In the sustainable business world we hear a lot about the importance of the green-leaning economy. A closed loop where renewable energy and systems-thinking connects the organisms, companies and people involved. How a brand holistically and successfully integrates these components is the gold medal at the end of the race to a sustainable future.
H&M, Zara, and Uniqlo are in a race to the bottom of fast fashion dominance where capital gains and inertia vey for their position as a driving force. We are closing the loop of series on the giants of fast fashion –head over to our People and Planet posts– with a look at how their impact affects the corporate culture side of the coin. Here we will dive into their stances on race, gender, and ethnicity as well as how they hold themselves accountable to the innovation and ethics required to be a sustainable company in 2021.
Here is how we define the categories that we are going to take a look at:
The Corporate Ethics score: Monitors corruption and the ethical standards of the company. The Corporate Ethics score is affected by inputs such as corruption, political contributions, transparency, the quality of financial reports, as well as proper long-term control and vision.
The Diversity score: Related to the equal opportunity and representation of minorities and other under-represented groups throughout the company. This score considers such inputs as employee diversity, board diversity, any outstanding lawsuits relating to discrimination, and their supplier’s display of diversity.
Job Quality score: This score shows the overall working conditions and employee satisfaction. The Job Quality score takes into account labour rights policies throughout the company’s business activities, such as child labour policies; the equal compensation of employees throughout the company’s structure, the health and safety policies put into place; and employee turnover, work-life balance policies and work-time flexibility.
Fashion, and fast fashion have a problem of cultural appropriation and a lack of diversity. The ethics of a business comes into question immediately in the fast fashion world when wastefulness is woven into the fabric of the corporate model to make clothes as quickly and cheaply as possible.
“If something is very cheap, you have to ask yourself, is it really possible to make it in a factory that is run properly, with a living wage?”Peter McAllister, Executive Director of the Ethical Trading Initiative
Can sustainability and equity be viable if the primarily female and ethnically diverse garment workers are paid a subpar wage? And how can a fast fashion brand that manufactures in the global south claim to prioritize diversity and inclusion within its corporate walls without acknowledging the workers in the factories first? Keep those questions in your back pocket as you read.
With the Sweden-based H&M’s 5,000 stores worldwide, The Spanish-owned and operated Zara’s 2,200 locations, and the Japanese Uniqlo with its 2,300 stores, that sure is a lot of clothing being manufactured, retail workers to employ, and corporate offices to fill. For a visual: at the factories that manufacture H&M’s goods, 66% of the factory workforce are women while only 24% of the supervisors are women. This stat sadly trends across the board and showcases just how much progress needs to be made.
With the Arbor impact values in place, let’s see how H&M, Zara, and Uniqlo’s business practices stack up.
Corporate Ethics 3/5
Job Quality 2/5
We are starting off with the lowest scorer of the three companies in our round-up: H&M. Let’s see what led these Swedes to score the worst for booth Corporate Ethics and Job Quality and why a 3/5 for diversity just isn’t going to cut it.
As we know, job quality starts at the beginning –the supply chain. Through the COVID-19 pandemic, the manufacturing mecca in the global south was hit hard with the economic impact of the pandemic. With mass factory closures, lockdowns, pay cuts, and in some cases workers sleeping in tents in the factory not to miss work it hasn’t been easy.
“As a large global company, we have responsibilities for all of our 177,000 employees — but also for the 1.6 million textile workers employed by our suppliers. We want everyone to be treated with respect and work in a safe and healthy environment…”From H&M
In Bangladesh, a sizeable hub of H&M’s manufacturing and the country’s biggest economic sector, the government fully shut down factories from March 26-April 26, 2020. Factory owners were given a subsidized wage and workers were given 65% of the legal minimum wage –roughly 5200 taka –about $61USD a month. Labour campaigners in Bangladesh argue that it roughly takes 16,000 taka to live comfortably in the country. As the world’s second largest retailer, H&M’s profits from the beginning of the pandemic were down considerably –88% to be exact– but they have made a sweeping return to the top with a 75% increase in sales (1.2billion USD) just a year later.
“As more and more people are vaccinated and restrictions are eased, the world is gradually opening up and customers can once again visit our stores,”Helena Helmersson, chief executive for H&M.
But not so fast, H&M. As the consumers of the global north start burning holes in their wallets, the global south is still being iced out. Bangladesh, for example, is still recording record cases and has experienced vaccine shortages. This is an important corporate issue for H&M, and other fast fashion brands, because as profits are up and customers demand more product, the garment workers, still deep in a pandemic, are expected to turn out goods to meet the demand.
This past year has not only raised concerns for how the pandemic has impacted the industry, but also sounded the long-needed alarm for societal issues that need our attention. The Black Lives Matter movement is at the crux of how companies need to move forward for equity, inclusivity and representation.
H&M was in the hot seat two years ago for the culturally insensitive “coolest monkey in the jungle” sweatshirt modelled on their website by a Black child. This dehumanizing misstep was born in a corporate culture that allowed this design to move from a concept to a product that was available for purchase. And if this design raised concerns with any employee along the line, it begs the important questions that why no one comfortable to bring their concerns forward or if they did, why didn’t matter?
Since then, H&M has shifted the need for diversity and inclusion for it’s corporate staff with more training, a series of workshops, and the hiring of Annie Wu as the global leader of their (four-person) Diversity and Inclusion team. With 100,000 workers worldwide and a board of directors that is entirely white, H&M’s diversity and inclusion team might need a few more players.
“Inclusion is diversity in action. That is why inclusion comes first. Diversity is the mix of people while inclusion is about actively advocating for that mix and making it work. In an inclusive and diverse environment, everyone can contribute to optimizing decision-making and team performance by reflecting, respecting and relating to our employees, customers and communities. There are many definitions of inclusion and diversity — as a company, we want to embrace all interpretations.”from the H&M diversity and inclusion report.
Now here are some numbers according to H&M:
- 63% of the executive management roles are held by people who identify as white
- 35% of the US retail employees identity as hispanic, 27% as Black,
- in office management roles, 10% Black and 17% hispanic/latino and 62% white
It doesn’t take a statistician to be able to deduce that the diversity of H&M’s retail staff is not represented by a management team of their peers. H&M plans to double their percentage of Black representation and underrepresented groups in management positions by 2022.
Don’t worry H&M is aware: “At H&M USA Group, we recognize the disparity that still exists for colleagues in the black community and other underrepresented groups and we commit to making changes that reflect the demographic of our community.” Stay tuned.
H&M’s Diversity and Inclusion page makes no mention of LGBTQ2S+ community. Stats show that 50% of female identifying employees at H&M believe that the company is supportive of LGBTQ2S+ employees, compared to 100% of male identifying, and 75% of diverse employees.
The company has taken part in initiatives during Pride month to bring the LGBTQ2S+ folks into the spotlight, but without prioritizing the full spectrum of what diversity and inclusivity mean, they run the risk of perpetuating the cycle of marginalization.
Corporate Ethics 4/5
Job Quality 3/5
“Multiculturalism, diversity and respect are a key part of our DNA. Our employees represent 172 nationalities, speak 73 different…the obligation to act with respect, dignity and justice, taking into account the different cultural sensitivity of employees or customers, their diversity and multiculturalism, not allowing violence, harassment, abuse or discrimination”From Zara’s Diversity platform
But adherence to diversity is more than just a flashy statement splashed on a website by the world’s largest retailer. It is about how a company chooses to embody the virtues of an inclusive and ethical brand throughout its governance and community.
Zara has been in trouble a few times for taking a slice of the culturally insensitive pie. In a prime example of design that should not have made it past the initial stages, in 2014, Zara apologized for manufacturing and selling a striped t-shirt with that big old yellow star on its chest that was very indicative of the uniforms worn by Jewish people in concentration camps.
The company also sent twitter ablaze in 2018, when it launched a skirt described as a “flowing skirt with a draped detail in the front” that looked all too similar to a lungi, a traditional garment worn in India and other regions of South and Southeast Asia.
The Mexico Ministry of Culture accused Zara of cultural appropriation when it claimed that the company used indigeous Mixteca designs on it’s garments without proper acknowledgement of the cultural significance of the patterns or extending any benefits from sales to the community it appropriated from.
According to the ministry the pattern “reflects ancestral symbols related to the environment, history and worldview of the community” and was similar to traditional huipil dresses which, it said, were part of the women’s identity and took local craftspeople at least a month to make. Emphasis added, because, well we know it didn’t take a month to make Zara’s rip-off.
The continuing of fast fashion brands like Zara and H&M whose corporate agenda is driven by the need to make more for less and as quickly as possible, the implications of what they are churning out gets ignored. With fast moving trends and high employee turnover, it doesn’t matter how many spot checks on designs are made or how many culture awareness workshops are held. They can boast inclusivity and sustainability all they want, but these design mistakes will continue to be made until the nature of the industry shifts to quality over quantity.
In 2016, Zara reportedly implemented an algorithm that would scan designs for “insensitive or offensive features.” An algorithm sounds great, but how about prioritizing hiring a diverse design team? Just an idea.
Inditex, the parent company to Zara has fared far better when it comes to LGBTQ2S+ issues in the workplace. Since 2018, they support the UNs LGBTI Standards of Conduct for Business and are members of Open for Business, a global roster of companies that promote LGBTQ2S+ inclusion and equality in business.
Here to serve you some good, bad, and ugly Inditex stats:
- Inditex boasts an employment of 1,325 workers with disability, but with 6,758 stores and 1,805 suppliers and 8,543 factories worldwide, that is better than nothing but not nearly enough to be equitable.
- In 2020, women made up 76% of employees and 81% of management positions (up a wee bit from 79% in 2019)
- But hold only 36% of the positions on the board of directors –an entirely white board of directors all over the age of 50 which still includes Amancio Ortega, the founder of Inditex and the second wealthiest man in Europe.
“Our workforce never loses sight of the customer. We work to create value beyond profit, putting people and the environment at the centre of our decision-making, and always striving to do and be better. It is fundamental to how we do business that our fashion is Right to Wear.”The inditex “Who We Are”
Maybe it is just us, but “value over profit” is a slightly misleading statement for the world’s largest fast fashion retailer. Equality and transparency aren’t something you sandwich in the middle of the global supply chain of marginalized work force and a boomer board of directors. It is about achieving inclusion in all facets of the workplace from a garment factory in Indonesia, a retail shop in New York, to a corporate headquarters on the coast of Spain.
Corporate Ethics 4/5
Job Quality 3/5
Fast Retailing, the parent company to Uniqlo, has fared better across the board compared to their counterparts. The company’s home base in Japan has a particularly drastic and divisive corporate culture that impacts the employees of Uniqlo across the world. Don’t believe me? Search “Salaryman” and you’ll get an idea.
Albeit lacking in sustenance, it is by far the easiest and most straightforward site to navigate for corporate ethics and diversity information– the percentage of women working for the company (not including garment workers) is 70.6% and the percentage of women in managerial roles is 39.2%. A high percentage of female-identifying workers is pretty standard across the board for the garment and textile world as they tend to hold more part-time and entry level customer service roles. But 40% of managers as female-held positions is pretty bleak and an all too accurate representation of the gender-gap in Japan –where women are either expected to stay single to pursue a career or sacrifice it to have a family. A 2017 report by the Japanese government found that women make up only 13% of managerial roles compared to that of 40% in the US.
In an attempt to bridge this gap, according to Fast Retailing:
“To support career development for women at Fast Retailing, we have implemented a number of initiatives, including the “Women’s Direct Meeting”, an opportunity for UNIQLO’s female store and business managers to engage with outside experts to share insights. At GU, the “Waikiki” (Waku Waku Iki Iki) [translates to ‘“energy” and “excitement”] project brings together female employees raising children for mutual support and information sharing.”From GENDER| Unlocking the Power of Clothing
This is a nice idea to help boost up the morale of female employees and give them a common thread of solidarity, but that thread is a thin line when the fabric of the corporate culture to which they are woven is full of holes.
On a global scale, Fast Retailing has partnered with UN Women in 2019 with the intent to “contribute to the advancement of women in the apparel industry” with programs to support workers in their Asian factories. They planned to donate 1.2 million USD over the course of two years to these programs.
“While female workers account for around 80 percent of the garment industry, men occupy the majority of leadership roles, such as line supervisors and managerial positions. Moreover, female workers are often hampered by gender occupational segregation, pay wage gaps, and gender-based recruitment bias, making it more difficult for them to develop sustainable and fulfilling careers.”From the Fast Retailing press release on the partnership.
Yes, this is true, but framing this disparity of the gender of garment workers versus managers as a problem in their factories in developing nations is an example of ethical corporate greenwashing –it completely ignores the fact that this is on par to the gender gap in their own stores.
One move in the right direction for diversity and inclusion by Fast Retailing is the implementation of their Partnership Registration System. Japan is the only country in the G7 that does not legally recognize same-sex unions in any form. This registration system allows LGBTQ2S+ employees of the company to receive company benefits that they normally would not have access to. No step is too small when it comes to creating an environment that supports the sexual orientation and gender identity of their employees. In Japan this is more of a jump considering that even in 2021, Japanese LGBTQ2S+ citizens are not protected by any civil rights laws.
Diversity and inclusivity is about an openness to new ideas outside of the traditional framework of business and part of the greater path to a sustainability value system. From the exploitation of the basic human rights of garment workers, to the pillaging of our planet for resources, and all the way to the corporate culture to which employees feel represented, H&M, Zara, and Uniqlo are continuing to show that they no matter how many claims of sustainability they make, they are continuing to put profit over the people, planet, and employees.
So what are we to do? Here at Arbor, we don’t claim to have all the answers as to how to get these behemoth brands to ditch their wasteful and exploitative ways, but we do have the tools and resources to get started. Radical change to save the planet isn’t going to be made by ditching plastic straws in your iced coffee, it’s going to be through using your purchasing power and voice to change policy and support businesses that reflect your values.