All brands that are part of the ACT initiative now have mechanisms to track terms of payment and on-time payments, and they indicate that most orders are paid on time and in line with terms of payments. A third, however, is not monitoring the penalties.
- The findings are from ACT's Accountability and Monitoring Framework 2021 report which looks at the status quo of ACT member brands on their implementation of the Global ACT Purchasing Practices Commitments.
The Survey: The report compiles survey results from key stakeholders involved in ACT brand members supply chains to provide an even-handed evaluation of progress as well as identifying areas requiring concerted focus and investment.
- Responses given by brands in the Commitment Reporting questionnaire were converted into a Commitment score using a RAG+ system. Responses given by suppliers and brands to the ACT Purchasing Practices Surveys (PPA and PPSA) were converted into percentages and averaged to a PPSA/PPA score using a RAG+ system.
The Partnership: ACT is an agreement between 19 global brands and IndustriALL Global Union in pursuit of living wages for workers in textile and garment supply chains.
- In 2018, ACT adopted Global Purchasing Practices Commitments, committing to implementing them progressively across their global supply base. Each of the five purchasing practices commitments is linked to achievement indicators that are used to measure progress and deliver tangible improvements in the buying process with suppliers.
The Commitments: There are five commitments that brands need to make:
- Brands commit that purchasing prices include wages as itemised costs.
- Brands commit to fair terms of payments.
- Brands commit to better planning and forecasting.
- Brands commit to undertake training on responsible sourcing and buying.
- Brands commit to practising responsible exit strategies.
The Major Findings:
- Most brands have forecasting and capacity planning systems in place and brands engage their suppliers in critical path communication.
- The results of the ACT Commitment Reporting questionnaire shows that brands score themselves best against the indicators within Commitment 2 (fair terms of payment), and Commitment 3 (better planning and forecasting).
- This is also supported when mapping across the relevant Supplier Survey and Brand Survey questions for Commitments 2 and 3. Brand employees and suppliers view brand actions against these Commitments more positively than shown in baseline data provided by brands.
- Less than half of ACT member brands have a monitoring mechanism in place to track the application of the ACT labour costing protocol, and less than a third of suppliers received guidance on them (Commitment 1).
- About half of the brands are training relevant employees on the ACT commitments on purchasing practices, and those that do, train half of their relevant employees (Commitment 4). This was the section with the lowest score in the supplier and the brand surveys.
- On average, the responsible exit checklist was applied to only a third of the factories exited (Commitment 5). On the brand survey, 70% of brand employees had said they didn’t know of the due diligence process around the exit of a factory/ supplier.
- For these three Commitments at least half of the brands scored low in the ACT Commitment Reporting questionnaire. For Commitments 1 and 4, both the supplier survey and brand survey responses were also low.
- For Commitment 4: training on responsible purchasing practices, the negative deviation shows that brand employees/suppliers have scored brands worse than how the brand scores its practices in the Commitment Reporting questionnaire.
- Commitment 5 is the anomaly. Here is a disconnect between the ACT Commitment Reporting questionnaire and the supplier survey and brand survey results. This is highlighted with a positive deviation, showing that the results coming from the PPSA/PPA are better than from the Commitment Reporting by brands. This may be due to a lack of exposure by brand and supplier survey respondents to supplier exits and their surrounding protocols.
What they said:
The industry needs more than bold commitments. The ACT Accountability and Monitoring report is an opportunity for transparency, providing the leadership and accountability required for meaningful industry collaboration. For ACT brands the report provides crucial feedback on areas of progress and future concern.
— Mira Neumaier
Executive Director
ACT
