rights and environment, brands scored lowest on the following issues: homeworking (2%), living conditions/ dormitories (10%) and foreign and migrant work (13%). This demonstrates the lack of transparency on policies for migrant workers and homeworkers, who are particularly vulnerable to human rights abuses in fashion supply chains.

Migrant work, mainly from neighbouring Latin American countries, has an important impact on the national textile production chain, as pointed out by the policy paper "Promoting the resilience of migrant women in the fashion production chain", by FGV's Center for Human Rights and Corporations. Therefore, the low score of brands on these topics is worrisome.

Furthermore, due to outsourcing and subcontracting processes, 98% of all national production in the fashion industry is carried out by micro and small enterprises, including small workshops or home-based work. This work is often hidden, precarious and undervalued due to informality and the difficulty to properly trace entire supply chains. Therefore it is alarming to note that only one brand in this year's Index discloses its procedures on homeworking, going beyond merely banning this practice in its supply chain.

Between 2021 and 2022, there was an increase from 14% to 25% in the number of brands publishing their commitments, targets, or measurable and time-bound objectives on human rights issues.

Despite this significant increase, brands continue to disclose more information on their environmental targets and progress than on their human rights ones. Among the 60 brands reviewed, 21 (35%) publish targets to reduce their environmental impacts, and 18 (30%) disclose evidence of progress on these targets. Regarding human rights, 15 brands (25%) disclose their targets, and only 12 (20%) disclose their progress towards achieving them.

It is also worth noting that while only 13 brands (22%) publish an annual sustainability or corporate social responsibility report audited by an independent third party, there has been a 10 percentage point increase from the 2021 results on this indicator. Such verification mechanism is key for brands to increase the credibility of the information presented in their reports.

Disclosure on policies and commitments for suppliers

Wages and Financial Benefits

Community Engagement

Foreign & Migrant Labour

Improvement in indicators related to targets, progress and verification of information

NATHALIA ANJOS

CREATOR OF AGENCY VOICE 176 AND WRITER OF O CÉREBRO E A MODA.

"The types of management exerted by the corporate environment over employees need to evolve considering the current developments in humanity. There is no separation between individuals and legal persons/professionals, but rather there are people and their functions within the company.

Working is also, or at least should be, a form of expression of our human experience in the environment we live in. This may be a lot for the current economic system to digest, but businesses must understand that the old industrial revolution patterns no longer make sense in this century nor in the next one.

Collaborative communities need to be built where the focus is not on productivity but rather collective well-being for the creation of working environments that, like nature, produce what is needed; deliver on time, like crops; cooperate for the collective system; use resources considering limitations/ regenerations; and plan for the future.

Female workers’ mental health depends on corporations having a reality check. Well-being should not serve productivity. The whole context and experience of working should serve well-being and life itself. Within this mentality shift is the path to new formats, environments, relationships, and experiences of doing things to serve life and not the other way around."

GOVERNANCE

2. GOVERNANCE APPROACH

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

In this section, we wanted to understand who in the company is accountable for social and environmental performance and impacts. First, we looked to see if brands publish direct contact details for a relevant department, such as the sustainability or corporate responsibility team. We also looked for the name of a board member, or board committee, that is responsible for social and environmental issues and for how these decisions and oversights are implemented.

Last year, we also added an indicator on worker (employee) representation on the corporate board of directors and the amount spent on corporate responsibility and sustainability as a percentage of budget or total business revenue.

In addition, we examined whether brands disclose how their employees are incentivised (via their performance reviews or bonuses) to improve social and environmental practices. We looked for

this information for all employees, not just for the sustainability or corporate social responsibility team (purchasing, styling, product development teams, etc.) and the executive level (CEO and other executives). Additionally this year, we included an indicator on the percentage of executive pay and bonus linked to these social and environmental targets.

Finally, we also looked to see if suppliers’ incentives are linked to improvements in human rights impacts and environmental management. The types of incentives we were looking for included brands committing to long-term contracts, increased order size, price premiums and reducing the number of audits.

2. GOVERNANCE RESULTS

BESNI BROOKSFIELD CAEDU CARMEN STEFFENS CENTAURO CIA. MARÍTIMA COLCCI DAKOTA DEMILLUS DI SANTINNI DUMOND ELLUS FÓRUM HAVAN HOPE KLIN KYLY LEADER LOJAS AVENIDA LOJAS POMPÉIA MARISOL MOLECA NETSHOES NIKE PENALTY PUKET SAWARY SHOULDER STUDIO Z TNG TORRA TRIFIL

0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

AMARO IPANEMA LUPO MELISSA OLYMPIKUS SHEIN

2. GOVERNANCE

FINDINGS

HOW EASY IS IT TO CONTACT THE BRANDS?

45%

BOARD LEVEL ACCOUNTABILITY

publish direct contact details for the sustainability department

publish board member responsible for human rights and environmental issues

HOW MUCH DOES THE BRAND SPEND ON SUSTAINABILITY?

ARE INCENTIVES TIED TO ENVIRONMENTAL AND HUMAN RIGHTS PROGRESS?

3%

disclose amount spent on corporate responsibility and sustainability efforts as % of overall budget or total revenue

disclose employee incentives linked to human rights and environmental impacts

publish how board accountability is implemented disclose executive pay/bonuses linked to human rights and environmental impacts

employee representation on the corporate board of directors

disclose executive incentives linked to human rights and environmental impacts FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 49 GOVERNANCE

2. GOVERNANCE ANALYSIS

A growing number of brands are disclosing board level accountability

While the overall average score for this section has remained the same since last year (20%), we continue to see an increase in brands disclosing information regarding how their board manages issues related to their operations on environmental and human rights impacts.

This year, 28% of brands disclose the name or contact details of a board member responsible for human rights and environmental issues (up from 26% in 2021) and 28% publish a description on how the responsible board member is held accountable within the company (up from 22% in 2021).

However, despite the slight improvement in the indicators, the brands reviewed by the Global Index score significantly higher than those reviewed in Brazil Index on the topics mentioned above. It is important that brands continue to improve their transparency on these indicators, as

it is vital for executive boards to bring sustainability issues at the forefront of their organisational commitments and ensure human rights and environmental issues are addressed at the highest decision-making level in the company.

With the increasingly importance of the ESG issues in corporate governance and with growing pressure from various stakeholders, such as investors and regulators, on this, we expect reporting on executive pay to become more transparent.

This information is key as sustainability targets tend to represent a tiny fraction of executive bonuses which begs the question: how are executives truly incentivised to reach these targets when their base pay is already staggering? Major brands and retailers must be held to account for their contribution to the widening global wealth gap.

on the implementation of specific social projects, donations, or expenses with their own institutes. However, they do not disclose the total amount spent on the implementation and management of social and environmental activities across the brand's entire operation, as requested by the indicator guidelines.

Employee and supplier incentives linked to socioenvironmental impacts

Only 25% of brands publish whether their incentive programmes and executive pay (CEO, CFO and other directors) are tied to human rights and environmental management targets and improvements. Even less brands (12%) disclose the percentage of executive bonus or pay tied to these targets.

Many brands do not disclose information on their investments in sustainability

Only 4 out of the 60 brands reviewed disclose the amount spent on corporate responsibility and sustainability, including a dedicated team, as a percentage of their budget or total revenue. Some brands only disclose the amount of money spent

To ensure that improvements in environmental and human rights aspects are achieved, employee-level incentives are key, including annual bonuses and performance evaluation of employees from different areas of the company. Among the brands reviewed, only 18% disclose how their employees' bonuses are tied to improvements in the management of socio-environmental impacts.

Similarly, incentives to suppliers, such as long-term purchase commitments and increased orders, also demonstrates how committed the company is to

Even considering the pay inequality between executives and other workers , few brands and retailers disclose how their executive pay is linked to environmental and social goals

improving its purchasing practices and its relationship with the supply chain. However, only 12% of the brands disclose that the incentives offered to their suppliers are tied to improvements in the management of working conditions and environmental practices.

At company level we looked at whether companies disclose employee representation on their corporate boards of directors or on their committees and collegiate bodies. Only 3% of brands disclose information on this indicator.

Low brand transparency on this indicator may represent a missed opportunity for employees to be heard at all levels of the company and for improvements based on their experiences to be incorporated into management. A study by American Compass has shown that worker councils and board-level employee representation “not only increase trust and cooperation, but also enhance productivity, capital formation, market value and resilience”.

Almost half of the brands disclose the direct contact with the sustainability team

This indicator has the highest score in this section with almost half of the brands (45%) disclosing direct contact

information with their departments responsible for sustainability and corporate social responsibility issues. Disclosing an email or phone number is a simple act of transparency that brands can adopt to communicate with customers and other interested parties in a more open and direct way.

we can’t have is a consequence-free world where people who turn a blind eye to abuses in

Mary Creagh, Former Chair of the Environmental Audit Select Committee on the UK Modern Slavery Act in 2019

“What

their supply chain get away scot free."

VIEWPOINT: GOVERNANCE AND DIVERSITY IN THE FASHION SECTOR

REGINA MAGALHÃES SENIOR EXECUTIVE IN SALES, DIGITAL TRANSFORMATION AND SUSTAINABILITY

The fashion industry is one of the industries with the greatest social and environmental impacts in addition to its great economic importance. If, on the one hand, it presents serious socio-environmental problems, such as pollution, waste generation and several cases of modern slavery, it has, on the other hand, an enormous potential to advance in circular economy models and create quality jobs, mainly through the new technologies of Industry 4.0.

Turning a business that presents negative impacts into a business of positive impacts is becoming increasingly urgent and, fundamentally, more possible and viable. It can even make the business more competitive. However, it is not a simple change. It implies more sophisticated management systems, enabling the continuous monitoring of the entire value chain as well as adopting new technologies and business models.

The sector also carries great cultural importance: its consumers seek to express their gender, racial and cultural identities as well as their sexual orientation, etc. through fashion, and they expect companies to be

consistent in respecting and valuing diversity. Understanding the cultural and behavioural changes in society and then introducing them into the products and in the relationship with consumers is fundamental for business success in this day and age.

These factors represent strategic aspects for companies and, therefore, should be under corporate governance responsibility. Strategies, plans, and investments that affect the company’s social, environmental, and cultural impacts should be decided and monitored by the board of directors. It is also the board’s role to integrate the sustainability agenda into all areas of the company, such as product development, finance, investor relations, supplier management, operations, marketing, and people management.

The first and most important role of the board is to define the strategy, i.e. how the social, environmental, and cultural issues will be incorporated into the business. Usually, companies address these issues as risks, but they can be considered business opportunities by way of competitive differentiation.

The second role of a board is to define the social and environmental materiality of the company: identifying the factors that can affect the financial performance and the value of the company (financial materiality) as well as the factors that can generate relevant social and environmental impacts (impact materiality). Each company has its own materiality that depends on the specific conditions of the product, production process, business model and market in which it operates and its value chain.

Once the strategy is defined, the board then creates the conditions in governance and top management to act effectively with this agenda. Firstly, professionals with in-depth knowledge of these issues must be part of the board, which can also create a specific committee, with its own members and expert external members, in order to generate consistent analyses and formulate recommendations for decision-making.

The board must also be able to understand the business context and dialogue with the various stakeholders. The social, environmental, and cultural contexts can change rapidly and take by surprise a management that fails to anticipate the transformations. Based on this, diversity on the board helps

companies to identify emerging issues, establish communication strategies with different audiences, identify new demands, and develop new products. In other words, diversity is strategic for business in all its dimensions.

Lastly, the creation of indicators to monitor the companies’ performance on material issues is fundamental to guide management, define investments and new businesses as well as make communication transparent. Incorporating these indicators into the mechanisms of incentives and variable compensation for executives is the most efficient way to align the company’s strategy with the management of the business.

Governance is what will guarantee a competitive, ethical, and sustainable strategy. However, the data from this 2022 Fashion Transparency Index Brazil show that most companies still have a long way to go to create adequate governance for new challenges. More than half of the 60 brands reviewed do not disclose information on governance. Only 22% have career development programmes for women, 12% incorporate sustainability into their executive compensation criteria and just 28% disclose the board member who is responsible for human rights and the environment in their business.

3. SUPPLY CHAIN TRACEABILITY APPROACH

Are brands disclosing their supplier lists? And how detailed is this information?

This section focuses on whether brands are publishing their supplier lists, and what level of detail brands are disclosing about this information.

Disclosing factories, processing facilities and raw material suppliers

We looked for supplier lists at three different levels:

1. Are brands disclosing where their clothes are made, in other words, the facilities with which brands have a direct relationship and typically do the cutting, sewing, and final trims of products? These facilities are generally referred to as the first-tier or tier 1 manufacturers.

2. Are brands disclosing processing facilities, such as weaving and spinning mills, dye-houses, laundries, wet processing, embroidery, printing, and finishing for fabrics?

3. Are brands disclosing their suppliers of raw materials, such as fibres, hides, rubber, chemicals, and metals?

We also checked whether brands disclose information about tracing at least one raw material supply chain such as cotton, leather, viscose, or wool.

• Address of supplier’s facilities

• Types of products/services at such facilities

• Name of parent company for each facility

• Approximate number of workers in each facility

• Gender breakdown of workers

• Race breakdown of workers

• % of migrant or contract workers

• If the facility has a trade union or an independent worker committee

• Certifications the facility holds, if any

• If the list includes at least 95% of its supply chain

• If the list was updated within the past 6 months

• If the list is in machine-readable format (csv, json, xls)

In 2022, we have included two new indicators that apply to Tier 1 level suppliers and processing facilities.

The first indicator aims to see if brands are disclosing the volume of clothing these suppliers produce and what percentage of that volume is covered by their supplier list.

The second indicator looks at whether the brands' supplier list is provided to the Open Supply Hub (OS Hub), a neutral and freely available tool that assigns a unique identification number to garment facilities around the world to standardise facility names and addresses. Importantly, brands can only receive points for this indicator if they are an active contributor to the OS Hub (meaning that they manage the list themselves rather than OS Hub uploading public lists) and if the brand discloses a link to the OS Hub from their website.

We want to know if brands share detailed information such as:

Image: Women from the Abelhas Lutadoras do Sertão group at an agroecological cotton farm

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 55 SUPPLY CHAIN TRACEABILITY

DECATHLON ANIMALE

1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

HERING MARISA IPANEMA MELISSA ADIDAS 60% 58% 57% 57% 54% DAFITI ARAMIS MALWEE RENNER RIACHUELO YOUCOM PERNAMBUCANAS 69% 65% 65% 64% 64% 64% 63% C&A 83% HAVAIANAS 97% * The brands are ranked in numerical order out of a score of 72, but they are shown here as a rounded-up percentage. If any brands have the same score, they are listed in alphabetical order.

3. SUPPLY CHAIN TRACEABILITY FINDINGS

DISCLOSING FIRST-TIER MANUFACTURER DETAILS

33% FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 56 SUPPLY CHAIN TRACEABILITY

PUBLISHING PROCESSING FACILITIES LIST

30% 27% 10% 23% 30% 28%

include the race breakdown in each facility publish at least 95% of their manufacturers in the list

PUBLISHING RAW MATERIAL SUPPLIERS LIST

publish which certifications the facility holds publish processing facilities list include the gender breakdown of workers in each facility

disclosure whether the list was updated within the past 6 months 17% 5% 8% 5% 7%

include the race breakdown in each facility publish raw material suppliers list disclosure a list covering more than one raw material type

3. SUPPLY CHAIN TRACEABILITY ANALYSIS

Publicly disclosed supplier lists are useful to labour and environmental activists, trade unions, worker representatives and civil society as they provide quick and effective evidence of where responsibility lies when human rights and environmental abuses are discovered within the supply chains of major brands and retailers.

Besides the disclosure and monitoring of supply chains being a responsibility of brands, publishing supplier lists also brings significant benefits to their own businesses. Supply chain transparency enables brands to receive timely and credible information from worker representatives and environmental groups. This can help mitigate risks such as unauthorised subcontracting. Supply chain transparency also enables collaboration with other companies sourcing in the same facilities to work together to solve problems. It can also enhance investor and consumer trust in a brand, showing stakeholders that brands are willing to be open about where their products are being made and to be held to account for what happens in their supply chains.

Traceability: Overall average score year-on-year progress

2021 2022 2020 2019 2018

12% 17% 25% 21% 18%

Disclosing first-tier manufacturers

Only 1⁄3 of the brands reviewed publish their first-tier manufacturing lists, i.e. those who are responsible for the cutting, sewing and finishing of garments in the final stage of production. These are the suppliers that will then ship products to warehouses ready for the shop floor and our wardrobes.

Compared to 2021, there was a decrease in the percentage of brands that disclose their first-tier supplier lists (from 40% to 33%). This drop was due to two factors: 10 new brands added to this year's survey, of which only 2 publish first-tier listings, and by fine-tuning of the research guidelines. Starting this year, supplier lists that do not present a significant proportion of the brands' suppliers will no longer be accepted. Therefore, some brands that scored last year with few suppliers published in their lists, did not score this year.

Regarding the level of detail provided on suppliers’ lists, 27% of brands publish the name of the factory’s parent company and 30% disclose the address and the approximate number of workers at each site. Also, 33% of brands disclose the types of products or services provided. This type of information is useful because it helps stakeholders to better understand supply chains and prioritise the best course of action to address human rights and environmental risks where required.

Of the 60 brands reviewed, 23% disclose the percentage of migrant or temporary contract workers at each facility and 18% disclose whether the facility has union representation or an independent worker committee. Committees and trade unions are important for better working conditions to be achieved and public disclosure of this information helps worker representatives and brands themselves to identify how best to engage with a supplier when concerns arise. Transparency here also helps trade unions understand where they can prioritise their organising efforts.

of 20 brands of 30 brands of 40 brands of 50 brands of 60 brands FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 57 SUPPLY CHAIN TRACEABILITY

First-tier manufacturers Disclosing processing facilities

Supplier name

Facility address

Types of products or services produced on site

Approximate number of workers at each site

Gender breakdown of workers

Race breakdown of workers

% of migrant workers or contract workers

List available as a csv, json or excel file

If the list includes at least 95% of its supply chain

If the list has been updated in the last 6 months

This year, 18 of the 60 brands (30%) reviewed published which certifications each supplier holds. The brands reviewed by the Brazilian Index tend to disclose this information more often than those in the Global Index, as only 10% of the brands reviewed globally disclose this information.

Publicly disclosing certifications at facility level helps to understand the nature and robustness of due diligence at that facility.

Our research also found that 28% of companies publish their supplier lists in a

machine readable format, such as Excel, csv or json. This format makes it easier to access, search and handle the data and is part of the standards suggested as best practices by the Open Data Standard for the Apparel Sector.

Also, 30% of brands disclose whether their supplier list has been updated in the last six months. Major brands often start and stop working with suppliers on a frequent basis, which means their supplier lists become out-of-date quickly and

ongoing supply chain visibility can be lost. Therefore, is it important for the disclosure of supplier facilities to be regularly updated, at least every six months.

Finally, we looked at the percentage of suppliers disclosed by brands. Among the 60 brands reviewed, 14 publish a public list representing at least 95% of their suppliers.

Similarly to previous years, the visibility of people who make our clothes tends to decrease the further we move away from the brands' operations. Therefore, the results found in relation to suppliers beyond firsttier level are lower than those cited above.

This year, the number of brands disclosing their processing facilities remained stable compared to the 2021 results, with 28% of them publishing the name of the facility and the type of products or services provided. Processing facilities include a wide range of activities, such as ginning and spinning yarn, wet processes, embroidering, knitting and weaving fabrics, printing, finishing, leather tanneries, dyeing and laundering.

In addition, 27% of the brands disclose the address of the facilities, 20% disclose the number of workers at each location and 13% disclose whether the facilities have an association with any trade union or other type of independent workers' entity.

Regarding gender and racial breakdown, 17% of the brands disclose the breakdown between men and women, and only 5% disclose the ethnic-racial breakdown.

Among the 60 brands, 15 disclose which certifications facilities hold and 16 publish a list in a machine readable format that has been updated in the last six months.

Processing facilities

Supplier name

Facility address

Types of products or services produced on site

Approximate number of workers at each site

Gender breakdown of workers

Race breakdown of workers

% of migrant workers or contract workers

List available as a csv, json or excel file

If the list includes at least 95% of its supply chain

If the list has been updated in the last 6 months

Disclosing raw material suppliers

Raw material suppliers are those that provide brands and their manufacturers with materials such as fibres (cotton, wool, viscose, polyester, nylon and more), hides, rubber, dyes, chemicals, metals and so on. The raw material level of the supply chain is where brands typically have the least visibility and hence where many human rights and environmental abuses thrive, yet go unseen.

Supply chain traceability is more important than ever considering the toll the pandemic has had on supply chain workers across the world, as well as the intensifying climate crisis. Greater traceability allows us, for instance, to identify if the material in our clothes comes from regions where forced labour has already been identified or from areas linked to deforestation.

Similar to last year's Index results, only 8% of brands disclose their raw material suppliers. Of these brands, only 5%

disclose a list covering more than one type of material supplied and 3% the specific names of facilities or farms. These results confirm the lack of transparency that major brands have about their raw material supply chains.

When looking for more detailed information, the results are even lower. Only 1 brand out of the 60 reviewed discloses the number of workers, the racial and gender breakdown and the number of migrant or temporary contract workers in its list of raw material suppliers.

When comparing the results of this section with those found by the Global Index, we can see that while 58% of the 250 brands internationally reviewed disclose whether they are tracing the source or supplier of one or more specific raw materials, in the Brazilian survey this number falls to 12%. Tools used by brands to do this tracing and mapping may include certification systems (excluding those that use a mass balance system such as Better Cotton), blockchain, DNA tracing and other similar technologies.

It is important to mention that, although several brands disclose their fabric, yarn and chemical suppliers as raw material suppliers, this is not what we are looking for in this section. Here we look specifically for the early stage of the raw material. For example, in the case of cotton, we look for the farm where it is grown and not the weaving mill that supplies the ready-made fabric to the brand. Moreover, just publishing their chemical suppliers, as some brands do, is not enough to score points either. We look for a list that includes the main type of material used by companies, which in the case of clothing brands would be fibres, such as cotton, polyester, or viscose.

We hope brands understand the importance of traceability of their raw materials and can be more transparent about it.

Open Supply Hub

Regarding this new indicator added this year, only 3 brands send their supplier lists to the Open Supply Hub, linking the initiative to their websites.

Having the lists available in this tool allows easy identification of suppliers by means of a universal ID. It also facilitates greater cooperation and simpler and more efficient access to this data on a global basis by trade unions, NGOs, and other stakeholders. Learn more about this initiative in the Case Study on page 61.

Grillon, Executive Director, Open Supply Hub

"It is absolutely critical that reporting on ESG is built on a reliable and collaborative foundation in order to bring about the supply chain improvements we desperately need. That foundation cannot exist if data is isolated or inconsistent. Therefore, open, standardised, and transparent supply chain data is essential.''

Natalie

CASE STUDY: TRANSPARENCY IN ACTION

Myanmar Centre for Responsible Business (MCRB) and local organisations harness traceability data for enhanced due diligence

When everyone working in global supply chains enjoys equal access to quality, open- licensed data, it leads to more sustainable and equitable outcomes for the most vulnerable communities affected by the apparel sector.

After the military seized control of Myanmar in February 2021 and the subsequent crackdowns on protests and demonstrations, many trade union leaders in the garment sector were forced into hiding for their safety. However, factories continued to operate, and where they were unable to sort problems out directly with management, workers were forced to turn to other supportive labour organisations to help them with complaints about factory conditions. The workers and labour organisations were sometimes able to identify the brands sourcing from the factory concerned, but they lacked contact with them. They asked the Myanmar Centre for Responsible Business (MCRB) for help.

Using a combination of Open Supply Hub (OS Hub) data, MCRB contacts and additional desk research, MCRB was able to alert affiliated brands to issues in their supplier factories. As these brands were already concerned about the situation in Myanmar, MCRB was able to quickly connect them to labour organisations who could give them another pair of eyes to share specific factory conditions and the wider situation on the ground for workers, which helped brands both investigate specific complaints and better support their ongoing heightened due diligence in the region.

Transparency of which brands are sourcing from which factories increases the leverage of workers and their representatives to resolving issues. As Vicky Bowman*, Director of MCRB explains: “The OS Hub continues to be really useful as we seek to build a more structured dialogue between brands sourcing from Myanmar and some trade unions and labour rights organisations on the lack of labour law compliance rights abuses they have prioritised, and their recommendations for remedy. Checking on the OS Hub helped us to identify an initial list of brands to contact, but we know that there are other companies sourcing from Myanmar. If we can get a fuller and more up to date list, we will be able to promote a more comprehensive and valuable dialogue.”

When brands and other stakeholders from across the apparel sector share supplier data in a way that is open and standardised, cross-sector collaborations like this one are enabled. This is why the OS Hub exists. For the first time this year, the Index has specifically measured whether brands contribute their supplier lists to OS Hub, and actively manage and update their data on the platform. Our data reveals that 33% of large brands that operate in Brazil publish their tier one factory lists, but only 5% of them contribute these lists to the OS Hub and actively manage their data.

While publishing data is an important step, doing so in one common registry is what can actually unlock stories like this one. Without a common registry, organisations doing vital due diligence work in supply chains are forced to spend precious time scrolling through website after website, trying to find the data they need. If everyone in the apparel sector is sharing data in the same place, then everyone, in turn, knows where to go to get data about apparel facilities and who is connected to them, thus driving improvements in human rights and environmental conditions across fashion supply chains.

* Vicky Bowman, who contributed to this Case Study is currently facing political imprisonment in Myanmar alongside her husband Ko Htein Lin. According to recent news, they will be released soon alongside other political prisoners. She is the Director of the Myanmar Center for Responsible Business and former UK ambassador. We hope that they will be released soon and supported so that Vicky's crucial work on human rights in Myanmar's manufacturing industry can continue.

image: INDUSTRIALL – MYANMAR workers in solidarity in front of the factory

CASE STUDY: #WHOMADEMYCLOTHES IN PRACTICE

The Tecendo Sonhos (Weaving Dreams) programme, run by Aliança Empreendedora, began in 2014 with the aim of promoting decent work by supporting owners of sewing workshops in their regularisation, the formation of new productive arrangements and access to a market that pays fairer prices per garments so that they can absorb the costs of formalisation.

Since its creation, the programme has worked in the textile hub of São Paulo, focusing its actions on the migrant population, mostly Bolivians, but has also worked in the agreste countryside part of Pernambuco state, more specifically with women in Caruaru.

The focus was on the workshop owners who, like the seamstresses, have exhausting working hours. In addition to managing the orders, the owners also sew and are responsible for teaching the new seamstresses. They still have little access to information on how to regularise their work, which reinforces the difficulty of absorbing the high costs of formalisation and hiring employees. This phenomenon places an even greater burden on women, both female workshop owners and female employees, who, in addition to the aforementioned factors, are left with the tasks of cleaning the house-workshop, cooking for all the employees, and looking after their children.

In order to achieve its goals, the programme has four pillars for action, which work in a complementary way:

Entrepreneurial education: Training on management and skills for the sewing workshops regarding regularisation, certifications, sales, pricing, financial health, and the structure of the fashion chain. Support for individual and family businesses and productive groups (associations/cooperatives);

Visibility and access to a fair market: Mapping and connecting different technologies and initiatives that support fair market access for the supported workshops.

In both regions, field research was conducted with several social organisations already working on migration issues together with governmental institutions and institutions in the textile-fashion sector.

Since its inception, the programme has undergone several iterations, always with the participation of the migrants themselves in its creation. Something worth highlighting is that the trainings were mostly carried out by migrants who were trained in entrepreneurial education by Entrepreneurial Alliance, thereby ensuring that the programme beneficiaries had greater identification and cultural exchange with the educators.

Research, innovation and advocacy hub: Produces research on the textile and garment chain, migration, and decent work to be shared with stakeholders seeking to develop public policies and good practices;

Promotion of sustainable and fair fashion: Carrying out activities to disseminate good practices in the textile and clothing industry as well as promoting events and dialogue among various stakeholders;

During the eight years of the programme, Tecendo Sonhos has trained more than 3,500 sewing migrants, systematised the lessons learned, adapted and created new methodologies, formed other institutions on the subject such as the Migrant Support and Pastoral Centre (CAMI) and the Presence in Latin America (PAL), established partnerships, stimulated networking between different institutions and produced more than 20 free online materials.

Since 2020, the programme has been supporting the formation of a group, which is called the Rede Costurando Sonhos, by supporting a coalition of partners seeking regularisation and ability to sell to larger and more structured brands in the market, providing a greater economic balance and fairer working conditions.

Tecendo Sonhos: a programme aiming to help promote better working conditions in the textile and clothing industry.

Image: Tecendo Sonhos

VIEWPOINT: GENDER VULNERABILITIES IN THE GARMENT

SECTOR: THE SEAMSTRESSES

ARE NOT ALL THE SAME

LUCIANA SONCK FOUNDING PARTNER OF TEWÁ 225 AND SPECIALIST IN SUSTAINABLE DEVELOPMENT

The structural inequality between men and women in various sectors, is a starting point for the analysis of working conditions and workers’ rights. In the fashion industry, as the fourth largest industry in the country and the second largest employer, women in the same positions and functions receive on average 12% less than men (RAIS, 2020). This fact is not obvious in the reports of the country’s main companies, as 0% of them provide transparency regarding this reality, as this year’s FTI points out. While women account for 72% to 80% of the workforce in the sector, there is still a huge gap to ensure that their quality of life and dignity at work are, in fact, addressed. That is why the Public Labour Prosecutions Office, in partnership with UNOPS, UN Women and Tewá 225, launched the study Women in the Clothing Sector: a study on gender and working conditions in the fashion industry in August of this year.

The fashion industry, despite making almost R$200 billion annually (Fashion Network, 2022) and representing about 23% of the entire manufacturing industry (IBGE, 2021) is still among those with the

worst pay for their workers. This reflects on the overlapping of vulnerabilities when considering gender issues. The study, which included 140 women workers in the garment sector in the Metropolitan Region of São Paulo, showed that the family income of most women workers is between 1 and 2 minimum wages, thereby putting at risk the food and housing security of their families, since 45% to 65% of them are the sole breadwinners.

Complexity increases in the intersectionalities of gender. After all, women are also on unequal terms with each other. In the case of the fashion industry, the vulnerability of female migrant and refugee workers is evident: While the family income of Brazilian female workers is between 1 and 2 minimum wages, migrants’ and refugees’ incomes drops to 1/2 to 1 minimum wage. Looking at the race breakdown, it was also evident that black workers receive around 18.5% less than white men and women.

Other evidence pointed out by the study is the difference in working conditions between female workers: While Brazilian

women find themselves in formal employment (30.9%), working up to 9 hours a day (95.8%), refugees and migrants are mostly informal workers (51.2%) with working hours of more than 12 h a day (72.1%). The study also captured the realities of female workers who are not paid for their labour, with 1% of Brazilian women and almost 5% of migrants and refugees, which provides evidence of modern slavery. Among the collected data, this year’s FTI shows us that only 10% of companies publish data on the existence of gender-related labour violations at their suppliers’ facilities, which highlights the lack of awareness regarding working conditions throughout the value chain.

While only 5% of the brands reviewed by the FTI publicly disclose having actions focused on promoting gender equality in the supply chain facilities, for 67% of the female workers interviewed, informality is the main barrier for them to access better working conditions. The absence of public policies was also reported by 61% to 80% of the interviewees. The survey managed to capture their wishes

for their future: for Brazilian women, a strong call for improved income, while among the refugee and migrant women, the hope for shorter working hours and access to decent working conditions - whether through formal employment or entrepreneurship.

There is still a long way to go to actually addressing gender vulnerabilities in the fashion industry.

KNOW, SHOW & FIX

4. KNOW, SHOW & FIX APPROACH

diligence processes?

Our methodology aligns to the UN Guiding Principle 17 on Business and Human Rights, which calls for companies to identify, prevent, mitigate and remediate their actual and potential adverse impacts. Therefore, for brands to score we only accept disclosure that goes beyond auditing, as auditing alone does not represent a robust due diligence process on environmental or human rights issues.

KNOW

We measure disclosure on due diligence to understand how brands identify human rights and environmental risks, impacts and violations in their supply chains.

We also look for information on how brands assess their suppliers to ensure they meet their standards and policies. These assessments normally take place through audits of the facilities.

This year we separated due diligence processes for human rights risks from environmental risks. This doubled the amount of points available – improving the depth of the research and encouraging brands to be more transparent on both social and environmental aspects. The same change occurred with regards to the indicator on the scope, process, and accreditation of audits, which was also separated into two indicators, one focused on human rights evaluations and the other on environmental evaluations.

SHOW

We looked at whether brands disclose the results of their supplier assessments, either as a summary of issues found in factories or at a more granular level. At the granular level, we look at whether brands disclose issues found at individual facilities, submitting audit reports on the three levels of supply chain reviewed on the Index (first-tier suppliers, processing facilities and raw materials).

FIX

We looked at what brands publish about how they remediate human rights and environmental violations occurring within their suppliers. We also measured whether brands publish a confidential grievance mechanism for both direct employees and workers in the supply chain, including whether brands disclose outcome data on reported violations.

In this section, we awarded points if brands disclose information such as:

• How brands work to identify and address both human rights and environmental risks, impacts and violations in its supply chain (i.e., its approach to conducting due diligence)

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

• How suppliers are assessed against the brand’s policies

• The process for taking on new suppliers

• The process for exiting a supplier

• If supplier assessments involve trade union representatives and include off-site worker interviews

• Findings from its facilitylevel assessments

• Information on corrective action plans proposed to suppliers.

What do major brands and retailers communicate about their human rights and environmental due

KNOW, SHOW & FIX

RESULTS

DAKOTA DEMILLUS

DUMOND TORRA NETSHOES SHOULDER STUDIO Z BESNI BROOKSFIELD CAEDU

CARMEN STEFFENS CIA. MARÍTIMA COLCCI DI SANTINNI ELLUS FÓRUM HAVAN HOPE KLIN KYLY LEADER LOJAS AVENIDA LOJAS POMPÉIA LUPO MARISOL MOLECA NIKE OLYMPIKUS PENALTY PUKET SAWARY SHEIN TNG TRIFIL

4% 4% 4% 4% 2% 2% 2% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

JOHN JOHN LE LIS BLANC CENTAURO

RENNER YOUCOM 40% 40% DAFITI IPANEMA MELISSA ZARA ADIDAS HERING HAVAIANAS 4.

50% 48% 48% 48% 46% 46% 42% FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 66 KNOW, SHOW & FIX

8% 8% 6%

ARAMIS OSKLEN ANIMALE FARM AMARO MARISA TRACK&FIELD

19% 19% 17% 15% 13% 13% 12%

C&A MALWEE 69% 65% * The brands are ranked in numerical order out of a score of 52, but they are shown here as a rounded-up percentage. If any brands have the same score, they are listed in alphabetical order.

4. KNOW, SHOW & FIX FINDINGS

describe their human rights due diligence process

disclose how impacted stakeholders such as farmers, workers and producers are involved in the process

disclose the outcomes of steps taken to address violation

describe their environmental due diligence process

disclose how impacted stakeholders such as farmers, workers and producers are involved in the process

disclose the outcomes of steps taken to address violations

KNOW: SUPPLIER ASSESSMENTS SHOW: AUDIT RESULTS

describe the scope, process, and accreditation for environmental audits

describe the scope, process, and accreditation for human rights audits

disclose how many audits included a trade union representative

disclose a summary of assessment findings at the first tier

disclose a summary of assessment findings at raw material level

publish full audit reports by named facility at first tier

KNOW: HUMAN RIGHTS DUE DILIGENCE KNOW: ENVIRONMENTAL DUE DILIGENCE

4. KNOW, SHOW & FIX FINDINGS

FIX: REMEDIATING ISSUES

disclose the process for supplier remediation of compliance issues found

disclose how impacted stakeholders are involved in the remediation

disclose strategies to terminate relationships with suppliers who remain in non-compliance

disclose corrective action plans with their respective status, by named facility

FIX: GRIEVANCE CHANNELS

publish a confidential grievance mechanism for their employees

publish a confidential grievance mechanism for supply chain workers

disclose whether the grievance mechanism is included in supplier policies

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

4. KNOW, SHOW & FIX ANALYSIS

KNOW

Human rights and environmental due diligence

According to the Organisation for Economic Co-operation and Development (OECD), due diligence is the process by which companies can identify, prevent, mitigate and account for how they deal with their actual and potential adverse impacts. Companies are expected to carry out this process both in their own operations and those of their suppliers. Importantly, this is an ongoing exercise which recognises that risks may change over time, as the operational context evolves and that the adopted measures should be proportionate to the severity and likelihood of impacts.

For example, if a company works with a supplier that is located in a region with a weak inspection body on environmental regulation, the measures it will need to take to prevent impacts will be more comprehensive than the measures it would need to take with a supplier operating in an area with adequate environmental inspections.

We must also consider that environmental and social risks are intrinsically linked. If brands’ operations increase the risk of flooding, for example, failing to cease, prevent and mitigate this environmental risk will compromise the human rights of workers and their communities. It is therefore vital that brands conduct robust due diligence for both human rights and environmental risks.

Due diligence can help organisations decide whether or not to go ahead with operations or business relationships as a last resort, because the risk of an adverse impact is too high or because mitigation efforts have not been successful. A robust due diligence process can also maximise brands' positive contributions to society, improving relationships with stakeholders and protecting their reputation.

Despite all these benefits, only 18% of brands disclose a description of their human rights and environmental due diligence processes (2 percentage points more than in 2021). Even though the overall outcomes in this section are low, and lower than those found

by the Global Index, there is a slow but progressive improvement in brands since the indicators were included in the Index survey in 2019.

Among brands reviewed, 17% publish the main risks, impacts and human rights violations identified, as well as the measures taken to cease, prevent and remediate such risks while 7% disclose the respective outcomes of these initiatives. From the environmental point of view, 15% disclose the risks, 12% disclose what was done as prevention and mitigation, and 8% disclose the achieved outcomes.

Separating human rights and environmental due diligence indicators has shone a spotlight on how these efforts compare to one another. The similar scores show us that once brands disclose their due diligence processes, they do so for both environmental and social breakdowns.

It is important for companies to engage meaningfully with the stakeholders impacted by the risks mapped in the due diligence process, as their decisionmaking may affect them. Despite this, only 7% of the brands reviewed disclose whether representatives of workers/ producers/farmers, trade unions and other affected groups were consulted during the process.

This figure is even lower when we look at how women workers, women's organisations, women's human rights advocates and gender experts are involved at all stages of due diligence, with only 3% of brands disclosing this information. Given the important role women play in the global fashion industry and the gender-specific risks they face, such as being more vulnerable to harassment in the workplace and to being underpaid, it is imperative that brands are more transparent about the inclusion of women in risk mapping, prevention and remediation.

Among the brands reviewed by this Index, 27% disclose their scope, process and accreditation for environmental audits, and 30% disclose the same information on audits regarding human rights issues. In addition, 40% of brands disclose their criteria for taking on new facilities before production begins, ensuring that they meet their policies and standards.

Only 7% of the companies disclose the number of workers who were interviewed off-site during audits and only 3% of audits that included union representatives. These are important as conducting off-site interviews can provide safer spaces for workers to openly disclose concerns about their working conditions. Also, the presence of a trade union representative can help to capture possible problems of freedom of association, since the nuances that accompany these rights are difficult to be monitored by a regular audit process.

As the charts show, only 22% of the brands reviewed disclose a summary of their findings from audits at first-tier level supplier facilities. This already low score decreases significantly when we look for more detailed assessments or analyse beyond the first tier.

This indicates that, as already noted in other sections of this report, when we move away from brands' operations in their supply chains, information transparency decreases. Areas where operations tend to be less visible are more prone to environmental abuses and worker exploitation.

Major brand disclosure of supply chain audit results

First-tier suppliers Processing facilities Raw material level

Less than half of the brands publish information about the audit process at their suppliers' facilities

Identifying social and environmental risks is only valuable if brands then take tangible action to cease, prevent and mitigate these risks. Only 25% of brands describe the remediation process that is put in place when issues are found in their supplier facilities, such as corrective action plans or further training. This result is well below that the Global Index, in which 66% of brands disclose this information.

In addition, only 7% of companies disclose how they engage with affected stakeholders in the development and implementation of remediation plans. This is still a major challenge, because to know whether the actions taken are in fact correcting the problems it is essential to consider workers, producers, farmers and unions in the process.

Only 15% of brands disclose whether they publish their strategies for terminating relationships with facilities that remain in non-compliance, ensuring brands do not ‘cut-and-run’ immediately. Brands have a moral responsibility to stay and remediate the problems found, rather than just terminating the relationship. This is important because when brands suddenly terminate a relationship with a supplier, this can cause devastating impacts on workers. If suppliers are given reasonable notice of the brand’s

exit, they can plan ahead in order to avoid suddenly having to lay off workers.

Another topic little disclosed by the brands is the progress status and findings of corrective action plans (CAP), i.e. clear, time-bound plans with detailed measures to prevent or mitigate the damage. Only 7% disclose information on their CAPs, followed by the respective progress status at individual facilities, and only 3% publish the cause analyses which led to CAPs.

Just over half of the brands (52%) disclose the description of the grievance or complaint mechanism related to human rights and environmental issues, aimed at their own employees, and 48% publish how such mechanisms are implemented. Confidential grievance mechanisms are designed to enable workers to speak up with less fear of retaliation.

Regarding this information for workers in the supply chain, the percentage of brands that disclose a description of the grievance mechanism drops to 43% and the percentage of brands publishing the implementation of such mechanisms drops to 38%. Only 18% describe how workers are informed about the grievance mechanism, ensuring that they know how to use and access it, and 32% publish that access information is present in documents such as the supplier's code of conduct.

Finally, as in the Global Index, a quarter of the brands (25%) in Brazil disclose data about worker grievances filed, addressed, and resolved. Although the result is still low, there is an increase compared to 2021, which was 14%. More detailed information about the outcomes of complaints and how they were resolved can provide important learning for the industry.

Alliance

''The global supply chain is broken; it is unregulated, and it allows for brands to accumulate super profit through the great exploitation of the workers.''

Wiranta Ginting, Asia Floor Wage

SPOTLIGHT ISSUES

5. SPOTLIGHT ISSUES APPROACH

Each year, the Fashion Transparency Index explores some pressing key topics in the fashion industry in deeper detail. For 2022, our focus covers six strategic areas to align with and support the United Nations’ Sustainable Development Goals (SDGs), which aims to bring nations together to build a better world for people and nature by 2030. The following topics were created based on consultation with industry experts.

Decent work & purchasing practices

What are major brands and retailers doing to improve conditions for workers within the company and their supply chains? For this topic, we look specifically at:

• Combating modern slavery and recruitment practices in supply chains

• Paying living wages to workers

• Purchasing practices and business relations with suppliers

• Unionisation and collective bargaining

Gender & racial equality

What are major brands doing about gender and racial equality? On this topic, we looked at:

• Gender and race breakdown of their own employees, considering data from different hierarchical levels

• Gender pay gap within the company and supplier facilities

• Race pay gap within the company and supplier facilities

• Actions focusing on promoting racial equality among employees

• Information about career development programs aimed at reducing gender and racial inequality

• Data on gender-related labour violations at supplier facilities

Sustainable sourcing & materials

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

• Information about how the company defines "sustainable raw materials"

• Strategies and progress for sustainable material management

• Strategies and progress on the reduction of using virgin plastics in textile and packaging products

• What the brand is doing to minimise the impact of microfibres

5. SPOTLIGHT ISSUES APPROACH

Overconsumption, waste & circularity

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

• How many items were produced in the reporting period

• How much textile waste is generated and how much was destroyed or recycled

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

• Strategies for take-back schemes and clothes longevity

• Investments in textile-to-textile circular recycling

Water & Chemicals

What are brands and retailers doing to reduce the use of hazardous chemicals and minimise their water footprint? Here we looked at:

• Strategies and progress on reducing the use of hazardous chemicals

• Water footprint in direction operations and in the supply chain

• Water risk assessments

Climate change & biodiversity

What are brands and retailers doing to combat the climate crisis and mitigate their environmental impacts? Here we looked at whether brands publish:

• Decarbonisation targets

• Science-based targets covering climate and other environmental issues

• Commitments and progress towards zero deforestation

• Evidence of the implementation of regenerative agricultural practices

• Carbon footprint in owned facilities and in the supply chain

• Renewable energy use in owned facilities and in the supply chain

• Absolute energy reduction in the supply chain

5. SPOTLIGHT ISSUES

RESULTS

CENTAURO

OLYMPIKUS

JOHN JOHN LE LIS BLANC LUPO MARISA PUKET ELLUS BESNI BROOKSFIELD CAEDU CARMEN STEFFENS CIA. MARÍTIMA COLCCI DAKOTA DEMILLUS DI SANTINNI DUMOND FÓRUM HAVAN KLIN KYLY LEADER LOJAS AVENIDA LOJAS POMPÉIA MARISOL MOLECA NETSHOES NIKE PENALTY SAWARY SHEIN SHOULDER STUDIO Z TNG TORRA TRIFIL

5% 5% 4% 4% 4% 4% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

TRACK&FIELD HOPE 9% 7% AREZZO AMARO PERNAMBUCANAS OSKLEN

20% 13% 13% 11%

ANIMALE ARAMIS HAVAIANAS HERING RIACHUELO DAFITI RESERVA DECATHLON

30% 28% 28% 28% 28% 27% 23% 21%

ADIDAS FARM 35% 32% MELISSA RENNER YOUCOM IPANEMA

49% 49% 49% 48%

ZARA C&A 57% 55% MALWEE 61% * The brands are ranked in numerical order out of a score of 82, but they are shown here as a rounded-up percentage. Where brands have the same score, they are listed in alphabetical order.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 76 SPOTLIGHT ISSUES

5. SPOTLIGHT ISSUES FINDINGS - DECENT WORK & PURCHASING PRACTICES

MODERN SLAVERY LIVING WAGES

disclose an approach to recruitment fees in the supply chain

no brand publishes number of workers being paid a living wage 23% 22% 7% 8% 2% 0%

publish data on violations related to modern slavery publish actions related to foreign migrant workers in suppliers

publish their commitment to ensure living wages to workers in the supply chain

PURCHASING PRACTICES UNIONISATION AND COLLECTIVE BARGAINING

no brand discloses their method for isolating labour costs in price negotiations

no brand publishes an example of a standard supplier agreement, establishing order types and terms and conditions for payments

publish the average number of days suppliers are paid after delivering orders

publish number of supplier facilities that have trade unions

publish number of workers covered by collective bargaining agreements

publish data on violations of collective bargaining and freedom of association in the supply chain

5. SPOTLIGHT ISSUES

ANALYSIS - DECENT WORK & PURCHASING PRACTICES

MODERN SLAVERY

According to Brazilian legislation, modern slavery is characterised by an excessive and forced overtime, degrading working conditions, forced labour with the violation of tworkers’ freedom and debt bondage.

According to a study developed by ILO, Walk Free Foundation and International Organization for Migration (IOM), there are 50 million people in a situation of modern slavery in the world, that is, one in every 150 people. The worsening of various crises - such as the COVID-19 pandemic, armed conflicts, and the climate crisis - has led to an increase in unemployment, extreme poverty and forced migration, contributing to the increase of the risk of all forms of slavery. The most affected are those who are already in a situation of greater social vulnerability, such as poor people, informal workers, women, refugees, and migrants.

Despite this worrying scenario, only 22% of the brands reviewed publish data on the existence of violations related to modern slavery among their suppliers. This result is

the same as that found by our survey last year and close to that found by the Global Index (24%).

The private sector has a key role to play in combating these practices by conducting due diligence and monitoring their supply chains. Brands must not shy away from discovering cases of exploitation that may be happening in their supply chain. Without identifying these cases, besides not being able to correct them, the brands themselves are exposed to market and reputation risks. Thus, greater transparency and traceability are essential for improving the working conditions in this sector.

Little transparency on the payment of recruitment fees

When looking for whether brands disclose their approach to recruitment fees in the supply chain, there was an increase of 13% to 23% since this indicator was included in the survey in 2020. Despite this

evolution, the disclosure is still low and only 7% of brands disclose the number of workers actually impacted by this practice. Furthermore, only 17% report whether interviews are conducted with workers to determine whether any fees have been paid by them for their recruitment process.

To understand how this happens, thirdparty recruitment agencies usually operate in the informal economy to hire workers, requiring them to pay fees to cover all the expenses related to their own hiring process. This procedure is illegal in many countries and workers are left in debt due to the exorbitant fees charged, which are often higher than the value of their wages. This dynamic enables the maintenance of degrading working conditions as, even after working for years, many workers are unable to pay the debts owed. This situation becomes even more problematic when the workers’ own visas are tied to those of their recruiters, who in such cases confiscate their passports, which tends to make an escape even more difficult. In 2021,

Transparentem revealed that 45 migrant workers from Bangladesh, Nepal and Indonesia had paid as much as $5,294 each in fees to gain employment in a Malaysian garment factory. That is the equivalent of 20 months of minimum wage pay in Malaysia.

The charging of recruitment fees is closely linked to the industry’s tendency to seek lower prices and shorter lead times, making its relationships with suppliers more unstable and precarious.

A good practice on this issue would be for brands to disclose that they are aligned with the “Employer Pays Principle” by the Institute for Human Rights and Business, which states that no worker should pay for a job and that all recruitment costs should be borne by the employer. Similarly, it is necessary to invest in meaningful, longterm relationships with suppliers and ensure workers’ freedom of association in their supply facilities.

Finally, considering that migrant workers are particularly vulnerable to the abovementioned practices, such as forced labour and debt bondage, it is worrying that only 4 of the 60 brands reviewed disclose their actions related to the regularisation of foreign migrant workers in their supply chain.

Check out the table on the side to see how brands' purchasing practices can directly affect working conditions.

The Covid-19 pandemic crystallised the challenges illustrated above like never before. As outlined in the 2021 Index, brands cancelled more than $40 billion in orders without payment and lowered the price paid per produced item of clothing, leading to devastating consequences.

78%

of brands do not disclose data on modern slavery violations in their suppliers

However, in the absence of bargaining power, it is difficult for suppliers to challenge terms that might be unfair to them or their workforce, often referred to as unfair trading practices. Suppliers often accept abusive commercial practices because they depend on the contracts they have with brands and they are aware that brands can transfer their orders to other competitor suppliers.

Stage of production cycle

Planning and forecasting

Purchasing practices Supplier response Impacts on workers

Sudden changes in order volumes

Delays in providing order specifications or approvals; last minute changes

Short lead times

Decreased ability of suppliers to plan the workload of their employees

Reduction in productivity

PURCHASING PRACTICES

Brands’ purchasing practices represent the way companies establish their commercial relationships with their suppliers. This process includes price negotiation and the definition of other contract terms, such as order placement deadlines and payment terms. These play an enormous role in enabling decent, dignified and safe work across their global supply chains.

This persisting power imbalance is reinforced by the absence of transparency of buyer and supplier relations. Only 12% of brands disclose supplier feedback on their purchasing practices. In addition, 17% of brands disclose their supplier payment policy with maximum stipulated terms and only 8% disclose the average number of days that purchase orders are actually paid in full after suppliers deliver the orders.

Cost & cost negotiation

Negotiate lower prices or ask for discounts

Managing the purchasing process

Order cancellation

Unwarranted penalties issued to suppliers to cut costs (i.e. asking for discounts)

Abusive, humiliating verbal abuse and forcing workers to work more quickly

> >

Restrict toilet, water and meal breaks

Potential to make more mistakes that can lead to accidents and injury

Disruption of family life

Increased vulnerability to stress, anxiety, fatigue, and disease

Gendered impact for women workers who need additional rest breaks during menstruation

Outsource/subcontract to smaller, low-cost units

Inability to invest in health and safety improvements for workers, including precautions against fire and other types of building accidents

Exploitative working conditions could thrive in hidden facilities, where workers may be left with little recourse to access remediation or compensation as difficult to establish links to lead firm

Workers could receive piece-rate wages

Increased likelihood of injuries and even fatal accidents

Inability to pay workers’ wages, having already fronted production costs like raw materials and labour

Increased vulnerability to stress, anxiety, fatigue, and disease

Debt to meet basic needs such as food, housing, education, medical assistance, etc.

*The information in the table is compiled with reference to data from Better Buying and Human Rights Watch.

Disclosure of the other indicators in this section is even lower, with only one brand publishing the volume of orders it places where wages and other labour costs are specified in the negotiation with suppliers. No brand discloses the method used to specify these costs.

This year, we also started to look at whether brands publish a responsible purchasing code of conduct and a standard, due diligence aligned supplier agreement template, thereby setting out the typical order and payment terms and conditions. In this regard, only 7% and 0% of brands disclose information for each of these indicators, respectively. A responsible purchasing code of conduct should be applicable to the areas of the brands in charge of purchasing. This code should include, as a minimum, guidance on the following points: due diligence; suppliers selection based on commercial and human rights standards; fair contract negotiation, including price agreements that cover the production costs; ongoing dialogue with suppliers, avoiding that commercial criteria undermine the human rights aspects; among others.

Probably due to the effects of the pandemic, there was increased public scrutiny towards brands’ purchasing practices through, for example, the #PayUp and #PayYourWorkers

campaigns. However, our findings show that brands still have a long way to go. There is a clear need for brands to engage and publicly disclose information about more responsible purchasing practices.

LIVING WAGES

Receiving a fair living wage is a fundamental human right which is recognised by the United Nations. It should cover the basic living costs of the worker and their dependents, including food, housing, education, health, transport, and savings for unexpected events. It is typically higher than the minimum wage and its estimated value varies according to its region. Methodologies to calculate a fair living wage are conducted and disseminated by government and international agencies, academic organisations, worker rights activist groups, and NGOs.

In Brazil, according to the National Research of the Basic Food Basket, which was conducted by the Inter-Union Department of Statistics and Socio-Economic Studies (Dieese), the value of a fair living wage in August 2022 would be R$6,298.91. This figure includes only the cost of basic food items for the well-being of a worker and their family (2 adults and 2 children) in the 27 state capitals of the country.

A large proportion of workers in the global fashion industry are not paid enough to meet their basic needs. Meanwhile, the business models of most companies favour maximising profit for shareholders, while workers in their value chains struggle to survive with dignity.

Despite the seriousness of this problem, most brands continue to lack transparency on this issue. Only 8% disclose their commitment to guarantee a living wage that covers the basic living costs of workers in their supply chain and 2% publish a measurable, time-bound strategy for guaranteeing this payment. In the Global Index, the scores were also low: 27% of brands disclose their commitment to ensuring a living wage for the supply chain and only 6% of brands publish a plan to achieve this goal. In addition, only 2 brands disclose the percentage above minimum wage that workers receive in their supply chain and none disclose how many of those workers receive a fair living wage.

Considering the importance of this topic, it is frustrating that, for another year, brands’ disclosure on the subject is almost non-existent. The results reinforce that voluntary measures alone are failing to drive progress in this sector.

In response to the need for the industry to be held accountable on living wages, Fashion Revolution, along with other movements and civil society organisations, have come together to launch a European Citizens’ Initiative called ‘Good Clothes, Fair Pay’. Launched on 19 July 2022, it demands ground-breaking living wage European legislation across the garment, textile and footwear sectors. We hope that this proposed new legislation will also impact Brazilian workers and serve as an example for similar advocacy initiatives in our country. To find out more about the campaign and how you can get involved, please click here.

We know that this issue is not simple to address and that achieving fair living wages across the supply chain is not easy for companies to implement. It is complex, challenging and requires systemic change and collaboration spanning brands, civil society and governments. However, it is achievable and its difficulty does not exempt brands from their responsibility.

UNIONISATION AND COLLECTIVE BARGAINING

Freedom of association, including the right of everyone to form and join trade unions for the protection of their interests is a cornerstone of democracy enshrined in a number of international agreements and national laws. This is a fundamental right because when workers have the freedom to unite to negotiate with their employers, they can representatively address issues that concern them thereby improving their working conditions. Examples of issues that are part of this agenda are wages, overtime hours, health and safety, maternity rights, and discrimination, among others.

The difference between the number of brands that publicly disclose a policy on freedom of association at supplier level (48%) from those that disclose procedures on this topic (32%) and the low score in this section suggests that brands take a passive role in ensuring an enabling environment for the true representation of their workers. Only 18% of companies disclose how many supplier facilities have independent, democratically elected unions, and 15% disclose how many workers in the supply chain are covered by collective bargaining agreements.

In addition, for the second consecutive year, no brand disclosed the number of collective bargaining agreements that provide the payment of wages higher than those required by local legislation for workers in the supply chain. In this regard, only 12% publish data on the violations related to these issues in their suppliers.

Although Brazilian labour law ensures freedom of association and collective bargaining rights, brands can hire workers outside the framework of the Brazilian Consolidation of Labour Laws (CLT) and in countries where the rights to freedom of association are not guaranteed by law. Transparency about freedom of association is especially important in these cases. Brands should put more effort into providing support for a real guarantee of this right for all workers in their value chain.

Trade union repression, which includes dismissal and violence against union workers and strikers, has intensified since the start of the pandemic. The COVID-19 pandemic is being used as an opportunity to dismiss unionised workforces and union leaders report that the pandemic has made it difficult to negotiate with employers and

recruit new union members. A striking example of the repression of workers is happening in Myanmar, where there was a military coup in February 2021. According to a report by the Business & Human Rights Resource Centre, there has been a significant increase in labour and human rights abuses suffered by workers in the local fashion industry since the takeover. A tool created through a collaboration between industry partners has made it possible to track more than 100 cases of allegations of abuse with 60,800 garment workers in the region. These workers are employed in about 70 factories that supply or have recently supplied major global fashion brands and retailers, including some reviewed in this report.

This case highlights the importance of freedom of association and raises questions about the ability of brands to act responsibly and conduct human rights due diligence processes that actually protect workers in their supply chains.

"What humanity faces is not just an environmental, economic, social, geopolitical, institutional and civilizing crisis. These crises are part of a whole. It is impossible to solve any one of them without addressing all the others together. They feed back. Onedimensional strategies will not be able to solve this systemic crisis."

Pablo Solón, Writer and Environmental Activist

5. SPOTLIGHT ISSUES FINDINGS - GENDER AND RACIAL EQUALITY

GENDER EQUALITY

publish career development programmes for women publish gender breakdown of job roles in the company publish the company’s gender pay gap no brand publishes the gender pay gap in suppliers’ facilities

RACIAL EQUALITY

publish actions focusing on promoting race equality publish career development programs for black employees publish the race or colour breakdown of job roles of their own employees

no brand publishes the company’s ethnicity pay gap

publish data on gender-based violations in supplier facilities no brand publishes the ethnicity pay gap in suppliers’ facilities

5. SPOTLIGHT ISSUES ANALYSIS - GENDER AND RACIAL EQUALITY

GENDER EQUALITY

Greater participation of women in leadership positions is necessary beyond simply

closing the representation gap

Although there is a marginal increase in disclosure for the indicators related to gender equality, progress towards a more equal fashion industry is slow and the level of disclosure found in this year's Index shows that there is still much to be done. The data show that despite a slow increase in disclosure changes are actually happening. Among the 60 brands reviewed this year, 22% advertise career development programmes and growth opportunities for women, an increase of 6 percentage points compared to 2021.

When we look for data regarding wages, only 17% publish the pay gap between women and men within the company, 5 percentage points more than in the previous year. For companies publishing gender pay gaps at their suppliers' facilities, the percentage remains zero. This means

out of the 60 brands reviewed by the Index this year, none disclose this type of information at the supply chain level. Without information on transparency, it is impossible to set targets and make plans to bring about the necessary changes.

According to data released by IBGE, in a report that reviews gender statistics and social indicators related to women in Brazil, we can see that although women have a higher level of education than men, they occupy fewer management positions, only 37.4%. In addition, women have considerably lower incomes than men, especially when we analyse positions of directors, managers, science professionals, and academic intellectuals.

However, it is important to note that the lack of women in leadership positions is not unique to the fashion industry. According to Agência Brasil, "among the 423 companies currently listed on Brazilian Stock Market (B3), around 60% have no women among their statutory directors and 37% have no women on their boards." The lack of female representation happens in all sectors of the economy and highlights the urgency

of addressing this issue and creating programmes so that more women can reach leadership positions. To achieve our commitments towards a more sustainable society, it is imperative to have more women and more diversity in leadership positions of companies across all sectors.

All this becomes even more urgent when analysing actions adopted towards gender equality at suppliers' facilities. Only 5% of companies disclose actions focused on promoting equality between men and women among their suppliers. In addition, only 10% disclose data on the predominance of labour violations related to gender among their suppliers - despite studies, such as Women in the Clothing Sector - a study on gender and working conditions in the fashion industry, indicating that women are more vulnerable to precarious situations and rights violations.

A greater participation of women in leadership positions is necessary not only to close the representation gap, as evidenced by the IBGE report, but also to considerably increase the chances of formulating effective actions for equity and

protection against abuse and harassment against women. As well as the importance of promoting access to equal opportunities in the labour market for the female public.

RACIAL EQUALITY

Slow progress on racial equality indicators despite the urgency to address racial inequality

In this year's survey 32% of companies disclose their actions focused on promoting racial equality among their employees, an increase of 8 percentage points compared to 2021. The number of brands that publicly disclose information on the ethnicity breakdown of their own employees, considering the different hierarchical levels, is also progressing gradually over the years. This year, 15% of brands disclose this data compared to 12% in 2021.

Despite the slight progress in these indicators, the speed of improvement is still very slow considering the urgency of

the issue. Brands have an important role as catalysts for change and need to be more transparent and active in tackling ethnic inequality across the value chain.

According to Silvio Almeida in his book Structural Racism, "in a society where racism is present in everyday life, institutions that do not actively address racial inequality as a problem will easily reproduce racist practices already seen as 'normal' throughout society".

Therefore, it is important that brands are actively fighting racism and that, besides their inclusion practices, they also disclose information about career development programs aimed at reducing inequality and promoting growth opportunities for Black employees. Among the brands reviewed, only 4 (7%) disclose this information, reinforcing that there is still a long way to go to create internal environments where all employees can have representation and a sense of belonging.

Regarding the ethnicity pay gap, a study by the National Bureau of Economic Research found that non-white professionals performing the same function as white employees are more likely to receive lower salaries. Nevertheless, for another year, no company discloses the ethnicity pay gap in its workforce.

When looking at information on these issues at the suppliers' facilities, transparency is almost non-existent. None of the brands disclose the ethnicity pay gap among workers in their supply chains and only one discloses actions focused on promoting racial and ethnic equality at supplier facilities.

In a country where the Black population accounts for more than half of all Brazilians (55%), it is worrying that few brands are transparent about the racial equality indicators analysed.

and creative director

“People of color in this country are invisible.

Knowing where they are, what role they play and how they operate within the industry, taking them out from under a veil of invisibility, makes us face reality with the aim of transforming it.”

Rafael Silvério, fashion designer

VIEWPOINT: DIVERSITY, EQUITY AND BELONGING

Social dialogue as a tool for transformation and generation of opportunities for career growth for black employees.

RACE AND DIVERSITY COMMITTEE OF FASHION REVOLUTION BRASIL

BY PALOMA GERVASIO BOTELHO, COORDINATOR OF THE COMMITTEE AND MAUROÁ SPINELER, MEMBER OF THE COMMITTEE

Imagine you are participating in a selection process for a job opening at a company that promotes equity and diversity as part of its institutional values. In this promising environment, you are competing among qualified professionals, just like you, with the only obvious difference between your skills and those of the other participants: your black skin.

This text is about the difference between the discourse and the practice on plans to promote equity and diversity, present or absent in the multiple professional spaces of the Brazilian fashion market. It also presents path possibilities, organisational structures and strategic seams to promote effective changes in these aspects for the benefit of a more creative, productive and profitable corporate environment.

According to data from Think Etnus, which illustrate the economic, political and social importance of the black population, “of the 209 million Brazilians, currently, 56% are black, according to the IBGE. In 2018, amid the economic crisis that hit the country, the black population spent BRL 1.7 trillion, which is equivalent to 24% of Brazilian GDP. In addition, we estimate that by 2027, black people will represent

6 out of 10 Brazilians”. In this context, it is valuable to remember of one of the symbols of union, resistance and cultural strengthening of the activist struggle of organised civil society, which contributed to the collective advancement of the Brazilian black community through an active and autonomous economy: the greengrocers and sellers of the 18th and 19th centuries were enslaved or freed black women who sold meat, flour, fruit, textiles, amulets, sweets and a multitude of other genres through the streets. Many of them became successful, guaranteed the livelihood of the family and ensured better living conditions for future generations (SCHUMAHER; BRAZIL, 2013).

Centuries after the greengrocers –entrepreneurs and leaders among their peers – statistics do not seem to change: white women earn 30% less than white men, black men earn less than white women, and black women earn less than everyone else. In Brazilian companies, black people occupy less than 5% of executive positions, according to IPEA data. The reality of the heirs of the country's first female entrepreneurs is perpetuated in invisibility and non-recognition.

The Fashion Transparency Index raises awareness for companies on urgent issues such as climate, gender and race, however, most are unaware of or ignore the issue of transparency. When we delve into racial issues within organizations, it is not surprising to see a single black person in a subservient role on their staff. Racial equity must be part of the quality indicators, not as a mere marketing asset by a “savior” company, but as a way of valuing and strengthening diversities. Within companies, we already see racial and diversity committees working in the process of hiring, training and accelerating leadership, but still very few brands are transparent about these indicators.

What is expected of Brazilian companies, in addition to standard practices – such as a training system, qualification and career plan – is also: constant actions and evolution of inclusion and diversity plans. In this logic, the company that has affirmative actions without real applicability committed to the anti-racist agenda is inefficient. For an organisation to become more equitable, it is important, above all, that in addition to inclusion, everyone feels that they truly belong to

the company; it is essential that black employees are valued for their own mind, experiences and talents. Diversity is also expanding voices beyond the aesthetic representation in advertising campaigns, catwalks and magazine covers. A powerful way to transform discourse into practice is to use social dialogue as a tool and give new meanings to organisational structure relationships in involvement and sharing, as Nêgo Bispo, Quilombola writer from Piauí, says. In this way, one of the actions needed is to hire the consultancy of groups formed by “young people, teachers, intellectuals and black artists who work with the concept of quilombo as a territory of memory, resistance, cultural strengthening and need to be supported by public policies. and diversity and equity programs carried out by organisations” (BENTO, 2022).

“I see that most major companies are still not open to talk about the race issue. They want our money, but they don’t want to see us. They don’t want to put a black man from favela as the protagonist of their collections, for example.

We only see representation on specific dates: In June, they use the rainbow for Pride Month; in November, they talk about black people, about their fight against racism. Looking at the social, gender and race aspects is something that must be done throughout the year and with great responsibility. It’s about understanding that, if you want to communicate with that audience, you have to at least understand their reality.

Brands must have this social approach, a better understanding of local realities, promote actions and events, bring people in who are from these communities who can serve as ambassadors and talk to them. For example, who are the MCs in this place? Let’s sponsor them. Let’s create marketing campaigns with people from this community. Let’s finally give these people a voice. It is about really being there, inside these regions, understanding their reality and somehow supporting positive socio-economic impacts within these neighbourhoods.

The geographer Milton Santos talks about cities’ two circuits, which is the relationship between large companies and small ones. We must not forget that they all go together, that is, when the large company helps the small ones, the major company also grows.

Sustainability is also about promoting a good socio-economic impact within our country, generating more employability, appreciation, visibility, and inspiration. We live in the poorer areas, but it is possible for us to change our reality. It starts with us and with our dreams”.

WILL DA AFRO CEO AND DESIGNER OF AFROPERIFA

5. SPOTLIGHT ISSUES FINDINGS — SUSTAINABLE SOURCING & MATERIALS

SUSTAINABLE MATERIALS

disclose data on the types of fibres sourced annually

publish a time-bound, measurable sustainable materials strategy

publish annual progress on sustainable materials targets

explain how they define so-called 'sustainable' materials

PLASTICS AND SYNTHETIC MATERIALS

publish targets to reduce the use of textiles deriving from virgin fossil fuels

publish annual progress to reduce the use of textiles deriving from virgin fossil fuels

publish targets to reduce the use of packaging deriving from virgin plastics

publish what the brand is doing to minimise the shedding of microplastics

5. SPOTLIGHT ISSUES

ANALYSIS — SUSTAINABLE SOURCING & MATERIALS

SUSTAINABLE MATERIALS

Raw material production and processing are responsible for significant environmental impacts in the fashion industry. The issues vary depending on material type, but over 70% of garment carbon emissions come from activities associated with the raw materials.

The report Fashion Threads: Systemic Perspectives for Circularity provides an overview of the environmental impacts of the most used fibres in the industry. According to the study, conventional cotton is responsible for 10% of the total volume of pesticides used in Brazil, being the fourth crop in pesticide consumption in the country. Polyester, on the other hand, is made from a non-renewable fossil fuel and releases microplastics during its use and washing. Viscose, in turn, is produced using hazardous chemicals and may come from wood linked to the deforestation of native and endangered forests.

Considering these impacts, brands need to be more transparent about what materials they use in their products. Among the brands reviewed, only 23%

publish the quantities of the different types of fibres they use each year. In addition, only 22% disclose measurable and time-bound targets for sustainable materials management and 15% publish annual progress towards these targets.

When brands claim that a certain product or collection is sustainable, this claim must be made based on reliable data and processes and this information must be publicly available. Yet only 28% of brands disclose which tools are used to define materials as sustainable. Although the results are still low, this indicator had the greatest evolution among the 252 indicators analysed by the Index this year, with an increase of 14 percentage points (from 14% in 2021 to 28% in 2022).

While it is encouraging to see the growth of this indicator, it is important that more and more brands are transparent about why they consider a material sustainable. This transparency helps to avoid cases of greenwashing - when certain materials are sold as sustainable without their real impacts having been considered. In addition, transparency on

the methodology used to define whether a material is sustainable can help hold brands to account and ensure their claims are accurate.

Data from the European Commission and the UK regulator Competition and Markets Authority (CMA) show that some fashion brands and retailers exaggerate their sustainability credentials, without presenting consistent practices and outcomes, based on reliable methodologies and references. To address this, the European Union is currently working on two new pieces of legislation to prevent greenwashing and ensure the reliability of sustainability practices and claims.

We hope that the new legislation will provide an adequate basis to fight greenwashing and that its effects will also impact brands operating in Brazil. In addition, we also highlight the need for creating and promoting reliable and comparable studies and tools on the socio-environmental impacts of fibres at international level.

PLASTICS AND SYNTHETIC MATERIALS

Synthetic fibres were estimated to account for a range between 62% and 69% of the total global fibre market in 2020. They are made from polymers derived from petroleum and have polyester as its best known and most widely used synthetic fibre. The growth in polyester production is intimately linked to the exponential increase in clothing production, as overproduction is made possible by the existence of a cheap raw material.

Although there is increasing information about the negative impacts of these fibres and their link to the climate crisis, only 15% of brands publish measurable and time-bound targets to reduce their use of fossil fuel-based textiles. Although these figures are low, there was an increase compared to last year's results, when only 8% of companies disclosed their targets. Among these brands, only 8% publish annual progress towards this reduction.

We also try to identify whether companies publish information on the use of virgin plastics in their accessories, hangers, and packaging. Among the brands reviewed, 1/5 publish measurable and time-bound targets for reducing the use of such

plastics in packaging and 15% disclose annual progress towards achieving these targets. These results show that regarding this topic the brands operating in Brazil are less transparent than those reviewed by the Global Index. In the Global Index, 45% of brands publish targets for reducing their use of virgin plastics and 36% disclose their annual progress.

Several companies focus their sustainable materials strategy on the use of recycled polyester, considering that this is a quick solution to a complex problem. Rather than solving the challenge, this may encourage the consumption of virgin plastics and disposable products so that they can later be recycled into new products. In addition to this problem and other issues related to it as listed by Changing Markets, recycled polyester does not prevent the shedding of microplastics. Therefore, it is important that brands are critical about using this material as the only way to introduce sustainable materials into their collections.

Every time we wear, wash, and dispose of our clothes they release microfibres. Synthetic fibres are already one of the main sources of microplastics in the oceans, accounting for 34.8% of the global total. In Brazil, researchers from the Federal University of Pará have found microplastics in up to 30% of fish in the Amazon and Xingu rivers.

And yet, less than 10% of the brands reviewed disclose their strategies for addressing this problem. Brands need to invest in research and solutions to minimise the impacts of microplastics and they need to be transparent about these initiatives, sharing good practices that can inspire other businesses.

Only 4 brands out of the 60 reviewed (7%) disclose what they are doing to minimise the impact of microplastics

Image: Alex Bamford

VIEWPOINT: SUSTAINABILITY NEEDS TO TRANSITION FROM THE MARKETING DEPARTMENT TO THE

OTHER LINKS IN 1THE FASHION PRODUCTION CHAIN

JULIA CODOGNO FASHION AND SUSTAINABILITY COMMUNICATOR AND CO-CREATOR OF THE RETECENDO PROJECT

When we talk about a sector supported by constant productivity - in terms of the volume of items, high profitability, and severe exploitation of the environment - the pressure for better practices has been growing and igniting discussions about more effective strategies. This path is too narrow for an operating system which was implemented so many years ago and that shows so little willingness to implement significant transformations.

It is a comfortable environment for those who are used to creating good (and convincing) narratives at the expense of the famous win-win. After all, why change internal structures when we can just make it look like we have changed them?

Currently, the popularity of concepts, such as sustainability, eco-friendly, awareness and many others, is growing and helping to design labels, create advertising campaigns and saturate the social media timelines of different segments, thereby occupying a special place in powerful and influential market corporations.

According to a survey conducted by Condé Nast between 2020 and 2021, sustainability is relevant to 69% of its

audience. For most of these readers, the implementation of it by companies they already consume products from is even more important. In practice, this could bring more opportunities for established brands in the market to experiment with ‘greener’ activities and secure their ‘reliable’ status among their consumers.

It is worth remembering that a survey by the Akatu Institute, which was conducted in 2018, showed that at least 68% of those interviewed said they had heard about sustainability, but around 61% could not say what a sustainable product is.

The first edition of the Trend Report, promoted by Instagram - one of the most used social networks in Brazil - also highlights that among the most searched hashtags are the following: #shopsmall #shoplocal #sustainablefashion.

The same report says that, for most young users, influencers are seen as important promoters of products and services. Therefore, digital platforms make more sense than other traditional media vehicles. Not coincidentally, we are experiencing a boom in investments being focused on content co-creators and a rampant search for

that famous place in the sun. These factors highlight how vulnerable we are to well-crafted speeches that are diluted in brief 30-second videos. After spending just a few minutes on a mobile phone, we are bombarded by incredibly plastic and seductive posts, signed by the personalities of the moment and altruistic speeches.

When we turn our attention to fashion brands, it is not uncommon, for example, that several of them do not correctly identify the composition of their products, their origin, manufacturing conditions or the search for more responsible practices. These brands abusively deploy subjective terms such as “lower impact material” or “smarter raw material”, appropriating a twisted or unfamiliar vocabulary.

This whole scenario also raises an important issue for the possible regulation of best practices: the certification market. According to the License to Greenwashing study, the stamps currently circulating may not be the best way of validating that something is going right. This is because, in some cases, these are private companies “certifying” other private companies which may

have their integrity compromised due to third-party interests. We can also highlight the fact that some of these CEOs transition between different positions and can easily advocate in their favour.

But where are we going? Recently, the Ethical Fashion Legislative Agenda showed that legislations and inspections more connected to everyday problems can lead to a more assertive scenario. Through state intervention, they can help take such well-articulated discourses beyond ad campaigns in order to make an impact on real life.

This may be the beginning, but not the end, of a truly more transparent journey driven to transcend the status quo, where civil society is protected by rights and duties, and private society is properly held accountable to cover its responsibilities.

FINDINGS — OVERCONSUMPTION, WASTE & CIRCULARITY

PRODUCT VOLUME & BUSINESS MODEL

25%

disclose the overall quantity of products made annually

WASTE AND RECYCLING

disclose data on the quantity of products made annually in Brazil

offer new business models that slow consumption

offer repair services to increase clothing longevity

offer circular solutions, which allow pieces to be recycled (in addition to reuse or downcycling)

30% 22% 5% 23% 7% 18% 12%

disclose % of products designed to enable closed loop

disclose the amount of pre-consumer waste reused

disclose how they provide permanent in-store take-back schemes 22% 17%

disclose the number of items destroyed during the year

23%

disclose what happens to clothes received through the take-back schemes 25%

5. SPOTLIGHT ISSUES

ANALYSIS — OVERCONSUMPTION, WASTE & CIRCULARITY

Overconsumption, waste & circularity

Overproduction, overconsumption, and waste continues to be a growing challenge caused by the global fashion industry’s linear model where materials are extracted, made into products, and ultimately either sent to landfill or incinerated when no longer used. In Brazil, the apparel industry is estimated to produce approximately 8 billion products in 2021. With garment production volumes growing by 2.7 percent annually and less than 1 percent of products recycled into new garments, brands must be transparent about the amount of products and waste produced, as well as their efforts towards diminishing and circularity.

helping to track the evolution of this data across the years. Among the brands reviewed by the Brazilian Index, 25% disclose their annual production figures. On the Global Index, this percentage drops to 15% (38 out of 250 brands).

Other relevant data to be publicly disclosed is the percentage of the brands’ production that is carried out in Brazil. This information enables a better understanding of the participation of national suppliers over international ones in the total amount produced. This year, about 30% of brands disclose this information.

Few

Big brands publicly disclosing their annual production volume leads to a better understanding of how much is produced by the industry. This is the only way to understand the true scale of overproduction in more detail and while

Another pressing problem in the fashion industry, intrinsically linked to overproduction, is waste generation. Clothes and other textile waste pollute many parts of the planet. In Brazil, just

in the Brás and Bom Retiro regions of São Paulo alone, it is estimated that the equivalent of 63 tonnes of fabric waste is generated every day. Other materials are found among the remains of textile products, such as broken needles, threads, cardboard tubes, kraft paper used in moulds, plastics, etc.

When looking at the public disclosure of data on the brands’ pre-production waste (offcuts, scraps, yarn, and end-of-roll fabrics), only 18% of the brands disclose this information. This number drops to 12% when we look for post-production/ pre-consumer waste, such as overstock, samples, and defective pieces. In addition, 22% publish the amount as a percentage or in tonnes of how this waste is reused - usually through upcycling, resale, and recycling into new fabrics or energy generation use.

We also analysed whether brands disclose how much of their products are destroyed annually. Among the brands reviewed, 17% disclose this data - an increase of 7 percentage points in comparison to the 2021 results.

The destruction of garments is usually associated with incineration and can happen as a way of maintaining the exclusivity and value of the brand. This practice is a clear indication of brands’ inefficiency and overproduction, as it is cheaper to burn products than to produce less.

Low transparency regarding the types and quantities of waste generated and how it is handled by brands can undermine the effectiveness and impacts of solutions such as circularity initiatives.

Among the brands reviewed, 23% disclose how they make permanent take-back schemes available for returning garments in their shops and 25% disclose what happens to the clothes they receive. Such initiatives generally involve collection bins in which consumers can deposit items

Only a quarter of the brands reviewed disclose their annual production volumes

brands disclose data on the amount of waste generated in their production

Brands release more information about their take-back schemes than repair services

5. SPOTLIGHT ISSUES

ANALYSIS — OVERCONSUMPTION, WASTE & CIRCULARITY

they no longer use. Typically, unwanted clothes are forwarded to third parties, either through online clothing resale platforms or donations to NGOs, bazaars, and vulnerable populations.

The founder of The OR Foundation, Liz Ricketts, reported in the 2021 Index that, strangely, brands disclose more information about offering clothing takeback schemes than about repair services. This year, only 3 brands (5%) disclosed that they offer repair services that can extend clothing longevity and slow down the consumption of new pieces. This data may indicate that many brands transfer responsibility for the products they create to consumers, avoiding being held accountable for the excessive consumption patterns they encourage and normalise.

Another way to slow the consumption of new clothes down is by creating new business models that foster garment longevity. Just over 1/5 of brands (22%) disclose information on the implementation of systems such as renting and reselling.

Transparency on circularity is still low among the brands reviewed

A growing number of major brands explain how they invest in circular solutions, going beyond reuse or downcycling, and enable garment recycling - from 18% in 2021 up to 23% in 2022. However, only 7% disclose the percentage of their products designed to enable circularity.

The Ellen MacArthur Foundation defines the circular economy as having based on the three following principles: eliminate waste and pollution, keep products and materials in use and regenerate natural systems. Circularity is about changing the current production model and not just about using recycled materials. Investing in circular solutions which disregard the slowing down of the production of new clothes signals a greater commitment by companies to try to profit from the problem rather than to actually address it.

"Circularity is about regenerating natural systems, about thinking on the correlation of species, their exchange systems and the benefits this can

Alice B. Schuch, Founder of Cirkla Moda

bring in all spheres."

VIEWPOINT: TRANSPARENCY AND ACCESSIBILITY OF INFORMATION IN THE FASHION

As a key component of the industrial revolution in the UK, textiles have been the driving force behind several globalising movements (either positively or negatively) from the interest in exchanging goods in Mesopotamia to the colonization processes in the 1500s and the exploitative practices we can observe today. People need to dress a certain way in order to ‘fit in’, to showcase their personality and to ascertain power, regardless of cultural or geographic background (other cultures might use scarification, neck/nose rings, piercings and tattoos to the same purpose).

The main purpose of the circular economy is to decrease the use of linear practices, where resources are used and discarded, and embrace alternative uses within a value chain (for instance using waste as the ‘raw’ material for a new product). The NEW COTTON PROJECT, was developed using an innovative solution which produces cotton-like fibres using cotton-rich discarded garments, beddings, etc.

In my research we decided to implement a circular ecosystem between 12 partners at all levels of the textile value chain, creating together products which are part of an infinite loop and close to a zero-waste production. This reality is strongly supported by the European Commission and its policies for its clear benefits for the fashion industry through their ability to collaborate with other enterprises and generate new jobs, knowledge, and opportunities.

From a triple bottom-line perspective, circular economy (if done purposefully) responds to the three dimensions of sustainability: economy, environment, and society. It is important here to highlight that Circularity and Sustainability are not exchangeable terms, a circular project can be sustainable, but that’s not mandatory as the main directive for circularity is closing the resource loop. However, in countries such as Brazil and other developing economies, circularity has been approached as an empowerment tool which connects enterprises and communities to

create sustainable circular initiatives embracing local know-how to extend the resource’s lifespan.

So why should you (fashionista/ curious reader/arduous consumer) care about all of this?

To close the resource loop, waste should be avoided, and within a circular economy, waste is considered a design error. To accomplish successful circular initiatives, we should promote consumer engagement. By raising awareness on material choice and positive environmental and social impacts, consumers may shift their consumption to reflect their values and favour products made using circular design principles.

Furthermore, being able to design products and processes which assist companies on designing products that meet consumers’ needs and fit their lifestyles, can directly influence the flow and usage of resources. Repurposing waste flows by using spare materials and by-products from other production

processes is also an alternative that gives these resources a new life. And for these to work, one of the things we need is an engaged consumer who recognizes their place in the value chain. Consumers can play a critical role in supporting circular designs by demanding greater transparency and accountability from brands.

To magnify the impact of the circular economy in the textile industry, transparency and collaboration are encouraged. By reporting accessible and easily understandable data, brands can reach a broader public and guide circular consumption behaviour. By collaborating with suppliers, designers, brands, competitors, they can help set the tone for this new economic model, where information is widely available.

Is that the solution to all ailments in the industry? Not at all. But you can be part of this transformation.

* The New Cotton Project is a project sponsored by the European Union’s Horizon 2020 programme on research and innovation under grant agreement 10100559.

INDUSTRY ARE NOT ONLY POSSIBLE BUT SHOULD BE USED TO RAISE CONSUMER AWARENESS ABOUT THE CLOTHES THEY ARE WEARING

NATALIA GUIMARAES MOREIRA POSTDOCTORAL RESEARCHER AT AALTO UNIVERSITY FOR THE NEW COTTON PROJECT *

5. SPOTLIGHT ISSUES

FINDINGS - WATER & CHEMICALS

WATER & CHEMICALS

8% 8% 10%

publish time-bound commitment to eliminate hazardous chemicals

publish progress towards eliminating hazardous chemicals

publish wastewater test results from the supply chain

publish annual water footprint in company’s own facilities publish the water footprint of the processing facilities publish annual water footprint at raw material level

5. SPOTLIGHT ISSUES ANALYSIS - WATER & CHEMICALS

Despite increase in water scarcity and pollution, scores decreased in most water and chemical indicators

In 2022, there was a decrease in the disclosure of topics related to water and chemicals reviewed by the Index. Out of the 60 brands reviewed, only 10% publish effluent test results from their suppliers, which is a decrease of 2 percentage points compared to 2021. Regarding the annual water footprint of companies' own facilities, this year, 27% of brands disclosed this information compared to 30% last year. The number is even lower when it comes to suppliers: 7% disclose the water footprint at the processing facilities and only 2% publish at the raw material level. As the fashion industry uses water in several of its production processes, this lack of transparency is worrisome. It also reinforces the importance of the fashion industry implementing goals and actions in order to mitigate problems related to water use.

The level of disclosure in this section is even more worrying given the national context. In Brazil, according to the data released by Trata Brasil, almost 100 million Brazilians do not have access to basic sanitation. Furthermore, according to a Mapbiomas survey, the caatinga, a Brazilian biome with a large predominance in the northeast part of the country, "has already lost 40% of its mapped natural water surface area in the last 35 years". In addition, the São Francisco river, which covers the southeast and northeast regions of the country, has already lost 50% of its natural water surface area. There are factories and plantations in the country's fashion industry in the regions mapped out by these studies.

According to Cetesb ''the differences registered between developed and developing countries are shocking and show that the world water resources crisis is directly linked to social inequalities". The lack of transparency and information flow along the supply chain aggravates these problems. Brands should trace all their supply chains to address recurring

social and environmental impacts caused by water pollution on their garment workers, the local communities as well as the surrounding natural environments.

To meet the targets proposed by the UN's Sustainable Development Goals (SDGs), including those related to SDG 6 on drinking water and sanitation, brands need to disclose their data, set well-defined targets and publish progress towards achieving them. This can minimise the quantity of chemicals released into the environment and improve water use efficiency.

Use of harmful chemicals

The textile supply chain involves several processes in which chemicals are used. Some of these processes are washing, dyeing and bleaching, among others. Recent studies indicate that there is a possible link between some types of cancer and the activities of workers along the fashion production chain. These workers are often exposed to various chemicals and face the risk of inhaling hazardous chemicals used for both synthetic and

natural fibres fibres, among other issues. Thus, it is paramount that brands are committed to setting targets to eliminate the use of products that may be harmful to people's health and to the environment. However, only 8% of the brands reviewed disclose a commitment to eliminate hazardous chemicals, as proposed by international standards such as ZDHC and Bluesign.

The lack of transparency along the supply chain makes it difficult to monitor the reduction and elimination of the use of hazardous chemicals and can exacerbate the problems related to the use of these substances, distancing us from a fashion industry that is safe for all the involved parts. Brands need to track their entire value chain to address the social and environmental impacts that may arise, such as water pollution, workers' health, local communities or the natural environment around their chain operations.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2022 96 SPOTLIGHT ISSUES

SPOTLIGHT ISSUES

DECARBONISATION, DEFORESTATION AND REGENERATION

13%

publish a measurable decarbonisation commitment

publish their progress towards decarbonisation publish what is included in the company's Scope 1, 2 and 3 emissions

CARBON EMISSIONS ENERGY USE

10% 28% 0% 0% 5% 33%

publish annual carbon footprint in the supply chain

no brand publishes a measurable commitment to zero deforestation

no brand publishes its progress towards zero deforestation

brands disclose evidence of implementing regenerative farming practices publish annual carbon footprint in their own operations

publish data on renewable energy use in the supply chain 28% 18% 0% 33% 8%

publish annual carbon footprint at a raw material level

no brand discloses absolute energy consumption reduction data at suppliers

5. SPOTLIGHT ISSUES

ANALYSIS - CLIMATE & BIODIVERSITY

Due to the complexity of the fashion value chain, it is very challenging to determine the exact value of the sector’s greenhouse gas emissions. However, it is estimated that this industry is responsible for 4% of total global emissions. The fashion industry can harm the environment in many ways if it is not operated properly.

From the way materials are produced and turned into products, to the logistics of the garments around the world, to the way we buy, care for and dispose of what we use.

Beyond commitments and initiatives to decarbonise their products and operations, brands need to look at how the impacts of the climate crisis affect their suppliers, their respective families and communities. Women, for example, account for about 80% of the fashion industry’s workforce and they are, together with the elderly, indigenous peoples and low-income people, among the most vulnerable groups to the effects of the climate crisis. An ILO study has indicated how the increased effects of climate change may have an impact on the increase of harassment and violence against women workers in the garment

sector. As climate change can lead to increased socio-economic vulnerability, this tends to increase the occurrence of cases of gender-based violence.

Therefore, there is no climate justice without social justice. Brands cannot guarantee the real reduction of their climate impacts if they do not address this issue along the whole supply chain. Despite the climate emergency, the majority of reviewed brands show little transparency on topics related to climate and biodiversity.

Disclosure of carbon emissions and energy use data

Transparency on greenhouse gas (GHG) emissions data is crucial for brands and retailers to reduce their emissions and be monitored by their stakeholders if they are meeting their decarbonisation targets. Among the brands reviewed, 33% publish the carbon footprint of their own facilities.

As most emissions occur at the raw material production and product manufacturing stages, it is encouraging to see growth in the number of brands publishing their carbon footprint at the processing level compared to last year - from 18% to 28%. In addition, 18% of brands now publish their GHG emissions at the raw material level, which is up from 10% in 2021. For brands to accurately measure their climate impacts, it is important that carbon emissions tracking happens across the supply chain, including at the raw material level.

It is also important to note that there is a significant difference between the disclosure of the carbon footprint of the brands reviewed by the Brazilian Index and the Global Index. Among the 250 major brands and retailers reviewed globally, 65% disclose the carbon emissions of their own facilities, 34% at the processing level and 26% at the raw material level.

When reviewing whether companies disclose the percentage of energy used that comes from renewable sources, a similar pattern was identified throughout

the report, brands tend to disclose more information about their own facilities than about those of their suppliers. While 33% disclose the amount of energy from renewable sources in their administrative headquarters, retail shops, distribution centres and warehouses, only 8% disclose this information in their supply chain. In addition, no brand discloses data on the absolute reduction in energy consumption at its suppliers.

Part of the difficulty for brands to capture carbon and energy footprint data in their supply chain may be related to the fact that suppliers work simultaneously with multiple brands and may not have the infrastructure to collect data individually from each one. Therefore, it is common for companies to rely on estimates to publish carbon and energy data.

Few brands disclose the decarbonisation commitments that cover their entire value chain

The Paris Agreement is a global treaty aimed at reducing global warming. Under it, national governments have committed to limiting the global temperature increase to below 2°C and pursuing efforts to limit the temperature increase to 1.5°C. Companies play a key role in meeting these commitments. Science-based targets provide companies with a clearly defined pathway to reduce greenhouse gas (GHG) emissions in line with the Paris Agreement. Only a fifth of the brands reviewed (20%) publish targets approved by the Science Based Targets Initiative - SBTi, covering their own operations and all or parts of their supply chains.

Due to the difficulty of understanding what each brand considers within their scope 1, 2 and 3 emissions, we added a new indicator this year that seeks to identify whether they publicly disclose what is included in each of these scopes. According to the GHG protocol, scope 1 emissions are direct emissions from owned or controlled sources, scope 2 emissions are indirect emissions from the generation of purchased energy and scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the company’s supply chain. Scope 3 is split into various categories. Purchased goods and services account for all the emissions that come from producing raw materials to processing

fibres and making the clothes we wear. Transparency on this indicator is important because it allows us to analyse what brands really include in their greenhouse gas emission reduction targets. Despite this, only 28% of brands disclose this information.

In addition, only 13% of companies publish a measurable decarbonisation commitment. To score on this indicator, this commitment must cover scopes 1, 2 and 3, that is, the brand’s own operation and its supply chain. These figures should also be aligned with and be verified by SBTi. Among these companies, only 10% disclose their measurable progress towards decarbonisation.

A tangible incentive for companies to mitigate their impact across the supply chain, and allocate appropriate financial resources to do so, is to assess the environmental impact and risks regarding the financial costs of the business. An example of this would be measuring a brand’s environmental footprint and translating that data into monetary value. This type of disclosure can be found in the Carbon Disclosure Project (CDP) questionnaire - a non-governmental organisation that awards grades to the performance of companies, cities and states based on the disclosure of their risks and potential impacts on the environment. Despite this, only 4

brands (7%) publish a report that directly demonstrates their environmental footprint in their financial statements, following methodologies such as those proposed by Environmental Profit & Loss (EP&L).

Taking a stand and acting against deforestation is even more crucial and urgent for brands operating in Brazil, since the rate of this practice has skyrocketed and already impacts all national biomes. In 2021, for example, it is estimated that Brazil lost 189 hectares of native vegetation every hour. In the Amazon rainforest alone, more than 100 hectares have been deforested per hour, which is equivalent to around 18 trees per second.

deforestation

The materials in our clothes come from nature and can negatively impact biodiversity. Various data show how materials widely used by fashion run the risk of being associated with deforestation and, consequently, the destruction of biodiversity. For example, it is estimated that more than half of the viscose produced annually comes from Ancient and Endangered Forests, and according to Modefica’s report, when analysing cotton crops in 2019, in most of the states where cotton has been planted, there has been an expansion in planted area compared to the previous season. Another example is leather, originating from cattle breeding, which is a practice responsible for most of the deforestation in the Amazon rainforest, which has been expanding continuously since the beginning of the 1970s.

Despite these alarming facts, none of the 60 brands and retailers reviewed publicly disclose measurable and time-bound commitments to zero deforestation. In the Global Index, the results are also disappointing. Only 14% of brands publish commitments in this regard.

According to the Textile Exchange organisation, the transition to regenerative agriculture is fundamental to the longterm health of the fashion and textile industry, playing a key role in helping farmers develop more resilient systems, thereby providing immense social and environmental benefits. It is a system of agricultural principles and practices that recovers organic matter and restores soil biodiversity, while taking into account the ecological and social aspects, rehabilitating the ecosystem and enhancing natural resources rather than depleting them. Despite being singled

Despite the growing loss of Brazilian biodiversity, not a single brand has a public commitment zero

out as one of the possible solutions to biodiversity loss, only 5% of brands disclose evidence of implementing regenerative agricultural practices for at least one source of raw material.

When addressing issues related to regenerative agriculture, it is important to consider that it is not new and has been practised in communities around the world for thousands of years. The adoption of a regenerative system, therefore, must respect ancestral agricultural practices and focus on issues such as agrarian reform, food security, rural workers’ well-being and valuing indigenous and quilombola communities, requiring deeper reflections on our colonial past as an industry and as a global society.

Moreover, another benefit of regenerative agriculture is that the philosophy behind it, if respected, can drive the emergence of a much-needed new paradigm for a revolution in the fashion industry.

A paradigm connected with nature, respecting time and biodiversity, with fairer and more inclusive supply chains and a focus on degrowth.

Yamê Reis, Fashion Consultant, Master's Degree in Sociology and Author of The Cotton Agribusiness: Environment And Sustainability

"When we talk about biodiversity, we are also referring to the original populations and guardians of these territories as well as to their traditional knowledge of food cultivation and soil management. Therefore, we must only consider “sustainable” materials whose production processes contribute to the preservation of ecosystem biodiversity, providing food security, income, and a decent future for the next generations."

VIEWPOINT: THE CHALLENGE OF SCOPE 3 EMISSIONS IN FASHION

DR. LEONARDO MARQUES AUDENCIA BUSINESS SCHOOL

Climate change is a social and environmental problem that will have a significant economic impacts if urgent action is not taken. The Swiss Re Institute report points to a reduction in global GDP of 18% by 2050 ($21 trillion) if nothing is done, thereby reducing the opportunities for social justice even more.

Carbon footprint is the main indicator to measure the contribution of each business (and its supply chain) to the problem. To set targets, a company must measure its carbon footprint according to three scopes:

• Scope 1: fuel consumption and vehicles used in the company’s activities

• Scope 2: energy purchase (i.e. the impact of energy sources used)

• Scope 3: purchased goods and services, employee work-home commute, waste disposal, transport, and distribution (upstream and downstream)

For most consumer goods companies (fashion included), Scope 3 represents about 80% of their carbon footprint. However, despite the key role of the supply chain, most companies do not disclose Scope 3.

Nowadays, the main global source of consultation on carbon emissions is the Carbon Disclosure Project (CDP). The project started in 2003 with 220 companies. By 2021, there were over 13,000 participating companies representing 64% of global market capitalisation (35% more than in 2020 and 141% more than when the Paris Agreement was signed in 2015).

Our research team has access to the CDP database (2021 data) and our analysis shows that there is still a long way to go: only 5,913 companies have reported data on their carbon emissions, only 45% of these companies have disclosed absolute emissions, and 36% have set their targets for the first time only in 2020 or 2021. Clearly, they have only just started the journey.

Now, the most surprising number is that only 331 companies (a tiny 5.6%) report targets that include Scope 3. Moreover, even within this select group, most report Scope 3 with no distinction between upstream and downstream nor details regarding specific categories, such as product purchasing and corporate travelling.

Many companies have set targets for 2020 that have not been met and many have adjusted promises for 2025 and 2030, or even 2050, which may be too late for climate urgency. Furthermore, the average reduction targets are timid: 30% reduction for 2025, 40% for 2030 and 90% for 2050. The dream of “zero carbon” appears distant on the horizon.

After presenting the global scenario, we dive into the numbers presented in the Fashion Transparency Index Brazil, where the Scope 3 topic starts to gain importance. Here, we observe that, among the 60 brands reviewed, 20 brands (33%) report the carbon footprint of their own facilities. Only having a third of the brands

that are in our country’s ‘shop window’ (and, therefore, were chosen for the Index) is a very low number. However, even more alarming is the fact that only 8 brands have published a decarbonisation commitment and only 6 brands report their progress - indicating even worse numbers than the ones seen in the global context. The fact that many brands report their carbon footprint, but do not have targets and commitments, indicates that we are far from where we need to be.

It must be emphasised: while greater transparency is welcome, the lack of targets and commitments prevents real progress. Every fashion brand needs to report its carbon footprint in detail for all three scopes and set the bold transition targets for the future that we need - with clean energy, circularity and zero carbon - to ensure that the planet is liveable and has fair conditions.

INTERVIEW: ALTERNATIVES FOR NATURE PRESERVATION

DANIELA DIAS PROJECT COORDINATOR AT SOS AMAZÔNIA

Q: What are the possible alternatives and solutions for traditional populations and riverside dwellers to be able to live in the forest?

A: One of the main alternatives and solutions is the creation of public policies that could be implemented and effectively monitored.

An incredibly misleading idea is being sold: that agribusiness is the great solution to boost the economy of the country and the Amazon region. The point is that it is not talked about how this system is based on the constant enrichment of some and the constant impoverishment of others; that this wealth is very concentrated in an agrarian elite that only gets richer.

There is also the erroneous idea that the way of life of traditional populations is backward. The truth is that regions with a large part of the residents of traditional

populations and indigenous peoples are the areas that contribute the most to the preservation of forests. These people use the land as a means of subsistence, a means of resistance and a means of survival. This way of treating the land tends to be much more controlled, full of traditional knowledge and identity.

Q: What are the main challenges faced by civil society organisations and local communities to develop conservation projects?

A: I believe that one of the main challenges is the lack of participation in decision-making spaces. Traditional populations are not involved in policymaking by attending important meetings and debates on socioenvironmental public policies.

Another challenge is the weakening of the management of protected areas. In recent years we faced systemic dismantling

the management of protected areas, institutions, and the bodies responsible for monitoring this have actually led us to taking several steps backwards in environmental matters.

Another point that makes the work difficult is the lack of transparency of public data, especially in the last four years, in which the information disclosed was incomplete or superficial.

With the new government coming in, it is urgent for everyone to sit at the same table to discuss and to be able to start a process of restoring everything that was lost. We need to understand that when we talk about sustainable development, we don't just talk about keeping the forest standing. We also talk about reducing inequality, about enabling people to live and survive from natural resources in an intelligent and non-destructive way.

SOS AMAZÔNIA IS A NON-GOVERNMENTAL ORGANIZATION WHOSE MISSION IS TO CONSERVE BIODIVERSITY AND INCREASE ENVIRONMENTAL AWARENESS. THE ORGANISATION HAS BEEN WORKING FOR MORE THAN THREE DECADES FOR THE PROTECTION AND CONSERVATION OF THE AMAZON RAINFOREST.

FINAL RECOMMENDATIONS

TAKE ACTION ON TRANSPARENCY

WHAT NEEDS TO HAPPEN NEXT?

Anyone anywhere should be able to find out how, where, by whom and at what social and environmental costs their clothes are made. This requires greater transparency across fashion’s global value chain.

By working together, as one collective voice, we must demand that companies become more transparent and that governments must require transparency from the brands we buy.

We want to see an industry where transparency and accountability are so deeply embedded across the entire value chain that the Fashion Transparency Index is no longer needed. However, greater transparency is only the first step towards making change in the global fashion industry and, unfortunately, a first step that is still very much needed across much of the industry.

Ultimately, transparency will help us to create a global fashion industry that conserves and restores the environment and values people over growth and profits.

So, our call to you is this: do not use this Index to inform your shopping choices but rather use these findings to inform your activism.

For citizens, this means calling on:

Major brands and retailers to be more transparent on all the issues included in the Fashion Transparency Index - get in touch with brands and ask them

#WhoMadeMyClothes? #WhatsInMyClothes? and #TheColorOfWhoMadeMyClothes

Policymakers to create legislation and more effective inspection processes that holds big brands accountable for human rights and environmental impacts the length of the value chain

European policymakers to legislate on living wages. The Good Clothes, Fair Pay campaign needs one million signatures from EU citizens (EU passport holders) so head to goodclothefairpay.eu to sign your name. If you’re not an EU citizen, help us spread the word by sending to a friend who is, and by sharing our posts on social media. Follow @goodclothesfairpay on Instagram and subscribe to our newsletter for updates

Shareholders and investors to use their power to influence big brands to be more transparent and do better for the planet and the people who make our clothes

Civil society, such as trade unions and NGOs, to ensure that brands’ policies and practices translate into positive outcomes in the places where clothes are made

Scrutinise the major brands and hold them to account on their claims.

For major brands and retailers, his means:

Publish your supply chain right down to raw material level as soon as possible, doing so in alignment with the Open Data Standard for the Apparel Sector, and upload the list to Open Supply Hub

Be completely transparent on all the topics covered in the Fashion Transparency Index, continuously updating public disclosure in response to evolving risks

Implement robust due diligence on human rights and environmental risks and publicly evidence the outcomes and impacts of your efforts

Work collaboratively on due diligence with your peers, especially when they operate in the same facilities, and with rights holders, especially women workers and trade unions, and then share these efforts publicly

Support legislation that requires greater transparency and corporate accountability on environmental and human rights issues in the global fashion industry

Work in partnership with third sector organizations to promote projects that have a positive impact on the lives of workers and on the environment

For policymakers, this means:

For investors and shareholders, this means:

For NGOs, trade unions, journalists and academic institutions this means:

Support better regulations, laws and government policies that require transparency and corporate accountability on environmental and human rights issues in the global fashion industry

Support better enforcement of existing laws, including sanctions, on social and environmental issues that relate to the global fashion industry

Be more proactive at responding to ‘red flags’ and risk factors associated with labour exploitation and environmental damage in the global fashion industry

Listen to stakeholders, such as workers and communities affected by the fashion industry, to inform their policy-making strategies

Ask major fashion brands and retailers for clear governance and accountability on human rights and environmental issues

Ask for board level accountability on human rights and environmental issues and demand that executive pay is tied to improved impacts on these issues

Demand that the board has expertise on the complexities and nuance of human rights and environmental issues Prioritise meaningful and credible environmental, social and governance (ESG) factors into your investment strategies

Call for mandatory transparency and corporate accountability legislation on environmental and human rights issues in the global fashion industry

Use the data and findings, available in this report and on Wikirate.org, to scrutinise and verify the public claims made by brands and hold them to account

Raise the flag when brands make public claims that do not reflect the reality on the ground

Use this data to collaborate with other stakeholders and brands themselves to address issues found in supply chains and prevent them in the future

Stand together in calling for mandatory transparency and corporate accountability legislation on environmental and human rights issues in the global fashion industry

Use this data to create new initiatives, complementary studies or claims for improvements in the fashion industry

THANK YOU!

The Fashion Transparency Index Brazil 2022 was written by Isabella Luglio, Elisa Tupiná, Ciara Barry, Delphine Williot, Liv Simpliciano and Maeve Galvin. The project was carried out with the technical partnership of Aron Belinky and Renato Moya from ABC Associados, supported by Mariana Kohler, from Em Roda Sustentabilidade e Estratégia.

The report was designed by Holly Temple and adapted by Igor Arthuzo. Sara Ramos from Cooperaminas was responsible for proofreading the Brazilian Portuguese version, while Samira Spolidorio translated the report into English.

Our most sincere thank you to our researchers, Elisa Tupiná, Isabella Luglio, Loreny Ielpo, Mariana Kohler and Renato Moya, who have worked carefully and diligently to produce the research underpinning this report. A special thanks to Delphine Willot, Aron Belinky and Fernanda Simon for all their support and immense dedication to the project.

We would like to give special thanks to Sarah Ditty who created the Fashion Transparency Index and to Eloisa Artuso who started the project in Brazil. Thank you for paving the way with such mastery. We are honoured to carry on your legacy and demand greater transparency and accountability in the fashion industry.

We extend the utmost gratitude to our pro bono consultation committee, who have been instrumental in guiding our team throughout this project: Dr. Mark Anner, Neil Brown, Maddy Cobbing, Gary Cook, Subindu Garkhel, Fiona Gooch, Christina Hajagos-Clausen, Kristian Hardiman, Aruna Kashyap, Kate Larsen, Hester Le Roux, Emily MacIntosh, Maya Rommwatt, François Souchet, Joe Sutcliffe, Urksa Trunk, Ben Vanpeperstraete, Frank Michel, Klaas Nuttbohm, Olivia Windham Stewart, Katie Shaw, Pauline Op De Beeck, Laura Balmond, Lead, Anna Bryher, Chloe Rollscane, Holly Syrett and Alessandra Mezzadri. And an enormous thank you to all the others who provided informal feedback on the methodology.

A very heartfelt thanks to the experts who contributed their additional analysis and viewpoints for the report this year: Aliança Empreendedora, Comitê Racial e de Diversidade do Fashion Revolution Brasil, Daniela Dias, Julia Codogno, Leonardo Marques, Luciana Sonck, Myanmar Centre for Responsible Business, Natalia Moreira, Nathalia dos Anjos, Open Supply Hub, Regina Magalhães e Will da Afro.

Thanks also to Paula Velasco Leal, Administrative Coordinator of Fashion Revolution Brasil; Mariana Chaves and Julia Teodoro, Communication Coordinators and her team members Taya Nicaccio and Mariana Ribeiro, responsible for promoting the project and Dandara Valadares, Press Officer. We extend our gratitude to the entire core team of Fashion Revolution Brasil, which follows and supports the project with energy and dedication - Carolina Terrão, Fabrício Vieira, Marina de Luca and Paloma Gervásio Botelho - and to our local representatives, student and teacher ambassadors, as well as to all other movement volunteers in the country.

Thank you to Laudes Foundation for their financial support over the years. We also thank the institutional support of Aliança Empreendedora, Associação Brasileira da Indústria Têxtil e de Confecção (Abit), Associação Brasileira do Varejo Têxtil (Abvtex), InPACTO and Pacto Global da ONU no Brasil.

We are grateful to the brands and their representatives for taking the time to attend our meetings and complete the survey questionnaires. We know that brands receive frequent requests for information from different organisations, and it’s difficult to respond to them all. Your participation is both vital and appreciated.

And, finally, we would like to thank you for reading this report!

Supporters/Partners:

Fashion Revolution’s Fashion Transparency Index has led the way in increasing transparency across fashion brands' supply chains, while pushing the industry to be more accountable.

With your support, we can continue to promote an even broader conversation about the challenges and opportunities for the Brazilian fashion industry to become fairer, cleaner, safer and more transparent.

>> DONATE HERE <<

If you can, please consider supporting our work! Thanks!

Traduzir: ITM Brasil received financial support from the Laudes Foundation. Our institutional partners are: Abit, Abvtex, Aliança Empreendedora, InPACTO and Rede Brasil do Pacto Global. Its content is the exclusive responsibility of Fashion Revolution and does not necessarily reflect the opinions of its supporters.

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

Technical partner:

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© Fashion Revolution CIC 2022 Published 29th November 2022

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