Ethical Performance
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Big four clothes firms fare best on sustainability issues

July 2008

Adidas, Nike, Puma and Timberland have been identified as leaders in sustainability among clothing manufacturers.

A study by Switzerland-based Bank Sarasin found the four have 'above average' sustainability standards, and have maintained their leadership position since a similar study by the bank in 2006. However, it says ratings of most of the 16 companies covered, including those at the top, have changed little.

The only company to have shown marked improvement was Burberry, which was upgraded from average to above average. Most of the worst-performing clothing companies on sustainability, including Coach, Hermes, Luxottica, VF Corporation and Yue Yuen, were luxury brands, confirming the results of a separate recent study commissioned by the environment network WWF, which found such businesses were lagging well behind others (EP9, issue 8, p8).

Bank Sarasin said luxury brands had 'barely addressed the topic of sustainability' to date and were therefore taking big risks, 'because their business is highly dependent on the reputation of their product brands'.

The bank said progress was slow in the clothing sector partly because suppliers still lacked motivation to raise their environmental and social standards.

Too often they viewed such standards 'as an additional burden on their general procurement conditions' and frequently concealed poor conditions during factory inspections. The bank says this has to be tackled by better education of suppliers and closer co-operation with non-governmental organizations.

One noticeable change since 2006 was the increased emphasis on the environmental aspects of production. Nike is now the world's largest consumer of organic cotton, Timberland uses its own environmental rating system for its products, and Puma has banned PVC. The bank said this was partly a response to the increasing number of pressure group campaigns on the use of potentially dangerous materials. 

Bank Sarasin | Global | Benchmarking

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