Fair Wear presents brand performances 2021

Brands score on sustainability despite Covid. More action needed on wages.

Even during a worldwide pandemic, clothing brands can do business in a way that supports garments workers’ rights. This is shown in an analysis presented by Fair Wear Foundation on 3^rd March 2022. The findings also make it clear that more attention is needed towards workers’ wages.

Fair Wear analysed 72 Brand Performance Checks conducted in 2021. During the annual Performance Check, Fair Wear assesses how member brands have worked to improve labour conditions and publicly reports that progress. The 2021 edition of the Checks turned out to be hugely complex due to the many challenges that Covid presented. Fair Wear’s Niki Janssen: ‘Factories and clothing stores had to shut down during the pandemic, resulting in garment workers ending up on the street and left to fend for themselves. The garment industry received a great deal of misery over this.’

Good practices

The good news is that during the pandemic, most members were able to show that positive change is possible, even in times of crises. In total, five Leader brands were added and three placed in the Good category, bringing the total to 28. Many Fair Wear brands managed to limit the damage caused by the pandemic by being flexible and supportive towards the factories they work with.

Niki Janssen: ‘From the beginning, we urged brands not to cancel orders that were ready to be shipped or were already in production, which understandably most members complied with. According to us, it is particulary interesting to look at brands that entered discussions with factories and actively enquired what the factories needed to survive. For example, Suit Supply did this at factories struggling with canceled orders from other buyers. The brand agreed with these factories that they would not fall below a certain minimum number of orders.’

Notable examples from brands

• Using the 3% lowered VAT from the German government to support good cause for garment workers (instead of discount for consumers)

Quite a few member brands used the 3% lowered VAT from the German government to support a good cause for garment workers. One member brand with this campaign, collected €41,465 which was donated to two local organisations supporting textile workers in India, Cividep and SAVE, in collaboration with German NGO FEMNET. The German help network for women affected by violence, ‘Frauenhauskoordinierung e.V.’, was also supported with these funds.

• Prepayment of orders in full

Most of our member brands were able to support suppliers in financial difficulties with prepayments of its orders to help secure workers’ wages. Even in times and areas of no lockdowns within the supply chain, some suppliers did find themselves in financial difficulties. Prepayment of orders by brands can help suppliers in dire need by providing a safety net.

• Continuation prices enabling living wage

Living Wage is a central theme in our member brands’ sustainability approach. For example, Since 2016 one of our brands contributes to higher wages at their production location in India and since 2018, the brand contributes to a living wage at one of their main suppliers and their subcontractors in Turkey. Throughout 2020, the brand was able to uphold this commitment through continuation prices.

• Brands conducting joint risk assessment to keep track of country specific risks

Our member brands sought collaboration and joint solution finding with its partners during the pandemic. For example, a member brand developed a collaborative risk-assessment tool together with other brands, to keep track of country-specific risks during the pandemic. As shops were partially closed in Europe, the brand also showed a shared-responsibility approach here. It supported its retailers by shifting revenue from its online shops to those shops that were closed.

• Most brands which asked for longer payment terms, later supported factories (financially/extra orders)

Most Fair Wear member brands did not cancel or decrease any orders. On the contrary, when suppliers indicated they were experiencing issues because of other customers withdrawing orders, member brands placed extra orders where possible.

Other notable practices include:

• paying unpaid wages during lockdowns based on leverage
• prefinancing materials
• increasing prices to cover COVID-19 related costs
• creation of extra collections like masks or additional orders to help suppliers with cancelled orders from other buyers
• keeping CSR staff on 100% while other staff went on furlough

More action needed on wages

The analysis also revealed that wages for garment workers remain a stumbling block for brands. In the 2021 Performance Checks members had to demonstrate that during lockdowns, garment workers were paid at least the minimum wage. ‘Otherwise, minus points were awarded for the minimum wage indicator in the Performance Check’, explains Janssen. That turned out to be the case with several brands. ‘It is positive that we were able to find this out through critical surveys and asking further questions.  Above all, it means that action is needed.’

The Performance Checks conducted in 2021, evaluate brand practices in 2020. You can find the outcomes of the 2021 analysis of the Performance Checks here. Explore each of our brands’ performance by delving into our brand section by clicking the link below.