Ethical Performance
inside intelligence for responsible business


Levi Strauss, Walmart are best on supply chain

December 2010

A global survey of supply chains in the US apparel industry has named Walmart and Levi Strauss as having the most developed compliance programmes to improve factory working conditions.

The report, from the corporate responsibility advocacy group As You Sow, has scored 15 clothing companies on issues ranging from remediation processes to the off-site interviewing of workers during auditing. The study is the biggest of its kind, even though 18 firms, including Abercrombie & Fitch, FootLocker, and Polo Ralph Lauren, did not respond.

Based on the ‘substance and scope’ of performance in various areas, it says Walmart, Levi Strauss, Gap, Gildan Activewear and Hanesbrands ‘have set a bar for other brands to meet’.

As You Sow says these companies are committing significant resources to their supply chain, are involved in partnerships at many levels and allow substantial third-party performance critiques.

Across the industry the strongest performances were on publicly available codes of conduct and remediation, and there were signs of increasing collaboration between brands and with governments. Nearly all companies scored poorly on management accountability, however, and many registered the worst F grade.

In only eight of the 15 companies was the board committee responsible for compliance reviews, while a minority of companies, including Gap, Levi Strauss and WalMart, made compliance goals a compensation factor for its sourcing staff and executives.

Of all companies, Levi Strauss had signed up to the lowest number of International Labour Organization conventions, but its code of conduct was deemed exemplary because of its overall performance in purchasing practices, partnerships and transparency.

Walmart was strong in similar areas. JC Penney and Target were the worst performers among big brands, the former showing few signs of improvement.

The report recommends:
 greater emphasis on empowering workers
 the integration of factory compliance performance and executive remuneration
 greater analysis of purchasing practices and more investment in their improvement
 more detailed reporting on audits and remediation action.

Although the study is based on company-supplied data, it gives the first publicly available comparable baseline data on the industry’s supply chain efforts.

Amy Galland, research director at As You Sow, said the results were mixed. ‘Several major brands are employing an impressive amount of resources to address social compliance in their supply chains, but other brands are lagging,’ she said.

Apparel supply chain compliance programmes:
  Levi Strauss    3.4
  WalMart    3.3
  Gap    3.2
  Hanesbrands    3.2
  Nordstrom    3.1
  Gildan Activewear    3
  Target    2.7
  JC Penny    2.6
  American Eagle    2.3
  Columbia Sportswear    2
  VF Corp.    1.9
  Under Armour    1.9
  Ann Taylor    1.9
  Liz Claiborne    1.9
  Jones Apparel Group    1.9

Marks are out of five. 18 firms did not respond.

As You Sow | Global | Supply Chain Ethics

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