What about the ethics of fashion retailers?

“UK retailers are ditching unethical suppliers,” exclaimed a recent headline in several international news outlets. Did I read correctly? Apparently yes. A new report from a major global commercial bank claims that the pandemic and growing attention to environment, sustainability and governance (ESG) issues are changing the business priorities of Western retailers. The bank conducted a survey of more than 300 retail decision makers. The majority (51%) said sustainability was more important now than it was two years ago, while 49% said the same about ethical standards.

The report highlights fashion shoppers – our customers – as a key driver of the trend, with RMG retailers canceling an average of 7.5 contracts compared to an overall average of six. The most common reasons for canceling contracts were the use of unsustainable materials (39%), unfair working hours at suppliers (37%), and lack of accreditation with an ethical or sustainable organization ( 32%).

There are two ways to approach these results. First, they reaffirm the belief that, as suppliers, we need to invest more in environmental and social governance issues. As this report makes clear, if we as suppliers find ourselves lacking in this area, our customers will abandon us.

I largely agree with this argument, and there’s no doubt that RMG’s suppliers have spent a lot of money meeting buyer demands over the past few years. The cost of the audit alone is sometimes quite frightening, and the trend in these costs is on the rise. However, I feel compelled to highlight another aspect of this issue. The title of this story was “Retailers Abandoning Unethical Suppliers”. What about the ethics of these retailers? I have to be honest: headlines like this are nerve-wracking, given the experiences of the past two years. When the Covid pandemic hit, many fashion retailers canceled orders. Then they refused to pay for those orders, even when the orders were full or had already been shipped to customers. In other cases, retailers demanded huge discounts on orders that had been completed. Suppliers had no choice but to accept the discounts.

We all know the pandemic was tough on everyone when it first hit in 2020. Some retailers went bankrupt, while others could barely afford to pay their bills, as did their suppliers. . But there are others who have refused to pay their bills simply to protect their balance sheets. Where was the “governance” in these cases? Missing, it seems.

It’s not just a pandemic-related issue – the challenge of purchasing practices continues to be a top concern for all suppliers. That is why there are so many different initiatives in this area. If brands’ buying practices focused on ESG issues and supported sustainability among suppliers, we wouldn’t be having constant conversations about this issue.

But we all know that is not the case. While some fashion retailers are supportive and ethical when it comes to buying practices, others, some of them big names, continue to push the boundaries of what is fair, and in some cases even legal.

The study mentioned above talked about the abandonment of unethical suppliers. Maybe they deserved to be left behind. But, perhaps, there were also vendors who simply couldn’t afford to invest in the kind of accreditations their buyers insisted they acquire. Or maybe the vendors felt they had cleared enough hurdles already and felt aggrieved that they had to pay for multiple audits, many of which checked the same thing.

As an RMG supplier, I will always beat the drum for a more sustainable industry, and I’m glad that ESG is now being discussed in our industry. There should be no place in our industry for companies that treat their workers poorly, and the results of this survey suggest that there won’t be as we move forward.

At the same time, major Western retailers certainly cannot talk about the importance of ESG on the one hand, while themselves using cowboy tactics when doing business on the other. To take our industry as an example, it is normal that we are all held to the same ESG standards.

For a truly sustainable industry, with ESG at its core, we all need to do our part (retailers and suppliers). We should all be walking, not just talking.

Mostafiz Uddin is Managing Director of Denim Expert Limited, and Founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.