April 20, 2014

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Global Apparel Companies in India: Can They Be Socially Responsible?

Can the fashion industry develop a new business model that promotes health, beauty and well being?

Namrata_rana

By Prof. Utkarsh Majmudar and Namrata Rana

Part I of II

Over the last few years, consumer demand for fashion and branded apparel has seen a steady increase. To balance the demand and supply, branded companies have relied on outsourcing materials and production. Recent, horrific tragedies in Bangladesh have only highlighted what many have known for years, several outsourced factories have people working for subsistence level wages, unsafe and unhealthy working conditions, use of child labor is rampant and basics such as fire and safety checks are routinely given amiss. Many activists and writers have taken up these issues, and brands have had to gear up to increase their responsibilities in areas from where they source and sell their products.

In addition to safety and health of workers, serious questions have arisen on social issues, including racism, body image and gender politics taking center stage. A growing number of industry insiders are pushing designers and manufacturers to be more aware of and accountable for decisions they make about everything from the models they send down the runway to how and where their garments are manufactured.

Are CSR Reports Omitting India?

Apparel and footwear companies have started reporting their CSR and sustainability practices. Our study of Adidas, Levis, Mango, Marks & Spencer, Nike, Tommy Hilfiger and Zara reveals a trend where they all have significant community and supplier initiatives centering on donations, relief work, corporate volunteering, as well as the health and wellbeing of the people who work under various production houses.

Apparel-CSR-trends

India is a major sourcing hub for most of these brands. One can then easily assume that many of these initiatives would be part of the country focus. A read of the sustainability reports (www.slideshare.net/futurescape/global-apparel-companies-csr-initiatives-in-india) however, reveals otherwise. Most global brands websites mention limited engagement in India. Juxtapose this data in the context of the amount sourced from India and the quantum of product sold to Indian customers, these initiatives seem limited at best.

  • Adidas has more than 1,500 stores in India and sources 8% of its products from factories in India. The Adidas website talks of funds being donated for relief work in India.
  • Puma has 214 stores in India and ranks 2nd in the top sourcing country list with 36 factories. No CSR and sustainability initiatives were identified except for an auditing system for suppliers.
  • Nike has 400+ stores in India and sources through 23 Factories in India with 26,168 workers. Nike has two initiatives Magic Bus and The Girl Effect.
  • Mango has 21 stores in India and 5.42% of its purchases are sourced from here. Mango financed the construction of 45 homes in Anantapur, India, one of the poorest regions in the country.

Are CSR Activities Slipping Through the Cracks?

An argument could be made that these international brands are simply intermediaries. Much of the inputs come from local players. Three major input firms in India are Welspun, Texport and Gokuldas. All give little prominence to CSR. Welspun focuses on education and empowerment & health. Texport does not have a separate CSR section but the social initiatives section talks about equal opportunities and health and well being of staff. Gokuldas again does not have a separate CSR section but the social initiatives section includes free medical treatment for employees and 24-hour ambulance service. They also focus on providing decent working conditions, including focus areas like child labor, health and safety, as well as Bangladesh_fire_survivorsworking hours.

Most Western retailers source, or at least claim to source, from socially responsible factories in developing countries, including India. Thus neither the consumer facing entities nor the garment producing entities have a significant strategic focus on CSR. Are the CSR activities slipping through the cracks? This may be exacerbated by the fact that many of the Indian contractors for Western firms sub-contract the work. CSR in these subcontracted tiny/small firms tends to be off the radar.

Working conditions are not the only problems the fashion industry faces; there are significant issues on the consumer side as well. Young Indian consumers’ desire for fast-fashion is coupled with a significant increase in disposable income—or, alternatively, the availability of credit. While this is good for large companies expanding their retail market, it also leads to increasing waste as disposability plays a key role, along with speed and style, in fast-fashion. Many argue that in India nothing is really wasted since a T-shirt or pair of jeans that is thrown away will find many takers. However, analysis of urban landfills reveals significant quantities of clothes, shoes and accessories that can’t be recycled or used.

The other significant concern that has emerged is around young Indian girls and their desire to be size zero. Size zero has sparked low self-esteem issues, resulting in bulimia, anorexia and other health disorders. Fitness experts point out that size zero is unhealthy and not many are aware of its health risks.

Working to Protect Workers by Challenging Fast-Fashion

In a large country like India, these are issues the fashion industry could support abound. Corporations in some countries are working together to solve common problems. For example, an initiative called “HerProject” was started to improve lives of women and create business value. This project was started with participation from major brands such as Abercrombie & Fitch, Clarks, Columbia Sportswear, HP, Levi Strauss & Co., Nordstrom and Timberland.

Most apparel companies that source from India have the same or similar workplace issues. Can more, positive partnerships, like HerProject, be evolved so that consumer pressure prevents tragedies like Rana Plaza from Girl-empowerment-Indiaoccurring again?

Fashion, the epitome of consumerism, is also its own stealthiest critic. Dissuading consumers from fast-fashion poses a significant challenge, given their acute addiction to its transient thrills. However, since identity is continually evolving, and requires a materially referential imagining of an individual’s identity, an alignment of fashion and sustainable ESG commitments could make dissuasion possible. (More information: Fast Fashion, Sustainability, and the Ethical Appeal of Luxury Brands)

Can consumer issues be targeted at a strategic level? Should unsustainable and unhealthy practices be exported to the developing world? Or, can the fashion industry develop a new business model that promotes health, beauty and well being?

This series is the result of a joint collaboration project between Prof. Utkarsh Majmudar and Namrata Rana.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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