Supply Chain Responsibility: Sizing Up Apparel Brands in 2016

Earlier this fall marked the release of the 3rd annual report card on supply chain responsibility from our colleagues at the Institute of Public & Environmental Affairs (IPE). The report card, called the Corporate Information Transparency Index (CITI) [1], ranks companies on how well they track and respond to pollution emitted from factories in their supply chains in China. The CITI Top 30 list has emerged as the who’s who list of brands in the supply chain game.

At the same time, IPE also introduced its latest: an interactive map that provides continuous monitoring data for air emissions and wastewater from thousands of factories in China in real-time.  Open the map and you get readings from these factories from two hours ago, it is incredible! Plus, you can see the facilities’ past violation records and responses to them as well. This map is the biggest potential game changer of the 2016 report, in my mind. It provides radical transparency to operations of factories making the stuff we buy and has enormous potential to boost accountability of operations over there. The general public in China is certainly catching on. Now multinational corporations just have to decide to use it! 

True leaders in corporate supply chain responsibility should publicly affiliate themselves with their suppliers on the map. In this way, the factories will be accountable for their environmental performance both to them and to us, the general public. Any volunteers? In 2017, IPE and NRDC will be reaching out and asking. 

As to this year’s CITI grades:

I’m very happy to note that there was general improvement in the apparel sector compared to last year, particularly compared to slower progress in other industrial sectors. However, despite the apparel industry’s overall progress, several surprising brands with big reputations to uphold remain either unresponsive or barely engaged. HEY: I’m talking about you, Calvin Klein, DKNY, Coach and Armani to name a few. Time to join the party.

And who is on top?  Adidas once again! That company seems to be “Getting Explosive”, “Making History”, “All in or Nothing”, and “Rising Above”…. to steal from some of its recent ads. Way to go here, Adidas. In fact, only Apple edged them out as the brand with a higher CITI score in any sector. 

Rounding out the top five in apparel are Levi’s, M&S, Target and Gap, all of which made significant movement over their last year scores. Gap and Target both improved their scores by at least 20 points—we are impressed!   

A common excuse from brands who do not score well is that they do not know where to start to improve their supply chain management. Those still twiddling their thumbs can learn from the likes of Carrefour, Columbia and New Balance, all of which made substantial progress in their engagement with IPE over the past year. Check out the full rankings and the report to see where your favorite brands rank. 

And what is on the horizon for 2017? A trend I’m watching is for brands to begin to make public statements and real commitments to responsibly managing their supply chains where it matters the most:  beyond their “tier one” cut-and-sew assembly plants to the places that manufacture their materials. Real leaders are companies that identify and locate these suppliers, measure and motivate improved environmental performance, and identify egregious environmental problems that disqualify a factory from doing business. One indication of leadership is to publish a list of such facilities, as Inditex recently demonstrated.

In the meantime, the CITI will continue to fill the monitoring gap where multinational companies fail to implement the most basic forms of supply chain oversight.  

Still, a shout out is in order for the brands with high scores in 2016, especially those who made the CITI Top 30!  It’s these leaders who are making it increasingly inexcusable for bottom-dwellers to turn a blind-eye to their supply chain impacts.

[1] NRDC collaborated with IPE in creating the criteria that make up the CITI grading system, and though IPE undertook the individual grading, we once again co-authored the report.

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