DATA

ABOUT THE BRAND

Zara is a clothing and accessories retailer selling fashion products for men, women and children. It is the main brand under parent company Inditex out of Spain, purportedly one of the largest fashion retailers in the world. The brand closely follows international fashion trends and its business model means it can turn around new designs in a matter of weeks, giving the shopper access to the latest trends almost instantly. Anyone say fast?

Zara is owned by Inditex, which also owns Bershka, Massimo Dutti, Pull & Bear, Stradivarius, Oysho, Zara Home and Uterque. The information provided here is largely about the parent company, Inditex, with specific information about Zara when available.

HIGHLIGHTS

THE PROS

💪🏼 Assuring a living wage for all workers is one of the brand’s pillars of the management of its supply chain. Inditex implements programs that aim to guarantee that living wages are paid to workers in its supply chain. These programs mainly involve capacity building to allow collective bargaining to take place and encouraging the participation of all the required stakeholders to ensure effective social dialogue. Inditex also forms part of a working group created in 2013 by the Ethical Trading Initiative, in which it played a role in drawing up general principles allowing wages on the supply chain to be increased.

💪🏼 In 2014, Inditex was part of a collaborative multi stakeholder effort to urge the Cambodian government to increase the minimum wage. The Government of Cambodia announced a new minimum wage of $128 per month for 2015, an increase of 28%.

♻️ Inditex reports that in partnership with the Better Cotton Initiative it is financing a cotton growing project in India. The 461 farmers participating in the project are receiving advice and training on how to save water when growing cotton and how to cut down on the use of pesticides and fertilizers. Inditex states that the project benefits more than 2,300 people. We are unsure of where in India this project is being undertaken. The Better Cotton Initiative communicates that Inditex is a member of the initiative but does not report any specific information about how the company is involved.

THE CONS

💰 In 2014 the brand made over a billion units, specifically 1,018,995,911 units.

💪🏼 In 2014, 46 internal auditors and 827 external auditors completed 2463 production audits for Inditex and 266 breaches were detected, giving a compliance rate of 89%. 85% of the brand’s suppliers had an A or B rating.

🏢 In 2015, The Guardian reported that black customers at Spanish fashion retailer Zara’s New York stores had been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report. “Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” a spokesperson for Zara said in a statement to the Guardian.

💪🏼 After The India Committee of the Netherlands released a report in January 2016 on the “appalling living conditions” and “restricted freedom of movement” of young migrant workers in Bangalore, India, the brand has responded pledged to take serious action in correcting both living and working conditions.

 

/ In 2014, Inditex had 6683 stores globally and 137,054 employees.

/ In 2014, Inditex had 1625 suppliers of which each contributed production over 20,000 units/year. Inditex requires all suppliers to report their manufacturers, allowing Inditex to check their production capacity. Inditex suppliers reported using 5383 factories in 2014.

/ Inditex communicates the number of employees associated with factories in each of its geographical clusters in its 2014 Annual Report. The total number of employees in these clusters in 2014 was 1,123,576.

/ In 2014, Inditex’s annual revenue was €18.12 billion, which is approximately $19.815 billion.

/ In 2014 the brand made over a billion units, specifically 1,018,995,911 units.

/ Inditex shares a list of the number of factories and suppliers located in each country in its 2014 Annual Report.

/ Inditex does not publicly share a list of supplier names and addresses.

/ It is unclear if Inditex can trace its entire supply chain.

/ In April 2016, The Fashion Transparency Index gave Inditex a “Top Rating”. This rating means that the company is making significant efforts in the given areas, and has made some or most of this information publicly available.

/ Inditex shares a sustainablity balance sheet in its 2014 Annual Report. This balance sheet breaks down the results from the brand’s different sustainability initiatives.

/ Inditex states that only those meeting the requirements established by its Code of Conduct can enter their supply chain.

/ In 2014, 46 internal auditors and 827 external auditors completed 2463 production audits for Inditex and 266 breaches were detected, giving a compliance rate of 89%. 85% of the brand’s suppliers had an A or B rating.

/ The brand has implemented programs in countries such as Portugal, Morocco, Turkey, Argentina, Brazil, Tunisia and China to promote collective bargaining through freely chosen worker representatives.

/ In 2014, Inditex was part of a collaborative multi stakeholder effort to urge the Cambodian government to increase the minimum wage. The Government of Cambodia announced a new minimum wage of $128 per month for 2015, an increase of 28%.

/ In May 2015, Reporter Brasil and SOMO released a report with the opinion that Inditex’s supply chain monitoring is not 100% effective. The organisations also state that Inditex is not fulfilling all of its obligations as laid down in an agreement with the Labour Prosecutor’s Office following a 2011 incident that saw sweatshop conditions discovered in its supply chain: according to the Guardian the government “rescued” 15 workers from a factory subcontracted by AHA, the company responsible for 90% of Zara’s Brazilian production. Fourteen of the workers were Bolivians with one from Peru. One worker was aged 14.

/ After The India Committee of the Netherlands released a report in January 2016 on the “appalling living conditions” and “restricted freedom of movement” of young migrant workers in Bangalore, India, the brand has responded pledged to take serious action in correcting both living and working conditions.

/ The 2016 Greenpeace Detox Catwalk categorized Inditex as Avant-Garde. Greenpeace reports that brands that fall under this category are Detox committed companies that are ahead of the field, leading the industry towards a toxic-free future with credible timelines, concrete actions and on-the-ground implementation.

/ In 2014 Inditex used 1009 tonnes of organic cotton in its product that included 5.5 million items with 100% organic cotton, 3.5 million items with 50% organic cotton and 1.2 million items with 5% organic cotton.

/ In 2014 Inditex interrupted the production of items with angora wool and reported that it was eliminating these products from collection in 2015. Inditex negotiated with People for the Ethical Treatment of Animals and agreed to donate items with angora wool valued at 736,699 euro to Life for Relief and Development.

/ Inditex has developed a product health standard called Clean to Wear. The standard regulates substances whose use is legally limited, sets limits on two substances that are not covered by legislation, and includes REACH standards.

/ Inditex shares a sustainability balance sheet in its 2014 Annual Report. This balance sheet breaks down the brand’s efforts in numbers including:

  • numbers concerning the manufacturing of responsible products
  • overall energy consumption
  • CO2 emissions per garment released on the market (674.72g CO2eq/garment)
  • number of products retrieved to be sent for recycling (14,287)
  • scope 1, scope 2 and scope 3 greenhouse gas emissions
  • other atmospheric emissions
  • waste generation data
  • water consumption

 

/ Inditex has begun to implement their Strategic Plan for a stable and sustainable supply chain 2014-2018. With its Strategic Plan, Inditex reiterates its commitment to the Guiding Principles on Business and Human Rights developed by the United Nations “Protect, Respect and Remedy” Framework, better known as the Ruggie Framework. With a view to applying these principles, Inditex states that it has developed policies and procedures aimed at defending and promoting human rights both in its operations and those of its stakeholders.

/ From 2014-2018, Inditex aims to verify the traceability of 100% of production.

/ From 2014-2018, the brand aims to ensure sustainable compliance with Code of Conduct for manufacturers and suppliers. Inditex’s objective is for 100% of its suppliers to be classified as grade A or B by 2018.

/ By 2020 Inditex proposes that all of their stores will be eco-efficient.

/ Inditex is a member of the Zero Discharge of Hazardous Chemicals Group that aims to eliminate the discharge of hazardous chemicals by 2020.

/ In 2015, Inditex reported that it would commence a permanent initiative, InHealth, to promote a healthy lifestyle among its employees by means of a platform for healthy activities, sports challenges, regular newsletters, nutritional advice and a health library. The brand aims to be certified as the healthiest company in Spain.

/ The brand has implemented two projects to promote the integration of people with special needs or that are in a vulnerable situation into the labour market.

/ Inditex breaks down its investments in social programs by year, contribution type, category and geographical region in it 2014 Annual Report.

/ Inditex contributed €1 million to Médecins sans Frontières to support the organisation’s efforts  to provide immediate support to combat the Ebola epidemic in Médecins Sans Frontières intervention centres in Guinea, Liberia and Sierra Leone to respond to an urgent need for aid.

/ During 2014, Inditex allocated more than €7 million in one-off contributions, both monetary and in-kind, which were channelled through more than 200 social organizations.

/ In 2016, Inditex allocated €3.7m to Water.org to improve access to safe water and sanitation in developing areas. The contribution will facilitate more than 33,000 microloans for this purpose and will benefit more than 160,000 people in Bangladesh and Cambodia.

/ It is unclear how much Inditex CEO, Pablo Isla, made in the last financial year. However Inditex reports that he takes 0.058% of capital.

/ In 2015, The Guardian reported that black customers at Spanish fashion retailer Zara’s New York stores had been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report. “Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” a spokesperson for Zara said in a statement to the Guardian.

/ In 2015, Sourcing Journal reported that a former attorney for Zara has sued the Spanish retailer for damages of at least $40 million, claiming he was fired for being Jewish, gay and American.

/ In 2015, Quartz reported that a security guard denied a woman in a hijab entry into one of Zara’s French stores.

/ In October 2015, The Huffington Post reported that Amancio Ortega, the founder of Spanish clothing giant Zara, surpassed Bill Gates as the wealthiest person in the world for a brief time on Friday, according to Forbes’ real-time rankings of global billionaires.

/ In collaboration with the Textile Exchange, Inditex supports the Seeds Guardians project which aims to assist agricultural cooperatives in Odisha, India, to ensure the self-supply of organic cotton seeds. During this three-year program, Inditex reports that between 40 and 60 women will receive training on conservation of open source seed systems that will produce roughly 25 varieties of fibre and cotton seeds for organic cotton farming. These women will in turn train and support other women working in the cooperatives on how to save seeds and acquire the skills needed to maintain healthy and viable seed banks.

/ Inditex reports that in partnership with the Better Cotton Initiative it is financing a cotton growing project in India. The 461 farmers participating in the project are receiving advice and training on how to save water when growing cotton and how to cut down on the use of pesticides and fertilizers. Inditex states that the project benefits more than 2,300 people. We are unsure of where in India this project is being undertaken. The Better Cotton Initiative communicates that Inditex is a member of the initiative but does not report any specific information about how the company is involved.

/ Inditex participated in a working group that is developing common labelling methods that communicate the environmental impacts of products for the European Commission’s Product Environmental Footprint Pilot. In 2014, the brand carried out life cycle analyses on some of its products in order to identify the most important environmental impacts the stages of the supply chain these impacts are located.

/ Inditex is piloting Fabricado no Brasil in Brazil, a project that allows customers to discover details about the manufacturer of a product in store via a QR code on the label, including the most recent control audit and an email address allowing the customer to send questions or comments to the CSR department in Brazil. The brand states that by the end of 2014 the new labels will be included on all products manufactured in Brazil.

VOICES

SOMO + REPORTER BRASIL

From moral responsibility to legal liability? May 2015 Repórter Brasil & SOMO Modern day slavery conditions in the global garment supply chain and the need to strengthen regulatory frameworks: The case of Inditex-Zara in Brazil

The current research provides indications that the company’s supply chain monitoring is not 100% effective.

In its response to the 2011 slave labour scandal, Inditex combined progressive measures in the voluntary CSR realm with reactive litigation in the legal realm. In other words: it voluntarily assumes ‘moral’ responsibility but resists legal responsibility for the working conditions within its supply chain. In fact, this combination of strategies reveals an inconsistency: in the CSR realm, Inditex assures its stakeholders that it is able to effectively monitor its supply chain, while in the legal realm, it refuses to assume responsibility for the conditions in the sewing workshops, arguing that outsourcing was unauthorized, Zara Brasil was not aware of it and that its contracting party had been deceiving audits, i.e. Zara Brasil is unable to control its supply chain


WALTER LOEB | FORBES

Zara has become the leader in rapid development of fast changing fashions. – 3/30/2015

 

 


KATE ABNETT & IMRAN ABED | BUSINESS OF FASHION

With huge scale comes huge challenges. Inditex’s operations are now so large that every action the company takes has the potential to have vast negative impact on the planet. If every Inditex store accidentally left on a light overnight, it would add up to almost nine years of wasted electricity. – 3/30/2015

We haven’t heard anything from the brand, yet. Check back soon!