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The risks of forced labour within the apparel sector are pervasive and endemic at each stage of production, occurring across continents, in supply chains from fast fashion to luxury brands. Vulnerable groups such as women and migrant workers are particularly susceptible to exploitation. The apparel and footwear sector is increasingly reliant on migrant labour. For example, migrant workers make up as much as 77% of the Jordanian apparel workforce and 44% of the Mauritius apparel workforce. Migrant workers are at particular risk of exploitation, as employers often hold their passports to stop them from traveling freely and enable recruitment agencies to charge hefty fees. In Taiwan, recruitment agents were found to charge migrant workers up to US$7,000 for jobs in fabric mills.

The average score overall remains low, at 37 out of 100. Company scores range from 0/100 to 92/100; however, less than a third of the companies (15 out of 43) score over 50/100, and policies and practices are lacking on the theme of recruitment—the area with the most direct impact on workers’ lives.

Those scoring below 15/100 include companies across subsectors and regions, including Asian retailers such as Zhejiang Semir Garment (0/100), the owner of China's largest specialty children's apparel brand, and Shimamura (0/100), the second-largest apparel retailer in Japan;5 US footwear companies such as Foot Locker (12/100) and Skechers (7/100); and European luxury brands such as LVMH (14/100) and Prada (5/100).

The report finds 18 companies scored 0/100 on recruitment, which measures a company’s approach to reducing the risk of exploitation of workers by recruitment agencies, eliminating workers’ payment of fees during the recruitment processes, and protecting the rights of migrant workers. Only four companies provide evidence that they have reimbursed recruitment fees to workers in their supply chains (Adidas, Lululemon, Primark, and Ralph Lauren), and only seven companies provide evidence of how they support ethical recruitment in their supply chains. 

Adidas (92/100) remains the top-scoring company in the benchmark, while Lululemon (89/100) overtook Gap Inc. (75/100) to secure second place. Adidas and Lululemon achieve a significantly higher score than their peers due to their strong approaches to addressing risks associated with recruitment and migrant workers as well as risks in lower tiers of their supply chains. They are the only companies to disclose evidence that workers below the first tier of their supply chains have access to and have used
their grievance mechanisms.

The companies were selected for the benchmark based on their size (market capitalization) and the extent to which they derive revenues from own branded apparel and footwear products. KnowTheChain assessed information available on each company’s website, additional public disclosure that companies provided, and participation in relevant multi-stkaeholder- and/or industry associations. 

In addition to ranking 43 global apparel and footwear companies and providing an analysis of company policies, the benchmark provides recommendations for companies on a path forward. It also provides a valuable framework for investors to inform their decision making and active ownership practices. For this reasons, KnowTheChain is supported by global investors representing more than $3.5 trillion in assets who also committed to taking action to eradicate forced labour in their portfolios.

This report follows KnowTheChain's ICT and Food & Beverage benchmarks which were released earlier in 2018. 

See the press release for more details.