At a time when an estimated $71 million is still owed to workers because of wage and severance theft committed during the COVID-19 pandemic, leading apparel and footwear brands have scored the lowest on the themes of Purchasing Practices (12/100) and Remedy (7/100), in the latest edition of annual KnowTheChain rankings.
- KnowTheChain’s 2023 revised methodology prioritised policy and process implementation in assessing whether companies’ actions to address forced labour risks in their supply chains result in meaningful improvements for workers.
- This revealed a significant gap between the efforts of the average company in the sector, scoring 21/100, and the highest-scoring companies–up to 63/100.
- With over 20% of companies scoring a mere 5/100 or less, and with allegations of forced labour identified in the supply chains of almost half of benchmarked companies, this year’s Apparel & Footwear Benchmark findings cut a sorry figure for industry.
- KnowTheChain is a programme of the Business & Human Rights Resource Centre, a resource for business and investors to identify and address forced labour and labour rights abuses within their supply chains.
Net zero: More than half (52%) of companies scored zero on efforts to adopt responsible purchasing practices in their supply chains.
- This was seen as a serious flaw since a failure to ensure purchasing practices do not exacerbate harmful working conditions or wage-theft, constitutes serious failure to properly prevent and mitigate harm.
- Only 22% of companies disclosed an example of remedy outcomes for workers in their supply chains and only 9% disclosed detail on more than one remedy outcome for supply chain workers.
The silver linings: Top performers in the Benchmark demonstrated how strong commitment to stakeholder engagement, human rights and environmental due diligence, and provision of remedy is entirely compatible with a healthy bottom line.
- Lululemon (63/100) and Puma (58/100) posted top scores on human rights performance, while reporting strong financial results to shareholders in 2022 and 2023—despite increasingly complex operating environments.
Performance not commensurate with profits: The companies assessed had a combined growth of $42 billion since 2022. Leading luxury names LVMH (6/100) and Salvatore Ferragamo (4/100) performed among the poorest in the Benchmark.
