style over substance

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STYLE OVER
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Why ethics are not in
Written by Bryony Moore for Ethical Consumer Research
Association (ECRA). Published September 2011.
This publication was made possible by the generous
funding of the Irene Bruegel Fund.
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contents
4 The issues
8 The score table
shamed
offenders named and
rst
wo
the
–
les
ofi
pr
y
10 Compan
at you can do
of companies and wh
11 What we’re asking
02
03
Style over substance
The term ‘sweatshop’ is often heard in connection with garment
production. While you might expect a garment costing a few quid
to have been made under sweatshop conditions, when paying a lot
more for something you’d be forgiven for thinking the workers were
paid a decent wage. But alas, this is not always the case, as Ethical
Consumer has discovered. In this booklet we have rated leading
designer clothing companies on their Corporate Social Responsibility
(CSR) performance and the results are far from encouraging.
VOW OF SILENCE
ON SOCIAL AND
ENVIRONMENTAL
IMPACTS. HUGE
PROFITS. CEOS
PAID HEFTY
ANNUAL BONUSES.
PRODUCTION
OUTSOURCED. NO
COMMITMENT
TO FAIR WAGES
OR SAFE
WORKPLACES.
04
W
hile high street brands are used to having their names dragged through the mud
following sweatshop exposés, their designer counterparts have been largely
unhampered by such reputation-damaging scandals. During London Fashion Week in
September 2011, we are calling for the luxury sector to take responsibility and start reporting
on its social and environmental impacts.
The luxury clothing sector has long been riding high on a reputation established years ago
around high quality, crafted items. However, the reality is far removed. A designer item can
no longer be assumed to have been hand-made in Italy, but is far more likely to have been
produced in China or another similarly low-cost country. Just like high street companies, the
luxury clothing sector has shifted garment production overseas to cut costs. The difference
being that, thanks to pressure from campaigners, most high street companies do have at
least some sort of policy or management system in place which seeks to provide reasonable
working conditions, such as decent pay, a limit on overtime and a safe workplace. Luxury
brands have yet to step onto this first rung of the ladder.
While the CEOs of luxury conglomerates pay themselves hefty annual
bonuses – some to the tune of £5 million - the workers who actually
make the clothes aren’t even being promised enough wages to cover
their basic costs of living. The companies show no signs of tackling
their environmental impacts either.
WWF published a report in 2007 that rated luxury goods companies.1 The findings showed
that the luxury sector was, in general, not engaging with CSR at all. Four years later, our
research finds that little has changed.
There seems to be something of a vow of silence amongst luxury companies. Each one
covered in this Buyers’ Guide was sent a questionnaire including over 20 questions on what
they were doing to reduce the negative environmental and social aspects of their business.
Only one company responded (Burberry) and after asking which other companies were
participating in the research, their representative declined to fill in the questionnaire. As a
sector which reaps huge profits from the sky-high mark-up on its products, it has perhaps the
most scope to ensure its business does the minimum harm. But we have found that in fact it is
being far outperformed by companies who sell clothing at vastly lower mark-ups.
Something doesn’t add up and it’s time to ask for more. At the end of this booklet, we define
the actions we want companies to take, and what you can do about it.
Read the Deeper Luxury report here: wwf.org.uk/deeperluxury/
05
The issues
Animal testing
Fur
Luxury fashion brands tend to also produce their own fragrances. Each and every company in
this buyers’ guide gets a worst rating for its animal testing policy. According to anti-vivisection
campaigners Uncaged, the best-practice companies adhere to a Fixed Cut Off Date scheme.
This means that the company will not buy or use ingredients that have been tested on animals
by themselves or their suppliers after a set date (e.g. 1995). A mere statement that a company
does not test on animals does not guarantee that it doesn’t use animal tested ingredients.
During the ‘90s supermodels helped make fur taboo, by posing for a People for the Ethical
Treatment of Animals (PETA) ad campaign which stated they’d “rather go naked than wear fur.”5
Fast forward to 2011 and these same models are regularly seen parading around in real fur.
Uncaged publish a list of companies that do not test on animals on their website: www.uncaged.co.uk
All kinds of animals are farmed for their furs,
including mink, raccoon and fox. Perhaps one
of the most disturbing furs on offer is Karakul
– the skin of a newborn lamb or foetus of a
particular breed of sheep. The foetuses are
either ‘harvested’ from their mothers’ wombs
about 15 to 30 days before they are due to be
born, or are killed as newborns at one or two
days old. Keira Knightley wore a karakul coat to
an awards ceremony in 2009.5
Environment
The environmental impacts of clothing are huge. Non-organic cotton growing uses huge
quantities of water and chemicals – 22.5% of the world’s insecticides and 10% of all pesticides,
on 2.5% of agricultural land.2 The ‘wet processes’ of applying finishes and dyes to fabric also
use a great deal of water, plus many hazardous chemicals. In poorly-regulated countries,
garment factories often release toxic waste into nearby waterways. Greenpeace is currently
campaigning for companies to stop using toxic chemicals and recently published a report on
water pollution from Chinese sportswear factories:
www.greenpeace.org/international/en/publications/reports/Dirty-Laundry/
Phthalates in perfumes
According to a laboratory analysis commissioned by Greenpeace in 2005, phthalates were
found in all but one of the 37 brands of perfume tested in 2005. Studies have indicated that
exposure to these substances can upset the body’s ability to regulate hormone production,
damage reproduction, and cause liver and kidney defects. It is thought that they may also
cause cancer. Their application to the skin in the case of perfume gives them an easy route
into the body.8
06
© Smereka | Dreamstime.com
Again, none of the companies replied to our questions on this issue or displayed any
information on their websites that suggested they were aware of and attempting to
reduce their environmental impacts. Nor did they show any recognition of their other
environmental impacts, such as energy use, CO2 emissions, generation and disposal of waste
or transportation and packaging.
The fur trade is attempting to win favour by promoting its wares
as the eco-friendly equivalent to fake fur. However, studies have
shown that the chemicals such as formaldehyde and chromium
used to preserve real animal furs are potentially carcinogenic and
have devastating effects on the environment when they get into
rivers and streams.7
A report by an engineer at the Ford Motor Company calculated
that the amount of energy needed to make a real fur coat from
farmed animals – which accounts for 85% of furs worldwide – is
66 times that needed to make a fake fur coat. This figure takes
into account feed, cages, skinning, pelt-drying, processing and
transportation.7
Find out more about fur and animal cruelty at www.peta.org
07
Photograph: Richard Young/Rex Features.Source: http://www.guardian.co.uk
The fashion industry has resorted to all kinds of measures to sneak fur back into the mainstream,
including offering it free to cash-strapped fashion students. Animals farmed for their fur are
subjected to life in tiny wire cages with no bedding, often going long periods without food
or water. They are often handled roughly and their death is brutal, with methods including
suffocation, electrocution, gas, and poison.6
Workers’ rights
Gold & Diamonds
Most of the companies in this buyers’ guide make no mention of workers and their rights
on their websites, and as stated earlier, not a single company replied to our request for
information on this – or any other – sustainability issue.
Many luxury clothing companies also offer jewellery. Ethical Consumer researcher Leonie
Nimmo recently appeared on Channel 4’s Dispatches to challenge high street jewellers’
claims that they knew where their gold came from. The programme “The Real Price of Gold”
uncovered the shocking reality of gold mines, including child labour, dangerous mining
conditions and communities poisoned by pollution. Secretly filmed assistants working for
Argos, Earnest Jones and Goldsmiths were found to be making misleading claims about how
and where their gold was sourced.
These kind of working conditions can occur even when a company is trying its best to
avoid them through regular audits of their supply chains. When a company has no policy or
auditing processes in place, the likelihood of poor conditions increases dramatically. All the
signs indicate that this is the case for the luxury sector.
www.labourbehindthelabel.org
www.nosweat.org.uk
Tax avoidance
“Most companies have no idea where the gold
they sell comes from”, says Leonie. “Companies
need to take urgent action to ensure that their
gold supply chains are not tainted by human
rights abuses and environmental destruction.”
Image source: www.dailymail.co.uk
With production being shifted overseas to places like China, the legal minimum wage is often
below the amount necessary to cover basic living expenses like food, shelter and school fees.
And some garment factories even fail to pay the meagre minimum. Garment workers often
work in cramped, unsafe and unsanitary conditions for very long hours at a poor rate of pay.
It is common for garment factories to prohibit workers from joining trade unions so that they
are powerless to make demands, which therefore keeps costs low. The use of subcontractors
and homeworkers makes suppliers less traceable and pay and conditions for these workers
can be even worse.
Companies that appear in this Buyers’ Guide that sell gold
products but make no commitments to source responsibly
lose half a mark in the Human Rights and Pollution & Toxics
categories. Those that make no credible claims about
responsible diamond sourcing lose an extra half mark in the
Human Rights category due to the diamond trade’s fuelling of conflict in Africa.
The majority of companies in this buyers’ guide were found to either have holding companies
or subsidiary companies based in tax havens. Holding companies exist merely to own the
shares in a company, often not carrying out any function themselves.
Echoing our findings, a recent report called ‘Uplifting Earth: The Ethical Performance of
Luxury Jewellery brands’ found that only two out of the ten brands surveyed were active in
addressing the ethical, social and environmental aspects of their business throughout their
supply chain.4
Tax havens are territories which have their own laws designed to undermine the laws of other
countries and attract money to their own financial services sector.5
Visit the Dispatches website to sign the pledge calling on the British jewellery industry to
clean up its act – www.channel4.com/programmes/dispatches
Having a holding company or a subsidiary registered in a tax haven means the company
can avoid paying the higher rates of tax in the country or jurisdiction where the company’s
operations are based. It means companies can avoid paying tax in the countries where
they’re based, which has a negative effect on the public finances of those countries. This
practice is made more frustrating because the resulting large profits go towards nothing more
worthwhile than lining the pockets of already-rich company executives who pay themselves
mind-bogglingly generous annual bonuses.
08
References (main article): 1 wwf.org.uk/deeperluxury/ 2
www.ethicalfashionforum.com/the-issues/pesticides 3
EC mag 131 July/August 2011, ‘What is a tax haven?’ 4
Uplifting Earth: The Ethical Performance of Luxury Jewellery
brands, published 2011, Bendell, Jem and Doyle, Ian 5 www.
guardian.co.uk/lifeandstyle/2009/nov/22/fur-rather-go-naked 6 www.peta.org/issues/animals-used-for-clothing/fur.aspx 7
The No Dirty Gold campaign is calling on
British jewellery retailers to sign the 12 Golden
Rules for responsible gold mining – see www.
nodirtygold.org
Read ‘Uplifting Earth’ at www.lifeworth.com
www.independent.co.uk/news/uk/this-britain/fur—the-fakedebate-534303.html 8 www.greenpeace.org/international/
en/publications/reports/phthalates-and-artificial-musk/
09
4
7
5
Vivienne Westwood
Armani & others
2
People
Politics
Animal Rights
Factory Farming
Animal Testing
Habitats & Resources
Pollution & Toxics
Climate Change
Nuclear Power
Environmental Reporting
+ve
LVMH/Christian Dior SA
Gucci Group / PPR SA
Groupe Arnault / Christian Dior
LVMH/Christian Dior SA
Polo Ralph Lauren Corp
Permira Holdings
PVH Corp
PVH Corp
Burberry Group
Bellatrix Sarl
Giorgio Armani SpA
Latimo SA
D & G Srl
Paul Smith Group Holdings
Aeffe SpA
COMPANY GROUP
Brand list 5 (LVMH brands): Celine, Emilio Pucci, Fendi, Givenchy, Kenzo, Louis Vuitton, Marc Jacobs.
Human Rights
Brand list 4 (PPR brands): Alexander McQueen, Balenciaga, Bottega Veneta, Gucci, Stella McCartney, Yves Saint Laurent.
Workers’ Rights
5
Supply Chain Policy
Brand list 3 (Permira brands): M Missoni, MCS Marlboro Classics, Oxon, Portrait, Valentino.
Irresponsible Marketing
4
Arms & Military Supply
Brand list 2 (Giorgio Armani brands): Armani, Giorgio Armani, Emporio Armani
Genetic Engineering
3
Boycott Call
Brand list 1 (Aeffe brands): Alberta Feretti, Jean Paul Gaultier, Moschino Cheap and Chic, Moschino, Philosophy di Alberta Feretti.
1.5
Animals
Political Activity
2
5
Environment
Anti-Social Finance
1
Givenchy & others
Alexander McQueen & others
2.5
Dior
4.5
Valentino & others
4
4.5
Tommy Hilfiger
3.5
4.5
Calvin Klein
Donna Karan
4.5
Burberry
Ralph Lauren
5
Prada
2
6
5.5
Dolce & Gabanna
3
7
1
Ethiscore (out of 20)
Paul Smith
Moschino & others
BRAND
Ethiscore: the higher the score,
the better the company across
the criticism categories.
= bottom rating,
= middle rating,
empty = top rating (no
criticisms).
USING THE TABLES
Company Ethos
The Score Table
Product Sustainability
10
How we rated
the companies
The companies included in this buyers’ guide have been
assessed against 15 ethical criteria spanning animal
rights, human rights, the environment and political
activities such as lobbying. This assessment is based on
what they say about their own social and environmental
performance, as well as what campaign groups have to
say about them and what is reported in the media. All
companies were sent a questionnaire with 22 questions
relating to these categories, but none responded.
Q7: Does your
company
have a Code
of Conduct
or Supply
Chain Policy
addressing
workers’
rights at
supplier
companies?
11
Company profiles
Redcats, which is owned by PPR SA, in turn owns The Sportsman’s Guide, an online store
which sells hunting equipment including guns. As a result, it receives a negative mark in our
Arms & Military Supply category as well as in our Animal Rights category, for involvement in
bloodsports.9
In 2011 Burberry faced a revolt by its shareholder members after it was revealed that
Burberry’s chief executive Angela Ahrendts had received a £5.8 million share payment in
2010. Pirc, which is an advisory group for pensions funds and asset managers, described the
rewards for executives as ‘excessive’ and recommended that the shareholders vote against
the remuneration report at Burberry’s annual meeting.10
LVMH Moët Hennessy Louis Vuitton SA agreed to pay the Chairman and Group Managing
Director £3.5 and £4.9 million respectively in 2011.11
Holding companies in tax havens: Latimo SA (Vivienne Westwood), Bellatrix (Prada) and
Permira Holdings (Valentino)
Subsidiaries in tax havens: PPR SA (Gucci), Giorgio Armani, Burberry Group, Polo Ralph
Lauren and Christian Dior.12
Dirty Laundry, a report by Greenpeace, revealed that suppliers to several big clothing brands,
including Calvin Klein – owned by PVH Corp – were polluting two of China’s main rivers
with hazardous chemicals. According to the report the companies were taking advantage
of China’s lax environmental regulations and Greenpeace called on the companies to make
sure their products did not damage the environment and public health. Laboratory tests on
samples collected from the vicinity of two major textile suppliers in China over a period of
a year revealed toxic chemicals in waste water. Some of the chemicals detected have been
found to have hormone-disrupting properties that can cause the feminisation of fish and
reduced sperm count in men.13
12
image source: http://fashionwand.wordpress.com
Christian Dior and Gucci Group are selling gold and/or diamonds with no available policy
on responsible sourcing, having neither signed up to the No Dirty Gold campaign to end
irresponsible mining practices, nor become members of the Responsible Jewellery Council,
which aims to advance responsible business practices throughout the diamond and gold
jewellery supply chains. Many other companies have signed up, and this represents a
minimum committment from a company.12
Two of fashion’s favourite ethical pin-up
companies disappoint
The Stella McCartney brand is proudly anti fur or
leather, yet its parent company Gucci Group uses fur
in many of its other fashion brands. And while Dame
Vivienne may be personally committed to fighting
climate change, her company Vivienne Westwood Ltd
has no environmental policy in place to reduce the
global warming impact of its own operations.
References (company profiles):
9 www.redcats.com, accessed 22/08/11 10 www.guardian.co.uk/business/2011/
jul/05/burberry-shareholder-revoltexecutive-pay, published 05/07/11 11 2011 Compensation of Executive
Directors, downloaded from www.lvmh.
com on 01/07/11) 12 Ethical Consumer’s
Corporate Critic database 13 www.bbc.
co.uk/news/business-14134034
13
What we’re asking of companies
The key is communication. Our research for this Buyers’ Guide reveals that most of the
companies do not communicate about how they are reducing their environmental and
social impacts at all. We’re calling for the luxury sector to step up to the plate and bring itself
into line with what lower-end companies have been doing consistently for years. They aren’t
perfect, but they’re several shades better than the luxury laggards.
Luxury companies must start identifying, measuring and reporting on their progress towards
reducing their negative impacts. This information must be publicly available, as it is only by
opening a dialogue that the situation can improve. By working with campaign organisations
and their peers, as some high street companies do, they can find practical solutions to the
tasks they face and start working towards a sustainable luxury clothing industry
It is unacceptable to charge such high premiums for clothes which have not been produced
in a fair, responsible way.
What you can do
As consumers you have the power to effect change by telling these
companies that you do not agree with their ethics, and are no longer
willing to buy expensive, exploitative clothing.
This Buyers’ Guide is available free on the Ethical Consumer website (www.ethicalconsumer.
org). Visit the site to email the companies and tell them exactly which aspect of their business
leaves a bad taste in your mouth. You can email any of the companies regarding any of the
criticisms appearing on the score table on page 10. You can also use the website to praise
companies that ARE doing positive things, as we also hold information on a huge a range of
other companies, including ethical clothing companies.
Direct link: www.ethicalconsumer.org/BuyersGuides/Clothing/DesignerClothing.aspx
14
© Py2000 | Dreamstime.com
Visit the website today and add your voice to our campaign!
15
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