Just as with all other sectors, the conversation around ethics has taken center stage in retail as well. Sustainability, diversity, transparency, and more – these are all discussions taking place in every boardroom across the industry. Supply chain ethics and corporate responsibility are now critical and crucial to brand image and therefore, to success. But this isn’t just a trend – this increasing concern regarding ethical and responsible sourcing in retail demonstrates a long-term shift towards holding retailers accountable for their sourcing. This is particularly prevalent in 2020, searches for terms like ‘vegan leather’, ‘organic cotton’, and ‘biodegradable’ in relation to fashion increased by substantial percentages, according to a 2020 report from Lyst. Consumers will now actively make their choices based on the ethical reputation of the company. This is what brands need to consider now when they make their business decisions.
The shift towards demands for ethical sourcing
This shift in consumer habits towards a more ethical framework is nuanced. Customers still want good value and faster delivery times, but they will actively try to steer away from a company with a bad ethical reputation. Furthermore, if two similar products can also boast similar prices and delivery times, consumers nowadays will almost always choose the brand with a better ethical reputation. For example, when deciding between caged eggs and free-range eggs at the supermarket, a significant majority of consumers will choose to purchase free-range eggs due to the minimal price difference between the two. Millennials and Gen-Z are more willing to pay for ethical sourcing than older generations, within reason. According to Forbes, Gen-Z is most willing to spend up to 10% more on a product they deem sustainable. Similarly, millennials, only slightly older than Gen-Z, are the most likely to make purchase decisions based on their personal values.
This translates over to a number of other arenas as well. Apparel is especially under scrutiny for the lack of transparency within the supply chain. Consumers no longer want to hear about yet another instance of a company exploiting child labour to create their clothes. Not to mention that with the ease of social media, people are able to easily spread the word and encourage their peers to boycott a certain brand. Leaving comments on a brand’s Instagram page or spamming its Google page with 1-star reviews are all effective tactics that can be used by the public to damage a brand further. Therefore, it’s much more difficult for a brand to get away with unsavoury business practices than it used to be.
The need for a standard
One of the main obstacles consumers and brands face when labelling something as ‘ethical’ or not is the lack of a standard for what such terms actually mean. For example, there is no one single standard that customer can use to determine whether a product has been sustainably sourced; the meaning of the word differs entirely across countries, companies, and industries. This means that different brands establish their own systems of ethics with their own definitions about what is ‘sustainable’ and what isn’t. Therefore, one company’s sustainable initiative may look good on paper but not actually make any significant contribution to the environment. This is called ‘greenwashing’ – a misleading claim made by a brand that suggests environmental benefit but is unsubstantiated.
Terms to look out for when trying to avoid greenwashing include “all-natural”, “chemical-free”, and “biodegradable.” These phrases can be misleading and even false, depending on the product in question. The term ‘natural’ has no literal definition in this arena and therefore doesn’t convey any legitimate information about the product itself. “Chemical-free” is similar; the term has good connotations but not all chemicals are bad. It’s worth it to check the list of ingredients on a product instead to determine their viability. And the word “biodegradable” can be misleading because while many things might be biodegradable, likes clothes for instance, that doesn’t mean that throwing them away is better for the environment that donating or upcycling them. Many biodegradable products actually take years to decompose and doesn’t guarantee that the product is free from any components that might be harmful to the environment.
This is one of the many challenges of ‘ethical sourcing’ as a whole. Supply chains are complex. Checking and tracking every step of this process for ethics is a difficult and lengthy process. In many cases, suppliers who claim their supply chains are ethical are only looking at one end of the chain. Often, somewhere within the process, some unsavoury practices are being overlooked. This may not be intentional, but it points to the issues retailers face when trying to reach a certain standard of ethics.
Examples of ethical retailers
Patagonia has consistently topped reputation rankings when it comes to ethical sourcing and sustainable initiatives. It incorporates a number of low-waste and less polluting materials, such as organic cotton, non-toxic wool, non-toxic hemp, recycled nylon, and recycled polyester. Its workers are given health insurance as well as paid maternity & paternity leave.
Patagonia also gained more brownie points recently when they came out with a political stance that many of its consumers agreed with. The company donated $1 million to voting groups the Black Voters Matter Fund and The New Georgia Project. Additionally, Patagonia stores closed in observance of Martin Luther King Jr. Day on January 18th. While such tactics may prove detrimental to other businesses, in Patagonia’s case it just further reaffirmed the loyalty of its existing customer base rather than alienating them.
With 100% organic material that’s built to last a lifetime, CHNGE is an all-rounder good option for ethical clothing. The company uses a variety of ecofriendly materials, including Global Organic Textile Standard cotton (GOTS). As for its energy consumption, it uses renewable energy during its operations. This, in conjunction with its ecofriendly materials, results in less overall energy expenditure and less waste of chemicals and water. The company also traces its supply chain, ensuring that fair wages are paid throughout the chain and that factory conditions are safe and workable. While the brand isn’t labelled vegan, it is thought not to use animal products in its product development.
Adidas has previously come under fire when it was revealed that its staff in Bangladesh faced adverse working conditions. Since then, they have established a direct line from management to workers, where Adidas’ workers can call them if their rights are being compromised. Additionally, it’s primary suppliers’ and subcontractors’ name are published on their website, further adding to this degree of transparency.
Furthermore, Adidas recently launched a performance running shoe with Allbirds. Allbirds uses a cane sugar composite as its primary material, while Adidas uses recycled polyester and fiber developed from wood pulp. The two brands joined together to create a shoe with the lowest carbon footprint possible. The end product clocks in at under 3 kilograms of CO2, 63% less carbon emissions than a shoe of similar quality.
Tim Brown, co-founder and CEO of Allbirds, said ““We believe that the challenge of solving climate change is the problem of our generation and solving it will not be done alone. We need to find new business models, new innovations and new ways of working together. Our partnership with adidas is an example of that.”
Levi’s is one of the most recognisable names in fashion. Established in the 19th century, the name is almost synonymous with denim, in some respects. As a long-term retailer, Levi’s is constantly innovating. In recent years, it has harnessed the power of hemp for its products. Hemp is increasingly available and requires significantly less water to grow than cotton. While Levi’s still uses cotton in some amount, it has also committed to organic cotton rather than traditional cotton, which is more harmful to the environment. With each passing season, Levi’s continues to set higher sustainability goals for themselves, making them a great example of a brand with ethics built into its core.
Choosing the right retailer
It can get overwhelming trying to shop consciously. Fortunately, there is a one-stop solution to quickly look up any given clothing retailer for a brief overview of its ethics. Good On You is an app and website that catalogues hundreds of brands, indexing them by an ethics rating. You can read about a brand’s wage policy, animal welfare policy, and more with a simple search. The website also provides market updates and allows you to find an ethical brand based on what type of clothing product you’re looking for. Check it out here: Good On You – Sustainable and Ethical Fashion Brand Ratings