Sustainable SME brands and suppliers are innovating with purchasing practices that are beginning to shift power dynamics within fashion value chains, says a report that looks at fair and responsible purchasing practices.
The report, Fair Purchasing Practices And Barriers In EU SME Garment Supply Chains, has been published by Fair Trade Advocacy Office and the University of Portsmouth, UK in association with Transform Trade.
Review of unfair trade practices: The report by European fashion SMEs, complementing the last paper that documented unfair trading practice in the apparel industry, also looks at the barriers in remaining competitive in the current fast fashion industry.
- The report reviews unfair trading practices (UTPs) in textile supply chains, along with a case study analysis of emerging best practices in terms of companies that are implementing fair and responsible purchasing practices across a range of areas including: lead times, payment details, prices, discounts, technical specifications, volumes and stock management.
- It shows that, if supported, these companies have the potential to be industry front-runners and demonstrate fair purchasing practices that can be replicated and scaled across the whole garment sector.
- Big brands need to be held accountable for unfair purchasing practices in order to allow others to compete.
- The research conducted for this report highlights the importance of increasing the visibility of workers and civil society organisations who are able to represent the human impact of unfair practices. It revealed that factory owners are able to hide the realities of poor conditions behind the existence of a few “model factories”.
Report architects: The report is based on research work — including interviews, surveys and comparative desk analysis — conducted by researchers from the University of Portsmouth. The report closes by giving concrete proposals to address power imbalances in garment value chains:
- Public policy support to help level the playing field for SMEs and social enterprises. Big brands need to be held accountable for unfair purchasing practices to allow others to compete. Researchers point to the need to develop a regulatory approach to UTPs in textiles at European level, for instance with a EU Directive.
- Business associations and support for SMEs, as these have a crucial role in building alliances and coalitions that can connect positive dimensions, and shifting away from the current norm that associations representing the garment and apparel sector are frequently dominated by the interests of big businesses.
- Supply chain transparency, including with the creation of publicly available factory lists accessible also to workers and unions for wider communication and action.
- Worker-driven social responsibility instead of Corporate Social Responsibility (CSR): human rights protection in corporate supply chains must be worker-driven, enforcement-focused, and based on legally binding commitments that assign responsibility for improving working conditions to the global corporations at the top of the supply chain.
The backdrop: SMEs in Europe represent 99.8% of all enterprises, 2/3 of employment and close to 53% of the added value created in the European Union (SMEunited, 2023).
- Textiles and clothing is a diverse and dynamic sector that plays an important role in European manufacturing, employing 1.7 million people and generating a turnover of EUR 166 billion (European Commission, 2022).
