Fashion Transparency Index Brazil 2020

FASHION INDEX 2020 EDITION A review of 40 of the biggest Brazilian fashion brands and retailers ranked according to how much they disclose about their social and environmental policies, practices and impacts.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

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CONTENTS 02 04

KEY FINDINGS EXECUTIVE SUMMARY

11 12 13 14 16 17 18 19 21 22 23 24

ABOUT THIS REPORT Why transparency matters What do we mean by transparency?

Viewpoint: How to survive a pandemic Purpose of the research About the methodology How brands and retailers are scored Annual updates to the methodology Weighting of the scores How the research is conducted How brands and retailers are selected The 40 brands selected

25 26 27 28

THE FINAL SCORES A guide to the scoring The final scores Quick findings

29 30 31 39 40 44 45 51 53 60 61 73

THE FINAL SCORES ACROSS THE 5 SECTIONS Average score across the sections 1. Policy & Commitments Viewpoint: More women, same challenges: how far do inclusion policies go?

2. Governance Viewpoint: In Brazil, inequality has a race 3. Traceability Case Studies: Transparency in action 4. Know, Show & Fix Viewpoint: The management of human rights impacts and due diligence 5. Spotlight issues Case Study: Transparency can empower artisans

74 75 75 75 76 77 78 80 81 82

FINAL RECOMMENDATIONS Take action on transparency Brands and retailers Governments and policymakers Citizens NGOs, trade unions and research institutes Thank you!

ANNEX Definitions Disclaimer About Fashion Revolution

The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution CIC or Instituto Fashion Revolution Brasil © Fashion Revolution CIC 2020. All rights reserved. This document is not to be copied or adapted without permission from Fashion Revolution CIC.

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KEY FINDINGS AVERAGE SCORE IN EACH SECTION

21%

overall average score across the 40 brands reviewed

Up 5 percentage points since 2019 (30 brands)

POLICY & COMMITMENTS

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

32%

24%

25%

14%

11%

Up 4 percentage points since 2018 (20 brands)

5

BRANDS SCORED ZERO POINTS

Brooksfield

0

Carmen Steffens

0

Cia. Marítima

59% 59%

C&A

74%

Malwee

68%

Renner Youcom Hering

13

HIGHEST SCORING BRANDS

57%

5

BIGGEST MOVERS* (DIFFERENCE IN PERCENTAGE POINTS BETWEEN 2019 AND 2020)

Melissa

+36

0

Hering

+31

Colcci

0

John John

+21

Colombo

0

Di Santinni

0

Le Lis Blanc

+21

Fórum

0

Marisa

+15

Leader

0

Lojas Avenida

0

Lojas Pompéia

0

Moleca

0

Olympikus

0

TNG

0

*In the previous edition, we considered the percentage variation to calculate the differences between the scores of 2018 and 2019. This year, we are considering the difference of percentage points between one year and another. If the variation-based calculation methodology was used, as in the previous year, the values indicated in the table above would correspond to an increase of: 1385% for Melissa, 119% for Hering, N/A for John John and Le Lis Blanc, which zeroed in 2019, and 76% for Marisa.

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5 HIGHEST SCORING BRANDS SINCE 2018

Brands publishing suppliers lists 2020

2018

(20 brands)

2019

2020

(30 brands)

(40 brands)

First-tier manufacturers 25% 33% 43%

Processing facilities 25% 33%

2019

C&A

74%

C&A

64%

Malwee

68%

Malwee

55%

Renner

59%

Renner

52%

Youcom

59%

Osklen

49%

Hering

57%

Havaianas

47%

2018

C&A

53%

Malwee

51%

Zara

40%

Havaianas

36%

Osklen

34%

33%

Suppliers of raw materials 15% 17% 20%

23%

overall average score across the 30 brands reviewed since 2019 Up 7 percentage points since 2019

32%

overall average score across the 20 brands reviewed since 2018 Up 15 percentage points since 2018

In the previous edition, we considered the percentage variation to calculate the differences between the scores of 2018 and 2019. This year, we are considering the difference of percentage points between one year and another. If the variation-based calculation methodology was used, as in the previous year, the values indicated above would correspond to: a 39% increase from 2019 to 2020 and an 91% increase from 2018 to 2020.

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EXECUTIVE SUMMARY

About the Fashion Transparency Index Brazil 2020 We have reached the third edition of the Fashion Transparency Index Brazil with the analysis of public disclosure of social and environmental policies, practices, and impacts of 40 major brands and retailers present in the Brazilian market. In 2020, 10 new companies were added to the survey, including brands operating via e-commerce and in the underwear segment.

The analysis covers 221 indicators covering a wide range of topics related to social and environmental issues, such as working conditions, forced or bonded labor1, living wages, freedom of association, gender equality, racial equality, supplier lists, due diligence, purchasing practices, animal welfare, biodiversity, use of chemicals, GHG emissions (greenhouse gases), disposal of textile waste, recycling and circularity, among others.

It is worth noting that this report is not intended to be a shopping guide. The Index has been designed to be a tool that progressively pushes major brands and retailers to disclose more information about their supply chain and practices.

This is because without transparency it is very difficult to see and protect vulnerable people and nature and hold brands to account for their claims.

The Fashion Transparency Index Brazil was created by Fashion Revolution CIC and Instituto Fashion Revolution Brasil and had the technical partnership of ABC Associados, a consultancy specialized in methodologies for analyzing the performance and profile of companies in the field of corporate sustainability.

Why do we focus the analysis on major brands and retailers?

In many ways, the big companies in the fashion industry, in Brazil and around the world, have played (and do play) an

important role in accelerating the climate crisis and, as we know, are responsible for many of the human rights abuses that persist in global supply chains.

More than half of the brands and retailers analyzed disclose little (or nothing) in relation to social and environmental issues

The current model of large-scale production and consumption is certainly not beneficial either to the environment or to the large number of people who often work for extremely low wages and in precarious conditions to supply the demands of a fast market. But this can change and large companies have an important role to play, given that where the big impacts are, there can be big solutions.

More than half of the brands analysed, 21 out of 40 (53%), scored below 15%.

In total, 13 brands did not score. However, proportionally there are fewer brands that have scored zero in relation to 2018 and 2019, corresponding to 33% in 2020, against 43% in 2019 and 40% in 2018.

These renowned brands and retailers have the responsibility (directly proportional to their size and reach), the capacity and the resources necessary to generate changes on a national and / or global scale, both for a large number of people and for the environment, which puts brands in a really powerful position.

So that’s what we need to look at.

Among the 10 new companies added to the survey in 2020, 7 scored below 10% or did not score anything at all, they are Lupo (9%), Centauro (3%), Netshoes (2%), Puket (1%), Di Santinni ( 0%), Forum (0%) and Lojas Pompéia (0%).

The brands from previous editions that continue to score 0% are Brooksfield, Carmen Steffens, Cia. Marítima, Colcci, Colombo, Leader, Lojas Avenida, Moleca, Olympikus and TNG.

1. Due to the debates and the lack of common definitions for terms such as forced labor and forms of modern slavery, and also considering claims made by people of color’s movements and organizations in relation to the use of the term slave labor, we chose to use ‘forced or bonded labor’, in the English version of the report, and ‘trabalho escravo contemporâneo’ (contemporary slave labor), in the Portuguese version. Both terms align with and are recognized by international references such as the ILO. We know that the discussion is complex and, thus, we will remain open to listen and deepen the debates on the topic and, if necessary, improve terminology in future editions.

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The Fashion Transparency Index can be a useful tool to encourage greater transparency in the supply chain

There is no way to hold companies and governments to account if we can’t see what is really happening. That’s why transparency is so important.

Although the level of information published is still very low for more than half of the companies, the Fashion Transparency Index Brazil has been a useful tool to create dialogues with some of the largest brands and retailers in the country. We believe that taking the transparency debate into these companies is the first step for them to begin to publicly account for their policies, practices and social and environmental impacts.

For example, the disclosure of supplier lists is critical to the exercise of human rights, as well as a necessary step toward accountability in the event of violations of these rights. Transparency in the supply chain allows workers, their unions and other labor rights advocates to know what brands workers are producing for, giving them the opportunity to raise complaints directly to the brands. In addition, as consumers, we have a right to know that our money is not supporting human rights abuses or environmental destruction.

For Fashion Revolution, transparency is the beginning and not an end, that is, it is the first step in a journey that leads to greater accountability and accountability that, in turn, leads to changes in practice.

We know that transparency alone does not represent the kind of systemic and structural change we want to see within the fashion industry, but it helps to reveal the structures in place so that we can understand how to change them.

Transparency does not mean sustainability, but it is an important tool that casts light along the entire value chain of the fashion industry - from the extraction of raw materials to disposal.

Only by bringing up the social and environmental challenges and problems present behind the scenes of the industry; will it be possible to act effectively in favour of human rights and nature.

In this sense, we can see an evolution in the disclosure of supplier lists by brands since 2018. If we consider suppliers of level 1 (tier 1) there was 25% (5 brands) publishing this information in 2018, 33% (10 brands) in 2019, until reaching 43% (17 brands) in 2020.

Looking at suppliers beyond tier 1, which covers processing facilities, growth went from 25% (5 brands) in 2018, to 33% (10 brands) in 2019 and 33% (13 brands) in 2020.

Finally, with lower results, but still pointing to a slight growth, the disclosure of raw material suppliers lists rose from 15% (3 brands) in 2018, to 17% (5 brands) in 2019, reaching 20% (8 brands) in 2020.

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See later in the report four case studies from around the world that highlight how journalists and labor organizations are using supplier lists to address and remedy poor working conditions in major brand supply chains.

Participation in the Fashion Transparency Index can influence brands to disclose more information each year Although the general averages presented do not reveal a considerable evolution (with the exception of section 3 - Traceability), through another angle, we observed that the brands included in the Index that accept to participate in the research process by filling in the questionnaire and assisting our team in the search for information achieve better results.

If we consider the overall average score of the 21 brands that participated in the Index in 2020, we found the result of 38%, while the 19 brands that never responded or declined the opportunity to participate add up to only 2% of the overall average.

All brands (8) with an average score above 40% in 2020 participated by filling in the questionnaires.

It is possible to notice a remarkable evolution by some brands, especially Melissa, with an increase of 36 percentage points, followed by Hering, with an increase of 31 percentage points, John John and Le Lis Blanc, both with an

increase of 21 percentage points, and Marisa, with 15 percentage points more than 2019 to 2020. For the first time since their inclusion in 2018, John John and Le Lis Blanc started to disclose relevant information on their websites and left the result of 0%.

Moreover, when analysing only the group of 20 brands present in the first edition, in 2018, we can notice an improvement in the overall average each year, since in 2020 they present an overall average of 32% (17% in 2018). At the same time, only the 30 brands evaluated in 2019 achieved an overall average score of 23% (16% in 2019) - against the overall average of 21% among the 40 brands analysed in 2020.

On the other hand, brands such as Brooksfield, Carmen Steffens, Colcci, Colombo, Leader, Lojas Avenida, Lojas Pompéia, Moleca, Olympikus and TNG continue without responding to our contacts or declining the opportunity to participate in the research process, since its inclusion in the indexes of previous years.

2020: the impacts of COVID-19 on workers in Brazil and the world The year 2020 will go down in history.

Since the beginning of the year, we have been facing an extreme global crisis caused by the coronavirus pandemic, with negative consequences and impacts - both immediate and long-term on people’s lives and the planet.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

Crises like this exacerbate the challenges, inequalities and injustices in the social, environmental and economic spheres, further weakening the already vulnerable groups. All of this in the midst of a climate emergency that is increasingly felt around the world and which also affects these groups much more strongly.

The fashion industry carries its share of responsibility amid this scenario.

Considering the fashion industry is a significant polluter, it also exposes workers to an increasing risk of exploitation in its global supply chain.

It is known that many brands and retailers are still not making sufficient commitments regarding the payment of living wages and decent working conditions in their factories and suppliers, the environmental impacts of the materials and processes they use or how their products affect the health of people, animals and the planet.

The pandemic has further revealed the inequalities and injustices present in the fashion industry. The way companies have chosen to manage this crisis shows a lot about the power structures and the real strategies that drive their business.

Since the beginning of the pandemic, we have followed the devastating impacts caused by large brands and retailers, canceling their orders (including those already in production) and delaying payments2. Many of them relied on force majeure clauses to evade contractual responsibility with their suppliers3.

Once these fashion giants cancelled orders worth more than one billion dollars4, workers from Asian countries, who were already paid so little, started to fight even more for their survival.

Bangladesh, one of the world’s largest garment producers, which depends more on the garment industry than any other and has 84% of its exports in this sector, was one of the most impacted countries5.

Estimates indicated that in the South and Southeast Asia, workers in the garment sector received 38% less than their normal income and, in some regions of India, that number went over 50%. It was also estimated that in Indonesia and Bangladesh there was a loss of wages of more than 400 million and 500 million dollars, respectively, during March, April and May. Finally, considering the global

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apparel industry, it is estimated that wages lost worldwide, excluding China, over the same three months, would total between 3.19 and 5.79 billion dollars6.

Here in Brazil it was no different and the crisis also hit several workers in the industry. In São Paulo, for example, the pandemic aggravated the exploitation of Bolivian migrants, who were forced to produce masks for R$ 0.10, while seamstresses spent two months locked in a workshop, working 14 hours a day and receiving less than a minimum wage. In addition to labor violations, Bolivian seamstresses, who are generally subject to domestic violence at times like these, still see their families at risk of being evicted7.

See more updated information on the impacts of the pandemic on workers in our special article on the topic.

What can a pandemic tell us about companies’ purchasing practices?

Responsible purchasing practices go hand in hand with suppliers’ ability to pay fair wages to their workers. However,

we note that the vast majority of brands do not disclose information about their business partnerships with their suppliers. Of the 40 brands analysed, only 2 report the method they use to calculate and isolate labor costs from their orders (including wages, overtime, social charges, medical leave, vacation and leave, as well as the cost of labor and salary increases).

Only 5 companies disclose their supplier payment policies, with stipulated maximum terms, while only 3 publish the percentage of payments to suppliers made on time and in accordance with the agreed terms. Finally, only 1 company among 40, discloses suppliers’ feedback about their buying practices through a formal process (e.g. through supplier meetings/events and internal research with suppliers on brand purchasing practices).

This is the first edition in which a brand has surpassed 70%. C&A reached 74% of general average score. However, although companies are improving their level of transparency each year, we know that there is still much to be done. For example, right at the beginning of the

2. With closed stores and slow online sales due to the global economic crisis caused by the pandemic, many major brands and retailers canceled their orders with suppliers, stopped paying for ready or in production orders or demanded discounts in exchange for accepting them, not taking any responsibility for the impact this has on the people working in their supply chains. It is worth remembering that, normally, companies pay their suppliers weeks or even months after the end of production and not upon delivery of the order. Suppliers, on the other hand, generally pay in advance for the materials or fabrics needed for these productions.

3. The pandemic has exposed the fragilities and inequities in global garment supply chains.The policy paper Farce majeure: How global apparel brands are using the COVID-19 pandemic to stiff suppliers and abandon workers by ECCHR, ILAW and the Worker Rights Consortium explores the power imbalances between brands and suppliers, and their contractual manifestation. It examines the law of force majeure and related doctrines, and how they apply to the current circumstances. The paper explains how brands violate their due diligence obligations through cancelling orders. It also calls for better access to accountability mechanisms for workers to enforce brands’ responsible supply chain practices. Available at: https://www.ecchr.eu/fileadmin/ECCHR_PP_FARCE_MAJEURE.pdf 4. https://www.bloomberg.com/news/articles/2020-03-23/europe-retailers-cancel-1-billion-of-bangladesh-garment-orders 5. https://www.courrierinternational.com/article/pret-porter-au-bangladesh-cest-lapocalypse-pour-les-ouvrieres-du-textile 6. https://cleanclothes.org/news/2020/garment-workers-on-poverty-pay-are-left-without-billions-of-their-wages-during-pandemic 7. https://reporterbrasil.org.br/2020/06/trabalho-escravo-despejos-e-mascaras-a-r-010-pandemia-agrava-exploracao-de-migrantes-bolivianos-em-sp/?fbclid=IwAR2uxhhtFFruf8R3PKTgLMu0K6C55GqOwQ96BfpRqzeF3IHC8wedsUOJDNI

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pandemic, still in March, C&A and other major global retailers cancelled orders from Asian suppliers, mainly affecting Burma, Cambodia and Bangladesh8.

In our research we noted that, like other brands, C&A does not disclose its supplier payment policy, with the maximum number of days it commits to paying suppliers for orders. Even disclosing its policies for suppliers in relation to contracts and terms of employment or salaries and financial benefits, the company still does not publish the percentage of payments to suppliers made on time and in accordance with the terms agreed in contract. This seems to indicate that the policies are not always put into practice or strictly followed by the brands.

At times like these, brands cannot shirk their responsibilities while waiting for their suppliers to guarantee their workers all the legally required provisions, including full wages and benefits. According to the #PayUp9 campaign and the Worker Rights Consortium (WRC)10, only on the 30th of October, C&A has publicly committed to pay in full for all remaining orders that were in-production or completed at the outset of the crisis.11 Many brands have already publicly committed to paying or have paid

their suppliers in full. However, it was necessary to create campaigns and act by organizations in favor of human / labor rights so that, in many cases, this could happen. It is surprising that even after 7 or 8 months many workers - who already earned very little and do not have the savings to support themselves in situations like these - are still waiting for what is due to them.

Fair and sustainable businesses are extremely important to generate income and decent working conditions, ensuring dignity and well-being, as well as access to basic services such as housing, food, health and education for workers and their families. However, as brands and retailers try to deal with the economic crisis caused by the coronavirus pandemic, their purchasing practices have been strongly questioned. Thus, it is essential that companies share more information about their business relationships with their suppliers so that they can be held accountable and comply with their commitments in order to prevent their workers and their families from being harmed.

Therefore, for everyone to benefit, the fashion industry needs to adopt a holistic and transparent approach, paying attention to everyone along the value chain. Publishing information about its

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purchasing practices allows major brands and retailers to be accountable for the safety, health and welfare of workers in their value chains, even in times like the one we are experiencing now.

There is still no transparency on living wages in the supply chain In addition to the importance of isolating labor costs when closing orders with suppliers, it is necessary to pay attention to the fact that this value may not yet be enough to cover basic living costs.

A salary capable of covering basic living costs or “living wages� is one that allows a decent standard of living for the worker and their family. It is typically higher than the minimum wage and aims to guarantee the conditions and resources necessary to live with dignity, such as housing, food, education, health, transportation, etc. The estimate of a living wage varies by region, and guidance in this regard is provided by governmental and international agencies, academic organizations and/or NGOs. As in previous editions of the Index, very few companies publish its efforts and strategies to improve pay and ensure living wages in its supply chain. Only 4 brands (10%) publish their commitment to pay living wages to workers in the

supply chain. Only 1 brand reports, in a measurable way, its annual progress to fulfill this commitment. No company discloses a measurable, time-bound strategy on how it will ensure a living wage in its chain.

Here we also notice that C&A, despite being the highest scored brand and disclosing its commitment to guarantee a living wage for workers throughout its supply chain, does not publish a measurable and time-bound strategy on how it will guarantee this commitment or the percentage above that amount that workers receive. This is an urgent issue for many workers struggling to meet their basic needs. Although it is a complex issue to solve, without further collective action and greater transparency on the part of brands and retailers, it will take a long time for these people to receive fair, living wages.

The pandemic proves why transparency is so vital Lack of transparency will not do business any good either. For the Dom Cabral Foundation’s director of sustainability, Heiko Spitzeck, companies that lack transparency on social and environmental issues will be at a disadvantage in obtaining international funding. Other specialists also point out the importance

8. https://www.courrierinternational.com/article/pret-porter-au-bangladesh-cest-lapocalypse-pour-les-ouvrieres-du-textile and https://www.workersrights.org/updates-and-analysis/#May27CA 9. The #PayUp campaign was formed out of the catastrophic decision of the fashion industry to refuse to pay for orders already completed by entering the pandemic and requires brands to be transparent and publicly commit to paying for orders placed before the pandemic, including those that were canceled or paused because of the coronavirus.

10. The Worker Rights Consortium (WRC) is an independent labor rights monitoring organization that investigates working conditions in factories around the world in order to document and combat exploitation conditions; identify and expose the practices of global brands and retailers that perpetuate labor rights abuses; and protect the rights of workers who make clothes and other products.

11. https://www.workersrights.org/updates-and-analysis/#Oct30CA and https://payupfashion.com/project/ca/

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that social and environmental issues have acquired in the face of the crisis and that the companies most engaged in this process will be the ones that survive and gain relevance in the medium term12.

However, we noted in our research that this practice is still not common among the brands analysed, considering that only 6 brands (15%) publish an annual sustainability or corporate social responsibility report audited or verified by an independent third party.

Also, according to business leaders and international investors, the strategy of companies in a post-Pandemic scenario tends to accelerate the search for certifications focused on sustainability, highlighting the increased interest in recent months for companies that place social and environmental development as a definition of success for their business models13.

With this, more is expected regarding the level of transparency of companies and the quality of their public information.

Despite the current context and expectations for the future, in general, the brands still do not show great progress since our first edition of the Index in Brazil. While in 2018 the overall average of the 20 brands reviewed was 32% for Policy

and Commitments, 30% for Governance, 12% for Traceability, 11% for Know, Show and Fix and 12% for Spotlight Issues, the 2020 results presented the following figures, respectively: 32%, 24%, 25%, 14% and 11%.

The pandemic increases the risk of forced or bonded labor in the world A report presented between September and October 2020 at the 45th session of the UN Human Rights Council points out that the economic consequences of the crisis generated by the coronavirus pandemic affect various segments of the population and will be worse for groups that were already vulnerable. Thus, the high levels of poverty and social inequality reinforced by the pandemic further increase the risk of forced labor14.

In 2020, we included new indicators in our questionnaire that address more deeply the fight against forced labor. Through them, we observed that only 6 brands (15%) publish data on the existence of violations related to forced labor at the suppliers’ facilities, such as restricted freedom of movement, retention of passports or other workers’ documents, forced overtime, withheld wages, debts or complaints and complaints related to recruitment practices.

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Only 5 companies (13%) disclose their approach to recruitment fees in the supply chain, stating whether they require no fees or costs related to recruitment processes to be charged or ensuring that they are reimbursed if this type of expense is incurred.

As the world tries to emerge from this crisis, it is essential that governments and businesses seek to restore systems by putting economies on a sustainable path to reduce human vulnerability and threats to the health and well-being of people and the environment.

Climate change could increase the chances of future pandemics The climate crisis, as well as the crisis caused by the coronavirus, affects vulnerable populations much more deeply. The prevention of the coronavirus, as well as the protection against climate catastrophes, is a luxury for most people in Brazil and in the world, many of whom do not even have access to clean water, an effective health system or decent working conditions, study and housing.

Just as countless workers in the global fashion supply chain are in vulnerable situations and lack, for example, health

leave, adequate medical assistance, or any kind of structure that allows them to face such drastic situations. It is worth remembering that workers who are in these conditions also do not earn enough to ensure their livelihood during periods of crisis, and those who live in crowded dormitories or dwellings are even more exposed to risks such as contamination.

In addition, the United Nations (UN) and the World Health Organization (WHO) claim that pandemics are consequences of the destruction of nature and the scientific community has studied how human pressures on the environment increase the risks of future pandemics15.

Global warming, the increase in human population, pollution and destruction of natural habitats are among the factors that increase the risk of zoonotic diseases passed from animals to humans16.

According to Argentine sociologist Maristella Svampa, it is necessary to assume the environmental causes of the pandemic, together with the sanitary ones, and put them on the political agenda to face the enormous challenge of humanity, represented by the climate crisis, through a great ecosocial and economic pact17.

12. https://valor.globo.com/live/noticia/2020/06/18/nao-podemos-deixar-temas-sociais-e-ambientais-perderem-relevancia-diz-presidente-da-gerdau.ghtml 13. https://valor.globo.com/live/noticia/2020/06/18/nao-podemos-deixar-temas-sociais-e-ambientais-perderem-relevancia-diz-presidente-da-gerdau.ghtml 14. https://inpacto.org.br/segundo-relatorio-da-onu-covid-19-pode-intensificar-a-escravidao-no-mundo/ 15. https://super.abril.com.br/sociedade/onu-e-oms-alegam-que-pandemias-sao-resultados-da-destruicao-da-natureza/?fbclid=IwAR08uFF-R59H4k81ngtSntFICIGqFLe-gZBuGEteTPAUp_m2lzvHg0vRAbM 16. https://www.climatechangenews.com/2020/04/23/next-un-climate-science-report-consider-pandemic-risk/ 17. https://editoraelefante.com.br/reflexoes-para-um-mundo-pos-coronavirus/?utm_source=Not%C3%ADcias+da+Editora+Elefante&utm_campaign=569713036c-EMAIL_CAMPAIGN_2019_12_06_02_24_ COPY_01&utm_medium=email&utm_term=0_3b6965324

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

When we analyse what brands and retailers are doing in favor of natural ecosystems, for example, to combat deforestation or ocean conservation, we find that 25% of the companies analysed disclose policies regarding their own management in relation to biodiversity and conservation. When these same policies are directed at suppliers, the number drops to 15%.

However, despite not finding a high number of policies, when it comes to presenting procedures and practical initiatives in relation to the same theme, we note that 43% of brands disclose this information.

Our biomes are on fire Brazil remains on fire. In last year’s report we brought data reporting the tragedy caused by one of the largest numbers of fire outbreaks recorded in recent years in the Amazon Forest. We also pointed out that the deforestation of the Amazon is due in large part to cattle grazing18 and we pointed out that livestock is not only for meat production and consumption,

but also for leather, which is an important material within the fashion market.

According to the executive director of Amigos da Terra - Amazônia Brasileira, Mauro Armelin, fire is the cheapest way to expand pastures19.

In 2020, unfortunately, the figures on burnings in Brazil are even more alarming. Faced with the continuous dismantling of environmental inspection agencies by the federal government, the month of September broke fire records, not only in the Amazon region, with the worst record since 2010, but also in the Pantanal, being the worst month in the history of the biome20. This month, INPE (National Institute for Space Research) identified 32,017 hot spots in the Amazon, an increase of 60% over September 201921. In relation to the Pantanal, the increase was 180% compared to the same period last year, totaling 8,106 hotspots22.

Normally, the Pantanal already suffers from fires and severe drought periods - in 2020 it is experiencing the greatest drought of the last 60 years23 - but although fire can happen naturally in the

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region, its spread indicates that there were criminal fires, according to the Federal Police, who investigate whether something like the ‘Day of Fire’ happened in the Pantanal, when farmers and entrepreneurs from Novo Progresso, Pará, organized fires in the Amazon on August 10 and 11, 201924.

Also, according to a survey made by Repórter Brasil, between July and the first half of August 2020, fires started in five cattle farms in Mato Grosso account for the destruction of an area equivalent to the city of Rio de Janeiro, which corresponds to 36% of the total area affected by fires in the Pantanal in the same period. Such properties belong to indirect suppliers of agribusiness giants25.

For Mauro Armelin, slaughterhouses should also analyse their indirect suppliers in order to prevent deforestation and fires caused by human action and explains that “if the slaughterhouses do not do the complete analysis and monitor the indirect (suppliers), they will never be able to say that their production chains are free of deforestation26.

As in the fashion industry, we recognize the importance of transparency and traceability throughout the supply chain, including the origin of raw materials used by brands. Thus, we seek to know whether companies are tracing the source of one or more raw materials through recognized certifications/standards or own initiatives such as “blockchain”, for example. We found that only 15% of brands disclose such information. We also identified that no company publishes a measurable commitment to zero deforestation.

Fashion and the climate crisis As urgent as the climate crisis is, there is still little transparency about what brands are doing to reduce their impacts on the climate. The global fashion industry contributes considerably to this issue, having been responsible for about 2.1 billion metric tons of greenhouse gas (GHG) emissions in 2018, about 4% of the global total, which corresponds to approximately the same amount of GHG emitted per year by France, Germany and the United Kingdom together27.

18. https://www.greenpeace.org/usa/wp-content/uploads/legacy/Global/usa/report/2010/2/amazon-cattle-footprint.pdf 19. https://reporterbrasil.org.br/2020/09/fogo-no-pantanal-mato-grossense-comecou-em-fazendas-de-pecuaristas-que-fornecem-para-gigantes-do-agronegocio/ 20. https://climainfo.org.br/2020/10/02/setembro-bate-recordes-de-incendio-na-amazonia-e-no-pantanal/ 21. http://queimadas.dgi.inpe.br/queimadas/portal-static/estatisticas_estados/ 22. http://queimadas.dgi.inpe.br/queimadas/portal-static/estatisticas_estados/ 23. https://www1.folha.uol.com.br/ambiente/2020/10/amazonia-tem-2o-pior-setembro-de-queimadas-da-decada-e-pantanal-tem-pior-mes-da-historia.shtml 24. https://reporterbrasil.org.br/2020/09/fogo-no-pantanal-mato-grossense-comecou-em-fazendas-de-pecuaristas-que-fornecem-para-gigantes-do-agronegocio/ 25. https://reporterbrasil.org.br/2020/09/fogo-no-pantanal-mato-grossense-comecou-em-fazendas-de-pecuaristas-que-fornecem-para-gigantes-do-agronegocio/ 26. https://reporterbrasil.org.br/2020/09/fogo-no-pantanal-mato-grossense-comecou-em-fazendas-de-pecuaristas-que-fornecem-para-gigantes-do-agronegocio/ 27. https://www.mckinsey.com/industries/retail/our-insights/fashion-on-climate?cid=other-eml-alt-mip-mck&hlkid=7e94b203469c42ba841624b01947be6b&hctky=11307401&hdpid=105befba-40b8-4132-858b-647d1b6365d1#

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As in previous editions of the Index, companies tend to disclose more information about their policies than how they are put into practice. We note that 33% of brands have policies on energy and/or carbon emissions considering their own operations, a very small evolution if compared to 30% last year.

With regard to the annual publication of the carbon footprint or greenhouse gas (GHG) emissions of their own operations,we have identified that 25% of brands publish this information. Only 2 companies (5%) annually publish the carbon footprint or GHG emissions of their supply chain - where the largest proportion of carbon emissions within the life cycle of a garment is concentrated.

There are 5 brands (13%) that publish goals based on science (such as those approved by the Science Based Targets Initiative - SBTi), covering climate and / or other environmental topics. Despite efforts to reduce emissions, the fashion industry is on a path that will go beyond the 1.5°C path to mitigate climate change established by the Intergovernmental Panel on Climate Change (IPCC) and ratified in the 2015 Paris agreement. To avoid this, the industry will need to cut its GHG emissions to 1.1 billion metric tons of CO2 equivalent by 203028.

Bringing to the Brazilian context, the country was responsible for the emission of 1.3 billion metric tons of GHG in 2016, with 22% of these emissions referring to land use and land use changes, which include, mainly, emissions from deforestation. Unfortunately, Brazil, which was once a protagonist in global climate negotiations, currently presents the resumption of deforestation and the absence of well-defined climate policies29.

Information dumping remain a problem Despite the improvements observed, it is also possible to note, since the first edition in 2018 (and in the global Index), that brands dump data and information without much consideration for the organization, format, location or even quality of the disclosures.

Sometimes, brands use great texts, explanations or beautiful and effective words that end up hiding really relevant and useful data. There were even cases of conflicting facts and data disclosed by the same company.

Whatever the reasons for this, it is extremely difficult for people to understand which information disclosed by brands is in fact important, besides

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being counterproductive from the point of view of transparency and accountability.

Sometimes, it takes hours and even days to be able to decipher what the brands are effectively promoting and to learn how to use this information effectively.

The companies that best communicate their information are those that demonstrate what they are doing in an objective, logical and yet sufficiently detailed way, avoiding the use of industry jargon that is difficult to understand or storytelling mechanisms (narrative) that in fact do not have a lot to say.

Acting on these findings

for their policies, practices and impacts on social and environmental issues.

Finally, we hope that other organizations, unions and workers increasingly use publicly available data to raise issues and claim improvements throughout the chain. Thus, collectively, we will be able to hold brands and retailers responsible for their conduct and move forward in the necessary transformation of this important sector.

We invite you to read the rest of the report for a deeper dive into the 2020 results.

The Fashion Transparency Index has allowed us to create constructive dialogues with some of Brazil’s largest brands and fashion retailers about what they can do to be more transparent.

We believe that transparency is the first step to hold these large companies accountable for their business impacts on human rights and the environment.

Therefore, we will continue to use the Index as a tool to measure the annual progress of the level of transparency of participating brands and retailers to increasingly encourage them to take greater responsibility and accountability

28. https://www.mckinsey.com/industries/retail/our-insights/fashion-on-climate?cid=other-eml-alt-mip-mck&hlkid=7e94b203469c42ba841624b01947be6b&hctky=11307401&hdpid=105befba-40b8-4132-858b647d1b6365d1# 29. https://pp.nexojornal.com.br/linha-do-tempo/2020/O-Brasil-e-as-mudan%C3%A7as-clim%C3%A1ticas

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1 ABOUT THIS REPORT

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WHY TRANSPARENCY MATTERS Lack of transparency costs lives When Rana Plaza collapsed more than seven years ago in Dhaka, the capital of Bangladesh, killing and injuring thousands of garment workers, people had to dig through the rubble looking for clothing labels in order to figure out which brands were producing clothes in one of the five garment factories operating in the building.

In some cases, it took weeks for brands to determine why their labels were found in the ruins and what sort of purchasing agreements they had with those suppliers.

This is because the vast majority of today’s fashion brands and retailers do not own their manufacturing and supplier facilities, making it challenging to control and monitor safety, working conditions and environmental management across a highly globalised and fragmented supply chain.

Brands and retailers may work with hundreds or even thousands of factories at any given time – and that is just the suppliers that cut, sew and assemble our garments in the final stage of production.

There are many suppliers and facilities further down the chain that weave, dye, print and finish fabrics, spin yarn, and farms that grow fibres used in our clothing.

Since Rana Plaza, tragic and fatal factory fires and accidents, poor and exploitative working conditions, pollution and environmental degradation remain rife throughout the global fashion supply chain. If we don’t know where and by whom our clothes are being made, it is difficult for relevant stakeholders to work together to fix problems before they end in tragedy.

Transparency matters because, simply put, a lack of transparency costs lives.

Without transparency we cannot see or protect vulnerable people and the living planet. With increased transparency, trade unions, NGOs, journalists and customers can make the connection between corporate social responsibility policies and their impacts on the ground.

Consumers want to know #WhoMadeMyClothes Business of Fashion, a recognized journalistic platform wrote1, “Fashion companies must come to terms with the fact that a more distrusting consumer expects full transparency across the value chain... consumers have become more active in scrutinising the brands they do business with.”

When consumers are equipped with more — and better quality, credible — information about the social and environmental impacts of the clothes they buy, they are able to make better informed decisions. As a result, transparency builds trust in the brands they buy and a lack of transparency can damage brands’ reputation.

[TOP] 2014, Relatives of those killed in the collapse of Rana Plaza rally for changes in working conditions, Andrew Biraj for Reuters.

[BOTTOM] 2019, A mourner of a victim of the New Delhi Factory Fire, Saumya Khandelwal for The New York Times.

1. https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/thestateoffashion2019ayearofawakening/the-state-of-fashion-2019-final.pdf

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WHAT DO WE MEAN BY TRANSPARENCY? Transparency means public disclosure

TRANSPARENCY [noun]

The public disclosure of credible, comprehensive and comparable data and information about fashion’s supply chains, business practices and the impacts of these practices on workers, communities and the environment.

Transparency is more than just sharing the good work that brands are doing.

Too often we see brands boasting about their business values and positive progress without sharing much about the things that go wrong, the complex challenges they face. This is often called greenwashing.

Similarly, it is also not enough to disclose crucial supply chain information internally or selectively to certain stakeholders only. This is how brands have operated for a very long time, yet widespread abuses remain endemic across the industry. True transparency requires public disclosure that shows a full picture of a brand's risks, actions, and results.

If done well, transparency should enable accountability

Transparency is a tool for change, not the end goal

Transparency enables others to scrutinise what companies say they are doing to address human rights and protect the environment. It means that there is information available for which others (consumers, investors, lawmakers, journalists, NGOs, trade unions, workers themselves) can hold brands and retailers to account for their policies and practices, especially when things go wrong like it did that day at Rana Plaza.

Transparency is not a silver bullet that will solve the many complex and deeply systemic problems in the global fashion industry. However, transparency provides a window into the conditions in which our clothes are being made and allows us to address them more quickly and collaboratively.

Being transparent doesn’t mean that companies are behaving in a responsible and sustainable manner. A brand may publish a considerable amount of information about its policies, practices and impacts and still be contributing to poor working conditions and environmental degradation. On the other hand, brands may be doing excellent work behind the scenes to make improvements, but if they don’t share this information publicly then no one may know about it and this learning cannot be shared more widely with others who may find it useful.

Transparency isn’t just for transparency’s sake. The information disclosed by companies needs to be accessible and detailed enough to take action upon. What each of us does with this public disclosure, how we use it to drive positive change, is what will count most. In this sense, we see transparency as the first crucial step towards systemic and structural change in the global fashion industry.

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VIEWPOINT:

HOW TO SURVIVE A PANDEMIC: MIGRANT WORKERS AND THE IMPACTS FROM COVID-19

Nilton Vargas Aroquipa: personal collection

What the workers have to say Transparency in the fashion chain should be a must, because it is shameful to realize that we are still unable to know where our clothes come from, and how they are made.

We don’t have a tracing system of the fabrics or the pieces of clothing, and that makes it very hard for us to choose products made with fair work.

Nilton Vargas Aroquipa, from Bolivia, has been living in Brazil for 10 years. He started sewing on his own, and today he has 7 employees and a diverse [garment] production, in Bom Retiro, a neighborhood that has many garment factories in the city of São Paulo.

To them, the pandemic was a nightmare, the garment worker explains:

It is even sadder to know that one of the best and more profitable areas, the fashion industry, was not able to assure the garment workers at the bottom of the chain were not in need during the pandemic. Many garment workers, that make thousands of pieces of clothing a month, have been hungry, and in the first 15 days of the pandemic we already had migrants coming to us for help!

"At first, we were happy, because we got to rest for a week. Then, I had to start making masks and aprons, but the price was too low; then I started selling at Sé Station (SP) so I could buy food and some stuff. I also started selling at Feira da Madrugada (Dawn Fair)2 and was able to pay some debts. We survived. Today, the garment production has risen, but the work conditions have changed a lot. Some clients lowered their prices, but all of them were desperate to work. A T-shirt was worth R$15,00 and now that same T-shirt is R$2,00 cheaper. They [clients] demand a lot, but when everything closed during the pandemic, they forgot about us. Then, they got back, and I said: ‘That’s not how things go, when it all started you didn’t even care, and now you want us to work on weekends?’.

So, I have positioned myself. Unfortunately, it happens a lot, but I have to value my work and stay strong. I have to put a fair price, if the client doesn’t agree, I knock on someone else’s door.”

It’s a sad reality of the textile industry and garment factories, with high profits, and poor income distribution. Transparency helps us monitor, qualify, and prevent near-slavery work conditions. I call upon the big brands to support more projects that work directly with garment workers, and appreciate those that keep such a rich productive chain.

Carla Aguilar, Social Worker and Adviser from Centro de Apoio e Pastoral do Migrante (CAMI1)

1. Centro de Apoio e Pastoral do Migrante (Support Center and Immigrant Pastoral) a.k.a CAMI, founded in 2005, acts in the promotion and protection of the basic human rights, gender equality, social integration, prevention of forced labor and human trafficking. It aims the social, economic, political and cultural inclusion of migrants and refugees, in order to build a world where people are the priority, and where women are not exposed to any type of gender violence. Its goals are sheltering and mobilizing migrants and refugees in the fight for their rights, citizenship, and social, cultural and political empowerment; fighting against forced labor, violence against women, xenophobia and human trafficking; promoting fair work and the reckoning and strengthening of the cultural diversity identity.

2. Feira da Madrugada (Dawn Fair) started on 25 de Março street, in the center of São Paulo and soon changed to Brás, one of the greatest garment centers of the city. It used to be a street fair that started before commercial hours, because of that it got known as ‘Dawn Fair’. In 2006, the fair left the streets and went to an old bus parking lot. In 2018, it was relocated to a new space known as Amarelão.

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VIEWPOINT:

HOW TO SURVIVE A PANDEMIC: FARM WORKERS AND THE IMPACTS FROM COVID-19 The fashion power structures were exposed during the pandemic, and the working class, which was already vulnerable, got even more prone to the inequalities. Big brands and retailers have cancelled orders that were already done or in production, leaving those that support their business waiting, without any pay or income. Other companies of small and medium sizes, struggling to keep the balance, stopped placing orders. In the countryside, the reality seems to be easily solved, but the crisis also had an impact on it.

[LEFT] Rita Ambrosio: personal collection [RIGHT] Francisco Renê Mora: personal collection

What the workers have to say Rita Ambrosio, 41, lives in a community called Cachoeira do Peixe, in Ceará, since she was little. She makes her living from agriculture and has started producing cotton some years ago. As the family provider, she faces the impacts of the pandemic with a lot of difficulty and states:

Francisco Renê Mota, from the agroecological community called Crateús, in the hinterland of Ceará, has always worked with agroecology, and in 2017 he got to know the NGO called Esplar1, which allowed him to get an organic certification. According to Francisco:

“Today we know the value that we, farmers, have and how our work is essential; my son says that if we don’t work, the city doesn’t eat. At the beginning [of the pandemic] it was really hard, because we were in the planting season and got very secluded, and feared the disease would spread to the countryside; this affected the production structure, and we earned less than usual."

"Agroecology comprises the entire life, not just being organic and not having pesticides.

We have to fight against the State, the bosses and the big landowners, but we evolved a lot, we went from being exploited to a better living condition. My family is the one working on the farm: me, my mom, my brothers; so, we did not actually stop [during the pandemic]. We represent our workforce, it is subsistence farming."

1. Esplar is a non-profit organization, founded in 1974, at the city of Fortaleza, Ceará. It works directly in the districts of the hinterlands of Ceará, developing activities of agroecology, and familiar agriculture.

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PURPOSE OF THE RESEARCH Fashion Revolution has been campaigning for greater transparency throughout the fashion industry since 2013 and our #WhoMadeMyClothes social media campaign has inspired millions of people to take action.

To build upon this question, our community asked us to help them make sense of the social and environmental information being shared by major brands and retailers.

Our community wants to know what information they should expect to find disclosed by major brands, what it means, how to put the information they find into a wider context and how to make use of this information to drive change. We created the Fashion Transparency Index for this purpose.

We designed the Index to: •

•

Compare the level of transparency among Brazil’s largest fashion brands and retailers; Incentivise major brands and retailers to disclose a greater level of credible, comparable and detailed information year-on-year by leveraging their competitive tendencies;

•

Analyse trends in transparency across the national fashion industry;

•

Use the findings to help shape our ongoing campaigning efforts.

Although it hasn’t necessarily been our intention, participating brands and retailers have told us that the Index is a useful exercise for them to take stock of what they are disclosing and where they have room to improve.

This is not a shopping guide.

The Fashion Transparency Index is not an indication of whether particular brands are ‘good’ or ‘bad’. We are not recommending or endorsing any of the brands and retailers reviewed, regardless of their scores. The purpose is to understand how much social and environmental information is shared by the world’s largest brands, to drive greater disclosure from them and to use this information to hold them to account when needed.

transparency accountability change

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ABOUT THE METHODOLOGY

The Fashion Transparency Index uses a ratings methodology to benchmark the public disclosure made by brands and retailers across five key areas:

•

Social and environmental policy and commitments

•

Governance

•

Supply chain traceability

•

Know, show and fix (supply chain due diligence and remediation)

•

Spotlight issues (working conditions, consumption, product/ material composition and climate)

The methodology was designed in 2017 through a four-month consultative process.

We relied upon the pro-bono input of a diverse group of industry experts and stakeholders from academia, the trade union movement, civil society organisations, socially responsible investment, business consulting and journalism. Among others, this includes: •

Dr. Mark Anner, Director of Centre for Global Workers’ Rights at Penn State University

•

Aruna Kashyap, Human Rights Watch

•

Kate Larsen, SupplyESChange Initiative

•

Neil Brown, Liontrust Asset Management PLC

•

Dr. Alessandra Mezzadri, SOAS, University of London

•

Professor Ian Cook, University of Exeter

•

Katie Shaw, Open Apparel Registry

•

Subindu Garkhel, Fairtrade Foundation

•

Francois Souchet, Ellen MacArthur Foundation

•

Christina Hajagos-Clausen, IndustriALL Global Union

•

Joe Sutcliffe, Advisor - Dignified Work, CARE International

•

Kristian Hardiman, Good On You

•

Ben Vanpeperstraete, human rights expert

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HOW BRANDS AND RETAILERS ARE SCORED Brands receive points for information that has been publicly disclosed through the following channels:

•

Financial statements published by the brand/retailer (provided they are linked to the company’s website);

•

Brand/retailer website;

•

•

Parent company or group website (where there is a link to the company’s website);

Documents available to the public and which can be freely and easily downloaded through the brand’s website.

•

•

•

Investor relations website (where there is a link to the company’s website); Another external third party website (e.g. online data platform, NGO partner, data sharing initiative, another benchmarking disclosure - so long as the weblink is made available via the brand’s own website); An annual report, on sustainability or social responsibility, as published by the brand/retailer (provided this is directly linked to the main website of the brand/retailer and that it has been published in or after January 2018);

We do not count the following information sources: •

Clothing labels and hang tags on products;

•

In-store or at other physical locations;

•

Smartphone apps;

•

Social media channels;

•

A third party website or document where there is no weblink from the brand’s own website, including press articles;

•

Downloadable documents where the weblink cannot be found on the brand’s website.

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Adaptation of the methodology to the Brazilian context For the implementation of the first edition of the Brazilian version of the Fashion Transparency Index, in 2018, Fashion Revolution Brasil had the partnership of FGVces (Sustainability Studies Centre of the Getulio Vargas Foundation), which acted both in the adaptation of the methodology to the Brazilian context and also in carrying out the survey.

This adaptation occurred mainly in the Spotlight Issues section, where there is the possibility of selecting new topics, recently trending and of great urgency, for the local context.

At that time, after having researched and consulted with different specialists within the Brazilian industry, we concluded that it would be important to address issues related to race equality and to the working conditions of foreign migrant workers in the supply chain. Only a few adjustments were made, meaning that the processes of analysis were kept strictly the same, without causing any harm to the comparability of the results with the global methodology.

Since 2019, we have continued our work to revise the content and the structure of the questionnaire with the same technical partner, which now works in the name of ABC Associados consulting firm. As in the previous year, this team supported us on the selection of brands to be reviewed in the Index and in conducting their respective evaluations.

It is also important to note that there could be different information for brands included in both Indices, the global version and the Brazilian version, due to the time of year when the research was carried out for each report.

Each analysis used the most recent information available when the analysis was conducted, and this could have led to differences in the final scores of the brands reviewed in both indices.

For more information, please click here to download the template of the Brazilian questionnaire sent to the brands.

We recognise that the methodology is not perfect and can always be improved. We welcome any feedback on how to make it better: educacional.brasil@fashionrevolution.org

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ANNUAL UPDATES TO THE METHODOLOGY

Every year, our team analyzes all the indicators in the questionnaire sent to the brands in order to clarify language; select new annual Spotlight Issues, considering the most important trends in the sector; and update the methodology to ensure that it stays current and acts as a driver of industry best practice on transparency.

The methodology is based upon alignment with existing international standards and benchmarks such as the UN Guiding Principles and SDGs, OECD Due Diligence Guidelines, ILO conventions, ACT, Know The Chain, IHRB Responsible Recruitment Toolkit, the Transparency Pledge, among others.

There are currently 220 indicators in the Global Fashion Transparency Index and 221 in the Fashion Transparency Index Brasil12. The weighting of the scores is intended to emphasise increasing levels

of detailed and granular disclosure, especially when it comes to publishing supplier lists, audit findings, wage data, etc. In other words, we reward disclosure that enables external stakeholders to meaningfully use that information to hold brands to account.

It is important to mention that when brands score zero points, it does not necessarily mean that they do not have initiatives, programs or policies in place.

This may just mean that they are not publicly disclosing their actions.

Changes to the methodology may affect year-on-year comparability of the results.

Where brands may have scored one or two percentage points up or down compared to last year this could be due to changes in the methodology. There are other notable limits to this type of deskbased research. First of all, human error

2. Learn more in ‘Adapting the methodology to the Brazilian context’

is entirely possible, since there are 221 indicators in the Brazilian methodology for 2020, applied to 40 brands, adding up to more than 8 thousand individual data points. Besides that, some brands publish annual reports that span +400 pages, with footnotes and appendices and each with its specific format, which leaves room for a margin of error in both data collection and comparison. Secondly, the data captures a moment in time and brands may disclose or retract information at any time. However, we try our best to be as thorough, meticulous, objective and fair as possible.

This is why we urge you to focus on the ranges in which brands score rather than their individual scores. The ranges reveal patterns of industry disclosure rather than precise measurements.

Finally, we would like to stress that the Index does not offer an in-depth analysis of the credibility, authenticity or accuracy of brands' policies, procedures, performance and progress in any given area. Verification of claims made by brands and retailers is beyond the scope of this research. We hope you use this information to query their claims.

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How we calculate the findings: • All scores have been calculated to two decimal places (in the complete data set) and then rounded to the nearest whole percentage point (what you will read in this report).

• For the most part, year-on-year differences in scores are described as the change in percentage points, which means the actual amount of change, rather than the percent, which means the rate of change (unless explicitly stated otherwise). For instance, if a brand scored 30% in one year and 45% in the next, we are usually reporting that the brand increased by 15 percentage points (45-30=15) rather than saying the brand increased by a 50% rate of change (45/30=1.5).

• All averages in this report represent the mean.

• Where a score may have been rounded to the nearest percentage point in previous editions, we are calculating the yearon- year difference according to the rounded figures rather than to the exact decimal points. For example, where the average score in a particular section is 17.74%, we have rounded this up to 18%. If a previous year’s report the average score in that section was 12.41% we rounded it down to 12% in the report. Therefore, the year-on-year difference is technically 5.33 percentage points, but if we go by the nearest rounded figures it is 6 percentage points.

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“ Transparency is the first step towards a different culture, one where brands become open and accountable, and customers are ready to become vigilant and ask,‘who made my clothes?‘“ Orsola de Castro Co-founder, Fashion Revolution

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WEIGHTING OF THE SCORES 1.

2.

POLICY & COMMITMENTS

GOVERNANCE Here we look at who on the executive board has responsibility for social and environmental performance, how this is implemented, how social and environmental improvements are linked to employee, CEO and supplier performance, and whether the relevant department and person in charge can be easily contacted by the public.

This section explores brands’ social and environmental policies for both their own employees and workers in the supply chain, how these policies are implemented, how the company prioritises issues, what goals it has in place and if they’re reporting annual progress.

WEIGHTING (%)

3.

18.8%

4.8%

4.

TRACEABILITY In this section we look for brands to publish supplier lists at three levels: manufacturing, processing facilities and mills, and raw materials. We also look for extra details such as supplier address, number of workers, gender breakdown, number of migrant workers, union representation and when the list was last updated.

31.6%

5.

KNOW, SHOW & FIX Here we review what brands disclose about their due diligence processes, how they assess suppliers against their policies, what are the results of these assessments, what do they do when problems are found, how workers can file complaints and how these are addressed.

25.2%

SPOTLIGHT ISSUES In this final section we explore what brands are doing to address forced labour, gender equality, living wages, freedom of association, waste, circularity, overproduction, use of more sustainable materials, microplastics, deforestation, climate change and water use.

19.6%

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HOW THE RESEARCH IS CONDUCTED

RESEARCH PROCESS

The research process is divided into three phases. In the first phase, the team carries out a preliminary study of the data using information made publicly available by brands.

We include what we have found in the brand questionnaire.

Next, in the second phase, the questionnaires containing this preliminary information are sent to the brands themselves, so that each may identify and include information that may not have been found by our research team. For this version of the Index, the brands had about a month to revise and complete the questionnaire. Finally, in the third phase, the completed questionnaires were once again evaluated by our team. Only when appropriate was the information included by the brands accepted and points awarded.

August - November 2019 Updates to global methodology: annual review of the methodology and brand questionnaire, including adjustments when necessary, as well as the selection of new Spotlight Issues.

Some brands declined to participate in the second phase of the evaluation process. However, we stress that our researchers have evaluated and scored all the brands regardless of whether they have received feedback from the brands. Again, it is also important to remember that the methodology is based exclusively on the analysis of publicly available information.

The data research was conducted by the teams of Fashion Revolution Brasil, Fashion Revolution CIC and ABC Associados. Should you notice any errors, we suggest you contact us by e-mail at educacional.brasil@ fashionrevolution.org and we shall take the comments into consideration for the following edition.

August - September Final questionnaire responses reviewed: after about a month, the brands return the completed questionnaires and the research team reviews each answer and awards additional points where sufficient disclosure has been made. In this stage of the process, the research team conducts several rounds of data quality assurance checks before finalising each questionnaire and the scoring.

April Updates to the Brazilian methodology: annual review based on the adjustments made to the global methodology and the need for possible adaptations to the Brazilian context. Selection of 10 new companies to be included in the survey.

July Questionnaires sent to the brands: the brands are invited to fill in the questionnaires with any additional data that our research team may not have found and/ or more up-to-date public information.

September - November Data is compiled, analysis is completed, and report is prepared: data from each brand questionnaire is transferred into one large complete dataset, which is used to analyse final results, determine year-on-year progress and pull out interesting findings. The dataset is used as a base for the production of this final report.

May - June

Research and engagement with selected brands and retailers: the research team reviews each brand and pre-populate their questionnaire with evidence of the relevant public disclosure. Next, there is a review round to check the accuracy of the answers found. At the same time, two meetings are held with representatives of the brands, for the presentation of the project, promotion of thoughts about the importance of greater transparency and to explain the methodology and research process for the Index.

November Launch of the Fashion Transparency Index Brazil: the 2020 edition is launched online in partnership with Rio Ethical Fashion.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

HOW BRANDS AND RETAILERS ARE SELECTED The process for choosing the brands31 evaluated was carried out jointly by the teams of Fashion Revolution Brazil and ABC Associados, with the basic criterion that this third edition of the Fashion Transparency Index Brazil would analyse 40 brands. We understand that the size of the sample is still not enough to represent the Brazilian fashion market as a whole, and therefore we have chosen brands from different segments to cover the diversity of the sector. This covers brands representing the following market segments: retailers, denim, clothes for young people, casual wear, luxury, adult wear, footwear, sportswear, beachwear and underwear.

In cases where the information found refers to a group that has several brands, we have selected the brand, or brands, that appear to be most significant in terms of turnover and by consumer recognition (Top of Mind). We have intentionally listed the brands and not the controlling groups, as consumers are more familiar with brands names rather than the groups.

The selection of the brands in each segment was based upon three factors: business size by annual turnover; diversity of market segments; and position of the brand as Top of Mind4.2

This year 52,5% of brands participated by returning a completed questionnaire. We include brands in the Index regardless of whether they participate or not. However, brands that participate typically receive higher scores than they would otherwise because they are able to identify relevant disclosure that our researchers may have missed.

We relied on publicly available financial information to select brands and retailers.

Some companies are privately held and do not publish financial records, including turnover. In these cases, we rely on thirdparty publications, with wide national coverage, with estimates of turnover and business size.

23

H OW M A N Y B R A N D S PA R T I C I PAT E D T H I S Y E A R ?

52,5%

35%

Completed and returned a questionnaire

Did not respond

The 30 brands and retailers reviewed and evaluated in the 2019 report have been kept on in this edition, with the addition of a further 10 brands. In 2021, we plan to continue increasing the number of companies analysed.

3. Note: normally we only use the term ‘brands’ to mean both fashion labels and retailers.

4. Top of Mind is a term used as a way of establishing the brands that are most popular, according to the consumers’ minds

12,5%

Declined the opportunity to complete the questionnaire

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

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THE 40 BRANDS SELECTED

= participated in brand questionnaire

Animale (Grupo Soma)

Farm (Grupo Soma)

Moleca (Calçados Beira Rio S. A.)

Arezzo (Arezzo&Co)

Forum (AMC Têxtil)

Netshoes (Magazine Luiza)

Brooksfield (Grupo Via Veneto)

Havaianas (Alpargatas)

Olympikus (Vulcabrás)

Carmen Steffens (Couroquímica/Carmen Steffens)

Hering (Cia Hering)

Osklen (Alpargatas)

C&A

Ipanema (Grendene)

Pernambucanas

Centauro

John John (Restoque)

Puket (Grupo Uni.co)

Cia. Marítima (Grupo Rosset)

Le Lis Blanc Deux (Restoque)

Renner (Lojas Renner S.A.)

Colcci (AMC Têxtil)

Leader

Riachuelo (Grupo Guararapes)

Colombo

Lojas Avenida (Grupo Avenida)

TNG

Dafiti (GFG LatAm)

Lojas Pompéia (Grupo Lins Ferrão )

Torra

Decathlon

Lupo

Youcom (Lojas Renner S.A.)

Di Santinni

Malwee (Grupo Malwee)

Zara (Inditex)

Dumond (Grupo Paquetá)

Marisa

Ellus (InBrands)

Melissa (Grendene)

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

2 THE FINAL SCORES

25

To access the complete data set click here.

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX 2020

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A GUIDE TO THE SCORING 0—10%

11—20%

21—30%

There are 250 total possible points. Final scores have been converted into percentages and rounded to the nearest whole number. Please focus on the range in which brands score rather than their individual scores as this gives you a more accurate picture of trends in transparency across the industry.

31—40%

41—50%

51—60%

61—70%

71—80%

81—90%

91—100%

TRANSPARENCY Brands that get a score of between 0 and 5% are disclosing nothing at all or a very limited number of policies, that are often related to brands own practices for hiring workers, or local community engagement activities.

Brands scoring between 5% and 10% tend to publish some policies for both its employees and suppliers.

Brands scoring between 11-20% are likely to be publishing many policies, some procedures and some information about their supplier assessment and remediation processes. These brands are unlikely to be publishing supplier lists and won’t be sharing much information, if anything, about our Spotlight Issues.

Brands scored between 21% and 30% are likely to be publishing much more detailed information about their policies, procedures, social and environmental goals and supplier assessment and remediation processes.

These brands may be publishing a supplier list but with few details other than the facility name and address. The brands will not be sharing information about the outcomes of their supplier assessments or grievance channels. These brands will not widely be disclosing information on the Spotlight Issues but may touch upon a few.

Brands scoring between 31% and 40% are the brands that are publishing lists of suppliers as well as detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes.

These brands are also more likely to be disclosing information on a few of the Spotlight Issues such as gender pay gap, use of more sustainable materials, textile waste and their carbon emissions at company level.

Brands scoring between 41% and 50% are those that are most likely to be publishing more detailed supplier lists. Many will be publishing processing facilities as well as manufacturers – in addition to detailed information about their policies, procedures, social and environmental goals, supplier assessment and remediation processes and some supplier assessment findings.

These brands are also more likely to be addressing the Spotlight Issues such as gender equality, collective bargaining, use of more sustainable materials, textile waste, circularity, and their carbon and water footprint at company level. In 2020 only one company scored within this range.

Brands scoring between 51% and 60% are disclosing all of the information already described in the other ranges and will be publishing more detailed lists of suppliers, from manufacturers to raw materials. They will be publishing some detailed information about the findings of their supplier assessments and tend to be addressing many of the Spotlight Issues such as forced labour, gender equality, use of more sustainable materials, textile waste, and their carbon and water footprint at company level and in the supply chain.

Brands scoring between 61% and 70% are disclosing all of the information already described in other ranges and will be publishing detailed supplier lists, which include manufacturers as well as processing facilities and some suppliers of raw materials such as cotton or viscose. These brands will be sharing relatively more information than any other brands in the Index on the Spotlight Issues. In 2020, only one brand scored in this category.

Brands scoring 71-80% are disclosing all of the information already described in the other ranges and will be publishing detailed supplier lists for manufacturers, processing facilities and suppliers of raw materials.

These brands will be publishing detailed information about their due diligence processes and outcomes, supplier assessments and remediation findings.

These brands will be sharing comparatively more comprehensive and detailed information and data than any other brands in the Index on the Spotlight Issues. In 2020, only one company scored in this range.

No brands score above 80% but if they did these brands would be disclosing all of the information already described as well as publishing detailed information about supplier assessment and remediation findings for specific facilities. They would also be sharing detailed supplier lists for at least 95% of all suppliers from manufacturing right down to raw materials. These brands would be mapping social and environmental impacts into their financial business model and disclosing ample data on their use of sustainable materials and would provide sexdisaggregated data on job roles within their own operations and in the supply chain. We would be able to find detailed information about the company’s purchasing practices, the company’s approach and progress towards tackling forced or bonded labor and living wages for workers in their supply chain. These brands would be disclosing their carbon emissions, use of renewable energy and water footprint from their own operations right down to raw material level.

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THE FINAL SCORES 0 - 10%

11 - 20%

LUPO

9%

ELLUS

AREZZO

21 - 30%

31 - 40%

41 - 50%

RIACHUELO

30%

ZARA

40%

5%

DECATHLON

24%

MELISSA

CENTAURO

3%

FARM

24%

DUMOND

3%

ANIMALE

NETSHOES

2%

TORRA

2%

PUKET

1%

BROOKSFIELD

0%

CARMEN STEFFENS

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DI SANTINNI

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

LOJAS POMPÉIA

0%

MOLECA

0%

OLYMPIKUS

0%

TNG

0%

12%

DAFITI

51 - 60%

61 - 70%

RENNER

59%

39%

YOUCOM

59%

IPANEMA

38%

HERING

57%

21%

PERNAMBUCANAS

38%

HAVAIANAS

55%

JOHN JOHN

21%

MARISA

34%

OSKLEN

51%

LE LIS BLANC

21%

42%

* Brands ranked in numerical order by score out of 250, but shown as rounded-up percentage. Where brands have the same percentage score, they are listed in alphabetical order

MALWEE

71 - 80% 68%

C&A

81 - 90% 74%

91 - 100%

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QUICK FINDINGS

13 brands (33%) scored 0

No brand scored above 80%

Average score is 52 (21%) out of 250 points

Only one brand scored higher than 70%

NO. OF BRANDS

15

10

5

0

1-10

11-20

21-30

31-40

41-50

51-60

61-70

71-80

81-90

91-100

FINAL SCORE (%)

TRANSPARENCY

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

3 THE FINAL SCORES ACROSS THE 5 SECTIONS

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FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

30

AVERAGE SCORES ACROSS THE SECTIONS 1.

32%

2.

24%

3.

25%

4.

14%

5.

11%

POLICY & COMMITMENTS

GOVERNANCE

TRACEABILITY

KNOW, SHOW & FIX

SPOTLIGHT ISSUES

The brands that scored the most points in this section were C&A, Zara, Hering and Malwee with 93%, 87%, 80% and 80% respectively, working out at 44, 41 and 38 out of the 47 available points. Only 12 of the brands (30%) scored over 50%.

Malwee was the brand that got the highest score in this section: 92% of all available points. C&A and Zara came in second, both with 83%, and a concentration of scoring brands (9 brands) were in the bracket between 31% and 40%.

Nineteen brands scored no points at all in this section. This shows a lack of disclosure by most of the brands, regarding who is responsible for social and environmental issues within the company, and their contact information. In addition, very little is disclosed about accountability at the board level and about how the teams (beyond the sustainability one) and the suppliers are encouraged to improve their social and the environmental performance.

Half of the brands scored between 0 to 10% in this section, providing very little or no information about their supply chain due diligence and remediation processes. Only one brand (C&A) scored above 50% and 5 brands (Malwee, Havaianas, Hering, Osklen and Zara) scored between 41 and 50%. The rest of the brands (14 brands) got scores between 11% and 30%.

This is the section with the lowest average score this year, and the smallest increase compared to 2019: only 2 percentage points. The brands that stood out the most in this area were C&A, with 59%, and Zara, with 45%.

Although 17 (43%) brands are located in the lowest score range (0-10%), there was an increase of 4 percentage points in the overall average score of this section from 2019 to 2020. If we compare only the performance of the 20 brands reviewed since 2018, it is possible to observe a growth of 15 percentage points in section 1.

We have seen an increase in the number of brands that have published their suppliers list this year. In 2020, 17 (43%) brands published their lists of Tier 1 suppliers; 13 (33%) disclosed processing and finishing facilities, and 8 (20%) published some data on their suppliers of raw materials. The 5 brands that scored the highest in this category were Havaianas, with 95%, followed

by Malwee with 94%, and by C&A, Renner and Youcom, all with 82%.

Comparing this section with the others, we continue to see brands disclose more about their policies and commitments on social and environmental issues than about the other issues in this report.

Compared with the result for 2019, there was a slight increase of 3 percentage points in the average of this section. However, if we compare only the performance of the 20 brands reviewed since 2018, it is possible to observe an increase of 9 percentage points.

Between 2019 and 2020, this was the section that showed the greatest evolution considering the total number of brands, showing a rise of 8 percentage points in the overall average from one year to the next. If we take into account only the 20 brands reviewed since 2018, this increase becomes quite significant, presenting a growth of 28 percentage points in the overall average of the brands from one year to the next.

Compared to the results of the global index, we notice that this is the only section where Brazil has performed better than the global report findings, with an average score of 25% against 16%.

Many brands share information about their policies for supplier compliance. However, they still share little information about the results of these efforts, and what they do when non-compliances are identified within their supply chains.

This section slightly increased by 4 percentage points compared to 2019 but, if we compare only the 20 brands reviewed since 2018, we can see an increase of 11 percentage points in the overall average.

Thirty one of the brands (78%) scored below 20% and of these, 18 brands zeroed. This means that they publish little or no information related to their working conditions (in line with SDG 8: Decent Work and Economic Growth), gender equality (in line with SDG 5: Gender equality) and racial equality and discrimination between nationalities (in line with SDG 10: Reduced Inequalities). In addition, they lack information on how brands address issues related to the consumption and composition of their materials / products (in line with SDG 12: Responsible consumption and production) and their measures to work for sustainable and efficient management of natural resources (in line with SDG 13: Action against global climate change).

In the previous edition, we considered the percentage variation to calculate the differences between the scores of 2018 and 2019. This year, we are considering the difference of percentage points between one year and another.

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1. POLICY & COMMITMENTS APPROACH What human rights and environmental policies and procedures do retailers and brands publicly disclose?

In this section, we research which policies and procedures the brands disclose at both the company level (related to employees of their own operations at headquarters, stores, warehouses, and their own production facilities) and at supplier level (through a code of conduct or other supplier guidance document).

Social and environmental priorities with measurable and long-term goals In this section, we also analyse whether brands and retailers are disclosing how they prioritise human rights and environmental issues, typically found in the form of materiality assessment, highlighting the issues most relevant or with the highest risk for brands and their stakeholders.

In addition, we research whether brands are publishing their goals or a strategic roadmap for improving their social and environmental impacts across the value chain. We only counted these goals if they were timebound, measurable. The companies also scored an additional point if they report on annual progress towards achieving these goals.

Finally, we analyse whether brands and retailers have their annual sustainability or corporate social responsibility (CSR) reports audited by an independent third party, typically this is conducted by a large global accounting firm.

We analysed the following issues: • Animal Welfare

• Health and Safety

• Annual Leave and Public Holidays

• Living Conditions/Dormitories

• Anti-bribery, Corruption, and Presentation of False Information

• Maternity Rights and Parental Leave

• Biodiversity and Conservation

• Notice period, Dismissal and Disciplinary Action

• Child Labour

• Overtime Pay

• Community Engagement

• Restricted Substances List

• Contracts and Terms of Employment

• Sub-contracting, Outsourcing and Homeworkers

• Discrimination • Diversity and Inclusion • Energy and Carbon Emissions • Equal Pay • Forced or Bonded Labour • Foreign and Migrant Labour • Freedom of Association, Right to Organize and Collective Bargaining • Harassment and Violence

• Wages and Financial Benefits (for example: bonus, insurance, social security, pension) • Waste and Recycling (Packaging/Office/Retail) • Waste and Recycling (Products/Textiles) • Water Effluents and Treatment • Water Usage and Footprint • Working Hours and Rest Breaks

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1. POLICY & COMMITMENTS RESULTS 0 - 10%

11 - 20%

CENTAURO

9%

TORRA

DUMOND

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

71 - 80%

81 - 90%

AREZZO

29%

FARM

40%

IPANEMA

48%

RIACHUELO

59%

DAFITI

69%

HERING

80%

9%

ANIMALE

27%

MARISA

37%

MELISSA

48%

HAVAIANAS

55%

OSKLEN

67%

MALWEE

80%

NETSHOES

5%

ELLUS

24%

LUPO

34%

JOHN JOHN

46%

DECATHLON

62%

RENNER

76%

CIA. MARÍTIMA

2%

LE LIS BLANC

45%

YOUCOM

76%

MOLECA

2%

PERNAMBUCANAS

73%

PUKET

2%

LOJAS POMPÉIA

1%

BROOKSFIELD

0%

CARMEN STEFFENS

0%

COLCCI

0%

COLOMBO

0%

DI SANTINNI

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

OLYMPIKUS

0%

TNG

0%

13%

* The brands are classified in numerical order within a maximum score of 47 points and presented here as a rounded percentage. When the brands have the same percentage score, they are listed in alphabetical order.

ZARA

91 - 100% 87%

C&A

93%

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1. POLICY & COMMITMENTS FINDINGS H OW M A N Y B R A N D S P U B L I S H R E L E VA N T P O L I C I E S ?

Forced or Bonded Labour Child Labour Discrimination Health and Safety Freedom of Association, Right to Organize and Collective Bargaining Anti-bribery, Corruption, and Presentation of False Information Harassment and Violence Sub-contracting, Outsourcing and Homeworkers Notice period, Dismissal and Disciplinary Action Water Effluents and Treatment Working Hours and Rest Breaks Foreign and Migrant Labour Overtime Pay Living Conditions/Dormitories Contracts and Terms of Employment Equal Pay Wages and Financial Benefits (for example: bonus, insurance, social security, pension) Water Usage and Footprint Energy and Carbon Emissions Waste and Recycling (Products/Textiles) Waste and Recycling (Packaging/Office/Retail) Maternity Rights and Parental Leave Community Engagement Annual Leave and Public Holidays Biodiversity and Conservation Supplier policies Company policies Procedures

Diversity and Inclusion Restricted Substances List Animal Welfare 0

20

40

1. Graph ordered by the most common supplier policies. - 2. Policies on Living Conditions/Dormitories, Water Effluents and Treatment, Foreign and Migrant Labour, Overtime Payments, Sub-contracting, Outsourcing and Homeworkers, Forced or Bonded Labour and Child Labour are categories that were analysed only when applied to suppliers. While policies about Animal Welfare, Diversity and Inclusion and Restricted Substances List were analysed only in relation to the company's direct employees.

60

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1. POLICY & COMMITMENTS FINDINGS I M P L E M E N TAT I O N O F P O L I C I E S

ANIMAL WELFARE

BIODIVERSITY & CONSERVATION

COMMUNITY ENGAGEMENT

10%

15%

25%

15%

50%

18%

Publish a company policy

Disclose how this policy is implemented in practice

Publish a company policy

Publish supplier policies

Publish a company policy on this topic

Publish supplier policies

DIVERSITY & INCLUSION

HARASSMENT & VIOLENCE

FORCED OR BONDED LABOUR

40%

35%

45%

10%

58%

25%

Publish a company policy on this topic

Disclose how this policy is implemented in practice

Publish a company policy on this topic

Disclose how this policy is implemented in practice

Publish supplier policies on this topic

Disclose how this policy is implemented in practice

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

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1. POLICY & COMMITMENTS FINDINGS A N N UA L P R O G R E S S

WASTE AND RECYCLING (PRODUCTS/TEXTILES)

EMPLOYEE WAGES & BENEFITS

RESTRICTED SUBSTANCES LIST

EQUAL PAY

48 38 30

33

30

30

25

20

20

25

20 10

2018

2019

2020

% of brands that publish a company policy on product and textile waste and recycling

2018

2019

2020

% that publish employee policies on wages and benefits

2018

2019

2020

% that publish a restricted substances list

2018

2019

2020

% publish employee policies on equal pay

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1. POLICY & COMMITMENTS ANALYSIS Even though this is the area in which brands disclose the most information, the Policy and Commitments section has grown little over the years Although the Policy and Commitments section is the best scored by brands since 2018, we can notice that there has been no evolution in the average score of the section since the first edition of the Brazil Fashion Transparency Index. In 2020, the overall average for the section among the 40 brands and retailers analysed in the Brazilian Index was 32%, contrasting with the average of 52% of the 250 brands analysed by the global Fashion Transparency Index.

In that way, although the brands analysed in the national edition continue to disclose more information about their policies and commitments in the other sections of the Index, there is still a long way to go for these brands to increase this disclosure, both in relation to their own employees and their suppliers, as well as how these policies are implemented in practice.

The top scoring brands in the 2020 Policies and Commitments section were C&A with 93% and Zara with 87%, which means they are releasing extensive information on their policies, procedures, and social and environmental goals.

Closely behind are Hering and Malwee, both with 80%.

business models, which are usually the result of the materiality analysis process.

We found that only 35% of the brands disclose their processes to do this type of analysis, as well as their results.

Despite still being a low result, we noticed an increase of 8 percentage points compared to the 2019 results (27%).

In total, only 12 brands (30% of brands) scored over 50% in this section, which indicates that there is still an enormous room for improvement in relation to the transparency of the companies reviewed.

Furthermore, much more efforts will be needed for brands to reveal information about how environmental and social issues are prioritized in their business, as well as their goals for improving human rights aspects and long-term environmental impacts.

Few brands disclose goals towards improving social and environmental impacts, even fewer publish the progress towards achieving these goals

How brands and retailers prioritize human rights and environmental issues

When we look at whether brands are publishing annual progress of these commitments or goals, only 15% of the companies annually update their progress on their human rights goals and 28% report their progress on environmental goals. Despite still being extremely low

During the research, our team sought information about how companies identify and prioritize environmental and human rights issues related to their

Regarding the long-term, measurable commitments or goals established by the companies, we note that only 20% of them publish their plans aimed at improving human rights issues and 33% publish their goals to reduce their environmental impacts.

results, we observed that the brands are publishing more about their progress for goals related to environmental issues than in previous years, showing a growth of 15 percentage points compared to the 2019 results (13%).

Stagnation of policies related to Child Labour and Forced or Bonded Labour When it comes to supply chain policies, the most publicized themes are child labour (58%) and forced and bonded labour (58%). Although these are the most addressed topics within supplier policies, 58% still a low percentage considering their severity. We have also noted a large difference compared to the results of the global Index, in which 92% of companies are disclosing their policies related to forced labour.

In addition, we have observed very little growth in disclosure on the topics of child labour and forced or bonded labour.

In 2018, 60% of the 20 brands analysed disclosed their policies on child labour and forced or bonded labour, rising to 53% of 30 brands analysed in 2019 and then 58% of 40 brands analysed this year

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1. POLICY & COMMITMENTS ANALYSIS which may demonstrate a little concern on the part of some brands in addressing such a sensitive issue. We also found that only 23% of the brands analysed report their procedures to ensure that their policies to combat child labour are put into practice and only 25% report their procedures to combat forced labour.

by companies for their employees or suppliers, they are not able to act on the root cause of gender inequality in an effective way, since those who are able to get ahead are, in the overwhelmingly majority of cases, the ones who already start from privileges derived from their social class, race or gender.

Gender equality

In addition, when we look at policies related to harassment and violence, 53% of the brands analysed disclose their policies applied to direct employees and 45% in relation to supply chain workers.

However, only 10% of the brands disclose their procedures to ensure that these policies are implemented.

We note that only 30% of the brands disclose their policies for equal pay between men and women in relation to their direct employees and for workers in their supply chain. Although, this average has increased by a significant 15 percentage points since 2018 (15% that year), we can observe that only 3 brands (8%) analysed, C&A, Pernambucanas and Zara, report how these policies are being put into practice.

It is important to emphasise that many brands use the concept of meritocracy as a criteria to determine the level of equality of their wages or which employees get promoted. Although these may be legitimate policies established

Meanwhile, 33% of companies publish policies related to maternity and parental leave for their employees and only 18% disclose these policies aimed at their supply chain workers. When it comes to informing how these policies are put into practice, we observe that 23% of brands disclose their procedures.

Discrimination and diversity

Policies related to the environment

When looking at brand policies applied to direct employees, the most common policies which brands published were about critical issues such as discrimination (60%), anti-bribery and corruption practices (60%) and health and safety (58%).

We have noticed a significant growth in relation to brand policies on environmental issues, such as energy and carbon emissions, water use or water footprint and waste management and/or recycling of products and textiles.

In relation to the 2019 results, more brands are disclosing their policies related to discrimination. Last year, 40% disclosed their policies to suppliers and, in 2020, this number rose to 53% of the brands analysed. Despite this growth, this year only 28% of brands report how they are putting into practice their antidiscrimination policies for both their own employees and suppliers.

Less than half of the brands (40%) disclose policies on diversity and inclusion aimed at their employees and only 35% disclose what actions are being implemented to ensure increased diversity and inclusion internally.

In 2019, only 10% of the brands analysed published their policies on energy and carbon emissions in their supply chains and in 2020 this number rose to 28%.

Even though this number is still low when considering the climate urgency we are facing, we note that 43% of brands disclose their procedures to ensure that these policies are put into practice.

Among the procedures highlighted, we find increased use of energy from renewable sources, transition to the use of LED lamps and increased energy efficiency of production processes.

When we analyse brand policies on water use and footprint for its suppliers, we find an evolution similar to the one highlighted above: 10% of the analysed brands in 2019, increasing to 30% of the analysed brands

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1. POLICY & COMMITMENTS ANALYSIS this year. To ensure that the policies on water use or water footprint are put into practice, 43% of the brands disclosed their actions, which include decreased use of water in internal processes, increased use of materials that consume less water in their manufacture and water reuse.

Since 2018, we have also seen a gradual increase in the disclosure of companies' policies on waste and/or recycling of products and textiles on their own operations. In the first edition of the Index, in 2018, only 6 brands (15%) published their policies on this issue and in 2020, this number increased to 15 brands (38%).

When it comes to initiatives aimed at putting these policies into practice to reduce, reuse or resign textile waste and residues, defective stocks, production samples and/or post-consumption waste, we note that 45% of companies disclose how they are tackling textile waste.

Despite the advances mentioned, the policies least published by the brands about their own operations are policies relating to animal welfare and restricted substances lists. Only 10 brands (25%)

disclose their restricted substances lists and provide evidence of testing for restricted substances.

In relation to animal welfare, only declaring the prohibition of the use of animal derived fibres is not enough to score. We are looking for more comprehensive policies such as "Five Freedoms", which cover issues such as the use of animal-derived materials and breeding free from hunger and thirst, discomfort, pain, fear and with freedom to express the species' natural behaviour.

In this sense, only 4 brands (10%) publish their approach to ensure animal welfare and 6 brands (15%) disclose how this policy is implemented in practice.

" Transparency is respect for consumers, as they must have access to information about what they buy."

Cida Trajano

President at National Workers Confederation of Garment Sector

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VIEWPOINT:

MORE WOMEN, SAME CHALLENGES: HOW FAR DO INCLUSION POLICIES GO?

NANA LIMA THINK EVA AND THINK OLGA IMPACT DIRECTOR

In recent years, the term "female empowerment" has been widely disseminated by the media and adopted as a slogan by several brands.

Society has become aware of the obstacles and violence that women suffer simply because they are women.

We have had important achievements such as the Sexual Importuning Law, the Maria da Penha Law and the possibility of expanding maternity leave for mothers who work under the CLT regime. We have seen the number of women in leadership positions and their participation in almost all markets increase.

Despite assuming leadership positions and corresponding to 50% of entrepreneurs in early stages in Brazil1, women still devote 61 weekly hours to the work of family care and domestic chores2.

Around the world, they devote 12.5 billion hours every day to unpaid care work - a contribution of at least $10.8 trillion a year to the global economy3.

The pandemic, in turn, also proves that we are still far from a social balance. Even with all the advances and achievements, the number of femicides increased by 2% in the first half of 20204, with women of colour being the main victims. Cases of domestic violence have increased with measures to combat the coronavirus and the participation of women in the labour market is the lowest since 1990.

Some companies in the private sector have already understood that they want to retain and expand women's potential, their internal policies and affirmative

actions must go beyond "complying with the law�. Because the existence of a law does not guarantee that it will be respected by all. In Brazil, 48% of women are fired after maternity leave5.

We are in 2020 and these benefits are still interpreted as benefits and not as tools to equate a social imbalance. Mothers who remain in office are evaluated with the same performance rule as their colleagues. Responsibility and care for the child still fall entirely on women and this is something that internal company policy needs to take into consideration.

These measures are crucial for the corporate culture to have inclusion as a value and to be able to eliminate obstacles and meet the needs of all employees. To continue believing in the myth of meritocracy in a country where socioeconomic conditions and access to education are so unequal, is to continue privileging those who have fewer barriers to get there.

Internal policies and affirmative actions do not work if there is no previous work to sensitize the leadership and collaborators about the prejudices and barriers visible and not visible - that women face.

According to a survey on gender equality prepared by Ipsos, 27% of Brazilians feel uncomfortable when their boss is a woman6.

In April 2020, Think Eva and Think Olga created the Women in Times of Pandemic report7, which alerted the private sector about the disproportionate impacts that the pandemic would have on women, especially black women. And now, six months later, we continue to alert and ask everyone to assume their roles and strengthen commitment - and action with all women.

1. https://www.sebrae.com.br/Sebrae/Portal%20Sebrae/UFs/GO/Sebrae%20de%20A%20a%20Z/Empreendedorismo%20Feminino%20no%20Brasil%202019_v5.pdf - 2. https://www.ipea.gov.br/portal/index. php?option=com_content&view=article&id=34450 - 3. https://www.oxfam.org.br/justica-social-e-economica/forum-economico-de-davos/tempo-de-cuidar/ 4. https://g1.globo.com/monitor-da-violencia/noticia/2020/09/16/assassinatos-de-mulheres-sobem-no-1o-semestre-no-brasil-mas-agressoes-e-estupros-caem-especialistas-apontam-subnotificacao-durante-pandemia.ghtml 5. https://portal.fgv.br/sites/portal.fgv.br/files/the_labor_market_consequences_of_maternity_leave_policies_evidence_from_brazil.pdf - 6. https://economia.estadao.com.br/blogs/radar-do-emprego/mais-mulheresna-lideranca-nao-e-sinonimo-de-mulheres-liderando/ - 7. To know more, access https://thinkolga.com/report/

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2. GOVERNANCE APPROACH Who in the company is responsible for social and environmental impacts?

In this section, we look for the department, name and position of the person who holds responsibility for the performance of issues related to human rights and environmental impacts within the company. These contact details are important because they demonstrate an open channel of communication between the brand, its customers and other stakeholders.

We also look for the name of a company board member, or a board committee, who are responsible for human rights and environmental issues and for how oversight of these issues is implemented.

In addition, we also seek direct contact details for the responsible department, such as the sustainability or corporate social responsibility team.

The social and environmental impacts of the company are usually dealt with by an ethics or sustainability committee, which reports directly to the board. Assigning responsibility for the company's social and environmental practices to the board demonstrates the level of seriousness that these matters are treated internally, both in relation to its own management and to the impacts along its supply chain.

Incentives for executives, employees and suppliers as way to improve performance We analyse whether brands are disclosing how their employees, beyond the sustainability/corporate social responsibility (CSR) team, such as purchasing teams, style, product development, etc., are encouraged through bonuses and incentives linked to performance targets, to achieve improvements in social and environmental impacts.

We look for the same information to be shared linking CEO and executive level pay and incentives to the performance of the company's social and environmental impacts.

Finally, we also looked to see if suppliers’ incentives are linked to improvements in human rights impacts and environmental management. The types of incentives we were looking for included brands committing to long-term contracts, increased order size, price premiums and fewer audits.

38%

of brands discloses the name and contact of the person responsible for human rights and environmental impacts in the business

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2. GOVERNANCE RESULTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

AREZZO

8%

DECATHLON

17%

ANIMALE

33%

DAFITI

50%

BROOKSFIELD

0%

LUPO

17%

FARM

33%

PERNAMBUCANAS

50%

CARMEN STEFFENS

0%

HAVAIANAS

33%

CENTAURO

0%

IPANEMA

33%

CIA. MARÍTIMA

0%

JOHN JOHN

33%

COLCCI

0%

LE LIS BLANC

33%

COLOMBO

0%

MARISA

33%

DI SANTINNI

0%

MELISSA

33%

DUMOND

0%

RIACHUELO

33%

ELLUS

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

LOJAS POMPÉIA

0%

MOLECA

0%

NETSHOES

0%

OLYMPIKUS

0%

PUKET

0%

TNG

0%

TORRA

0%

HERING

* The brands are ranked in numerical order within a maximum score of 12 points and presented here as a rounded percentage. When the brands have the same percentage score, they are listed in alphabetical order.

61 - 70% 58%

OSKLEN

71 - 80% 67%

81 - 90%

91 - 100%

RENNER

75%

C&A

83%

YOUCOM

75%

ZARA

83%

MALWEE

92%

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2. GOVERNANCE FINDINGS HOW EASILY CAN YOU CONTACT A BRAND?

BOARD LEVEL ACCOUNTABILITY

48%

38%

8%

20%

publish direct contact information with the sustainability/CSR department

disclose the name and direct contacts of the person with lead responsibility for human rights issues and environmental impacts

disclose the name of the board member or committee responsible for human rights and environmental issues

disclose a description of how the board's accountability is implemented in practice

18%

15%

15%

disclose that bonuses and incentives of employees beyond the CSR/sustainability team are linked to improvements in human rights management and environment

disclose that bonuses and incentives of executives are linked to improvements in human rights management and environment

disclose how supplier incentives are linked to improvements in the management of good labour and environmental practices

INCENTIVES TO IMPROVE PERFORMANCE

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2. GOVERNANCE ANALYSIS Allowing customers and stakeholders to contact A simple act of transparency that brands can adopt is to provide an easy way to get in direct contact with the corporate social responsibility or sustainability department. This allows an open line of communication between the brand, its customers and other stakeholders who want to ask a question or raise a concern.

Therefore, we analysed if the brands are sharing an email address or direct phone number to this department, and we found that 48% of the brands publish one. We also identified that 38% of companies disclose the name and direct contacts of the person with lead responsibility for human rights issues and environmental impacts for the company, representing a growth of 11 percentage points compared to 2019 (27%).

Only 7 brands (18%) scored above 50% in this section, with the highest scores this year being Malwee with 92% and C&A and Zara, both with 83%. Meanwhile, 48% of the

brands have scored zero, highlighting how difficult it is for consumers to establish a direct communication with brands and retailers who often only publish contacts related to sales channels and product changes such as, for instance, emails from customer service center and virtual store attendance.

Board level accountability for human rights and environmental impacts CEOs are beginning to realize how critical sustainability issues are for the future of their business. A recent study of 1,000 global executives conducted by the Accenture consultancy and the UN Global Compact (2019)1 shows that the business community can and should make a much greater contribution to achieving the Sustainable Development Goals (SDGs) by 2030. Surprisingly, this study also demonstrated that 88% of CEOs "believe that our global economic systems need to focus again on equitable growth�.

1. https://www.accenture.com/_acnmedia/PDF-109/Accenture-UNGC-CEO-Study.pdf#zoom=40

However, only 8% of companies disclose the board member, or the board committee, responsible for human rights and environmental issues, while 20% publish a description of how accountability is implemented by the board in practice.

improvements in these areas. We found that 18% of brands publish information about how employees (e.g. those working in designing, sourcing, buying, merchandising, production) incentives are tied to improvements in human rights impacts and environmental performance.

Encouraging improvements in human rights and environmental impacts

Meanwhile, only 15% of brands report how the benefits of their executives (e.g. CEO, CFO, directors) are linked to these improvements, an increase of 8 percentage points over last year's report. Even with slight growth, these numbers make us question how seriously companies are addressing these issues.

We seek information on how companies are encouraging their direct employees, including executives, and suppliers to improve their performance linked to human rights aspects and environmental impacts through performance analyses, wages, bonuses and incentives.

We looked to see whether brands are incentivising their own employees, company executives and suppliers to improve human rights impacts and environmental performance. By incentives for employees and executives, we mean whether their job performance reviews, pay and bonuses are tied to

In relation to suppliers, we observe that only 15% of the brands disclose descriptions of how supplier incentives are linked to improvements in the management of good labour practices and environment such as, for instance, through long term buying compromises, longer contracts and orders increase.

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VIEWPOINT:

IN BRAZIL, INEQUALITY HAS A RACE

VIVIANA SANTIAGO PROFESSOR, COLUMNIST AND CONSULTANT IN ETHNO-RACIAL AND GENDER RELATIONS

The 2030 Sustainable Development agenda highlights that the current development model puts us at risk. A new model is needed to meet the needs of the current population without threatening the planet's ability to meet the needs of future generations. This will not be achievable unless we progress together.

A key topic on the 2030 agenda is the SDG 10 which challenges the world to reduce inequalities. We are currently experiencing the biggest income inequality since 19401, with highly unequal distributions of wealth and a growing divide between the opportunities people have access to. Sustainable development will need to ensure that inequalities are reduced and that everyone has an opportunity to thrive.

In the Brazilian context it is impossible to think about inequality without bringing racial issues to the centre, here inequality has a race.

People of colour’s rights continue to be neglected, as they have been historically.

When we talk about new forms of consumption and new forms of production, we are dealing with a racial issue. New forms of consumption imply recognizing people who consume in their totality and diversity, as well as new forms of production requiring inclusive systems and outcomes where everyone is represented in what is created and offered.

How is it possible to have policies, practices and define courses of action without data? How can progress be measured? How can you celebrate good practices? Disaggregating and presenting data on race and gender means bringing forward the immense challenge - and debt - and dealing with it objectively in the search for solutions.

Black and mixed race people are more than half of the Brazilian population2. I ask myself, would it benefit anyone to leave more than half of a country behind? How can we ensure growth if we continue not to invest in racial equity and support everyone in reaching their full potential, through access to opportunities.

This change begins with seeing and acknowledging inequality and taking action to fight against it. Disaggregating data and publicly communicating it is a first step, but it must not stop there. How can we change something we cannot, or chose not to see?

We know that today people of colour are still treated unfairly in fashion. Brilliant people, full of talent and potential, that are left behind due to the colour of their skin, those that can revolutionise the industry given the means. Any efforts that a brand makes will not be sufficient if they are not made from an intersectional perspective that confronts racial and gender injustice.

How can we talk about a revolution in fashion, a fashion industry that is disruptive, and one that inspires the construction of a better world, if it is not built by all the people who make up society? How can fashion be inclusive if the companies that build it are not?

1. https://gtagenda2030.org.br/relatorio-luz/ - 2. https://sidra.ibge.gov.br/tabela/6403#resultado

Using data disaggregated by race and gender enables us to identify the gaps that exist within the current systems, so that they can be appropriately remediated and addressed. Casting light on areas that need to be improved in order to reduce inequalities is essential, especially to highlight the responsibility - and to galvanise - those who are committed to a revolution.

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3. TRACEABILITY APPROACH Do brands publish their supplier lists? What is the level of detail of this information?

This section analysed whether brands publish supplier lists and what level of detail brands are disclosing about these suppliers.

We seek to know if brands share information like: •

The address of the facility

•

% of migrant or contract workers

•

The types of products/services made

•

Name of parent company

in each supplier facility

•

The business relationship between

•

Approximate number of workers

•

Sex-disaggregated breakdown of workers at each site

•

Race breakdown of workers at each site

•

If the facility has a trade union

•

If the facility has an independent worker committee

facilities at different levels of their supply chain •

If the list is available as a CSV or Excel spreadsheet

•

If the list was updated within the past 6 months

Disclosure of factories, processing facilities and suppliers of raw materials We search for supplier lists on three levels.

The first indicates where the brands and retailers produce their clothes, in other words, the facilities with which the brands have a direct relationship and which typically do the cutting, sewing and final finishing of the products.

On the second level, we seek to know if the brands are disclosing their processing facilities further down the supply chain, such as ginning and spinning, through to subcontractors, dyeing, laundries, wet processes, embroidery, printing and finishing of fabrics.

And finally, we analysed whether brands are disclosing their raw material suppliers, such as fibers, leathers, rubber, dyes, chemical products, metals, etc.

Brands also score when supplier lists are made available in a searchable format, such as Excel or CSV, if they cover more than 95% of their suppliers and if they have been updated in the last 6 or 12 months, in the case of raw material suppliers. We also analyse if the brands are tracing at least one raw material supply chain, such as cotton, leather, down or wool.

43% of brands publish a list of level 1 suppliers

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3. TRACEABILITY RESULTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

DECATHLON

1%

ANIMALE

29%

PERNAMBUCANAS

42%

ZARA

1%

FARM

29%

RIACHUELO

41%

AREZZO

0%

JOHN JOHN

BROOKSFIELD

0%

LE LIS BLANC

CARMEN STEFFENS

0%

CENTAURO

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DI SANTINNI

0%

DUMOND

0%

ELLUS

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

LOJAS POMPÉIA

0%

LUPO

0%

MOLECA

0%

NETSHOES

0%

OLYMPIKUS

0%

PUKET

0%

TNG

0%

TORRA

0%

MARISA

61 - 70%

71 - 80%

OSKLEN

66%

DAFITI

22% 22%

* Brands are ranked in numerical order within a maximum score of 79 points and presented here as a rounded percentage. When the marks have the same percentage score, they are listed in alphabetical order.

56%

HERING

81 - 90%

91 - 100%

C&A

82%

HAVAIANAS

95%

63%

RENNER

82%

MALWEE

94%

IPANEMA

61%

YOUCOM

82%

MELISSA

61%

75%

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3. TRACEABILITY FINDINGS WHO I S PUB LISHIN G A LIST OF TIER 1 SUP P LIER S?

43%

43%

35%

23%

8%

18%

23%

publish a list of tier 1 suppliers

include the address

include the approximate number of workers in each location

include the gender breakdown of workers

include the race breakdown of workers

include whether the facility has a trade union

publish at least 95% of their suppliers

WHO I S PUB LISHIN G A LIST OF P ROCESSING FACILITIE S ?

W H O IS P U B LIS H IN G A LIST OF RA W M A T E RIA LS SUPPLIE RS?

33%

33%

18%

8%

20%

18%

15%

publish list of processing facilities beyond the first tier

include the address

include the gender breakdown of workers

include the race breakdown of workers

publish list of raw material suppliers

have updated the list within the past 12 months

publish whether they are tracing one or more specific raw materials

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3. TRACEABILITY ANALYSIS As Jenny Holdcroft from IndustriALL Global Union1 explained in previous editions of the Fashion Transparency Index:

“Knowing the names of major buyers from factories gives workers and their unions a stronger leverage, crucial for a timely solution when resolving conflicts, whether it be refusal to recognise the union, or unlawful sackings for demanding their rights. It also provides the possibility to create a link from the worker back to the customer and possibly media to bring attention to their issues.�

Publishing lists of suppliers can also benefit the companies themselves. This kind of transparency helps brands to become more involved and collaborate with trade unions and civil society

Traceability: Progress of the overall average score year by year 2018

2019

2020

12%

of 20 brands

17%

of 30 brands

25%

os 40 brands

organizations related to labour and human rights issues. Publishing lists of suppliers can also facilitate direct dialogue between local organizations and companies with regard to problems involving workers' rights that a traditional audit cannot usually identify, such as unauthorized subcontracting.

Furthermore, when brands disclose their supplier lists, they show stakeholders that they are willing to be open and honest about where their products are made, generating increased investor and consumer confidence.

Disclosing first tier manufactures First tier suppliers are the production units responsible for cutting, sewing and finishing the products. This year, 43% of the brands (17 of the 40 analysed) are publishing lists of their tier 1 suppliers, including the address of the facilities and the type of product or service provided. In addition, 35% disclose the approximate number of workers in each location and 18% publish the percentage of migrant or temporary contract workers in the facility.

To align with Transparency Pledge2 and Open Apparel Registry3 requirements, we look for additional details in the brand supplier lists. We found that 18% include the name of the parent company of each facility, where applicable, and 35% publish their level 1 vendor list in searchable format as Excel or CSV documents. We ask for the disclosure of the lists through searchable formats to facilitate access to the data as well as its search, handling and use by trade unions and NGOs.

Only 12 brands (30%) inform which percentage of first tier suppliers are included in this list, and 9 brands (23%) inform that 95% or more of their suppliers are disclosed. Finally, 40% of the brands disclosure that the suppliers list was published or updated in the last six months.

5 brands that have been included since the first edition of the Fashion Transparency Index Brazil, disclosed their first tier suppliers for the first time this year, including: Animale, Farm, John John, Le Lis Blanc and Melissa.

Disclosing processing facilities Processing facilities are responsible for several parts of the production process, such as ginning and spinning, wet processes, embroidery, weaving, printing, finishing, tanneries, dyeing and laundering.

We found that 33% of the brands are disclosing their lists of suppliers of processing facilities, including the address of these facilities and the type of product or service provided.

1. Organization that represents 50 million workers in 140 countries in the mining, energy and manufacturing sectors and is a force in global solidarity taking up the fight for better working conditions and trade union rights around the world. To find out more, acess: http://www.industriall-union.org - 2. Coalition of nine labor and human rights organizations formed to advocate for transparency in apparel supply chains. To find out more, acess: https://transparencypledge.org - 3. Source for identifying apparel factories and their affiliations by collating disparate factory lists into one central, open-source map, listing factory names, addresses and affiliations. To find out more, acess: https://openapparel.org

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3. TRACEABILITY ANALYSIS Of the brands analysed, 25% disclose the approximate number of workers in each facility and 18% publish the percentage of migrant workers or with temporary contracts. In addition, 13% include the name of the parent company of each facility, where applicable, and 30% publish their list of first tier suppliers in searchable format.

Only 28% report what percentage of processing facilities are included in this list, and 8 brands (20%) report that 95% or more of their suppliers are disclosed.

Finally, 30% of the brands disclose that the list of suppliers was published or updated in the last six months.

This year, we have included a new indicator to see if brands disclose which manufacturer(s) each processing facility works with. We discovered that only 10% of the companies analysed have this practice. This data is important because it indicates the relationship between different tiers of the supply chain and allows suppliers, trade unions and workers' rights organizations to make the best joint decisions to solve possible problems.

4. Find out more in the Viewpoint text on page 44

Publishing raw material suppliers These facilities are those that supply brands and their manufacturers with raw materials such as fibers, leather, rubber, dyes, metals, suppliers of chemical products, among others. We note that only 20% of brands are publishing some of their raw material suppliers, including the address of their facilities and the type of product they supply. Among the suppliers disclosed, we identify suppliers of chemicals, viscose, resins and filaments.

Only 13% of the brands disclose the approximate number of workers in each facility listed and 18% disclose the list in a searchable format such as Excel or CSV and that has been published or updated in the last twelve months.

Very little information is disclosed about raw material suppliers We observe that brands publish more information about their first tier suppliers and as we analyse further down the supply chain, the information is getting scarcer. The lists of raw material suppliers

are the least disclosed and have far less detailed information in comparison to first tier and processing facilities.

Next year, we expect to see more brands publishing their supplier lists, for all tiers of the supply chain. We know that the exploitation of workers and the bad working conditions tend to occur in hidden places, which is why the focus on the transparency of suppliers beyond the first tier is very important.

Gender and race breakdown of workers in the supply chain4 We looked for the distribution by gender and race (race being specific to the Brazilian questionnaire) in each of the supplier's facilities, from the first tier to the raw material suppliers. The disclosure of lists of suppliers with this information is essential to create a more precise diagnosis and then act to combat inequalities and injustices related to gender and race along the whole supply chain, and preventing risks of human rights violations such as harassment, violence and discrimination.

Only 9 brands (23%) advertise gender breakdown among their first tier suppliers.

Although this number is still low, we can observe an impressive increase of 13 percentage points in relation to the 2019 results, when only 3 brands (10% in that edition) disclosed this information.

In relation to race, only 3 brands (8%), Havaianas, Malwee and Osklen, disclosed the distribution of employees by race for their first tier suppliers.

As we looked for detailed information on the most distant levels of suppliers, such as processing facilities and raw material supply, we observed that the publication of gender and race breakdown in supplier facilities reduces even more. Only 18% of brands disclose the distribution of gender in their processing facilities and only 8% disclose the racial distribution among workers in these facilities. Only two brands, Havaianas and Malwee, discloses both the gender and race breakdown in their raw material supplier facilities.

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3. TRACEABILITY ANALYSIS Trade unions and independent worker committees We can observe that only 18% of the analysed brands and retailers publish whether their first tier suppliers have an independent worker union or committee.

When we analyse these data for suppliers beyond the first tier, we observe a drop to 13% of brands which publish if their processing facilities have a trade union or worker committee.

Even so, despite being a theme little published by the brands, if compared to the Global Index, we note that this number falls to 4% of the companies analysed in relation to their first tier suppliers and to 1% in relation to their processing facilities.

Good progress, but most brands still don't disclose their supplier lists Although we observe progress in brands disclosing information about their supply chains, most companies still do not disclose any information about who their suppliers are. Of the 40 brands analysed, 21 (53%) have scored zero in this section.

The brands that scored highest were Havaianas (95%), Malwee (94%), C&A (82%), Renner (82%) and Youcom (82%).

" Secrecy is the linchpin of abuse of power... its enabling force.

Transparency is the only real antidote"

Glen Greenwald

Attorney and journalist

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CASE STUDIES: Transparency in action

[LEFT] Garment Worker in Lesotho ©ALAFA

[RIGHT] 2019, Bangladeshi garment workers shout slogans during a protest in Savar, on the outskirts of Dhaka, Bangladesh, © 2019 AP

Worker Rights Consortium LESOTHO In 2019, at three factories in Lesotho, all owned by the same supplier, Worker Rights Consortium (WRC) found that female garment workers were regularly being coerced into sexual activity with supervisors as a condition of gaining or retaining employment or promotions.

Nearly two-thirds of the garment workers WRC interviewed reported having experienced sexual harassment and abuse or having knowledge of harassment or abuse suffered by co-workers. WRC discovered that VF Corporation and Levi Strauss & Co. were both sourcing from these factories due to the fact that they publish supplier

lists on their websites. WRC facilitated discussions between local unions, NGOs and the two companies, which resulted in a ground-breaking legally-binding agreement to solve this serious problem.

As part of the agreement, an independent investigative organisation has been established to receive complaints from workers, carry out investigations and assessments, identify violations of a jointly developed code of conduct, and direct and enforce remedies in accordance with local law.

International Labor Rights Forum BANGLADESH In December 2018, the Government of Bangladesh increased the minimum monthly wage for garment workers to 8,000 Tk ($95 USD). The new minimum wage was half the amount that the workers’ rights organisations and trade unions had demanded. Workers said the minimum wage was not enough to cover increased living costs, so they took to the streets for largely peaceful strikes. Over the following two months, 65 workers were arrested while hundreds more faced unsubstantiated charges at the behest of factory owners.

Around 11,600 workers were unlawfully dismissed, most of who were unable to find other jobs due to systematic blacklisting. Through publicly disclosed supplier lists, the International Labor Rights Forum identified which major apparel brands were linked to factories that filed unsubstantiated cases against workers. As a result of their campaign efforts, the charges filed by 14 factories were dropped.

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[LEFT ]2019, Bangladeshi garment workers fill out their worker diaries as part of the Garment Worker Diary project, ©Microfinance Opportunities

[RIGHT] Garment Workers in Malaysian factory, ©giz.de

Garment Worker Diaries, Microfinance Opportunities BANGLADESH According to cutting-edge research from our partner project the Garment Worker Diaries (2019), Bangladeshi workers in factories that are part of brands’ public supplier lists earn more money per month than workers in factories that are not disclosed publicly by brands. These workers earn Tk. 5 per hour more and this translates into Tk. 1,040 in extra pay per month for 208 hours of work compared to workers in undisclosed factories – this is equivalent to about one third of their typical cost of monthly rent.

Transparentem MALAYSIA In Malaysia, Transparentem’s multi-year investigation identified endemic labour rights abuses of migrant workers in five factories. In those factories, migrant workers were deceptively recruited, paid exorbitant recruitment fees, and had their passports confiscated, thereby restricting their freedom of movement. Transparentem connected these factories to 23 global brands and retailers using publicly available supply chain data and other sources of evidence. Within two years,

Transparentem’s investigation and collaborative brand engagement model led to the return of 1,600 worker passports and commitments to pay back USD $1.75 million in worker-borne recruitment fees. In October 2018, a new industry protocol called the American Apparel and Footwear Association (AAFA)/Fair Labor Association (FLA) Apparel & Footwear Industry Commitment to Responsible Recruitment was established. To date, this protocol has been signed by 139 brands, potentially helping to shield 1.5-2 million workers from slavery.

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4. KNOW, SHOW & FIX APPROACH What do brands and retailers communicate about their environmental and human rights due diligence1 processes? How are they assessing suppliers' adherence to their standards?

We award points if the brands disclose: • How they identify and address environmental and human rights risks, impacts, and violations in their supply chains (their approach to conducting due diligence) • How workers/producers/ farmers, trade unions and other affected stakeholders are involved in the due diligence process • How suppliers are assessed against the brand’s policies • The process for taking on new suppliers • How frequently assessment are conducted (e.g. annually) • If brands conduct supplier assessments beyond the first tier • If supplier assessments include off site worker interviews and, if they do, how many workers are interviewed

1. Find out more in the Human rights and environmental due diligence subsection

KNOW

SHOW

This year, we introduced new indicators focusing specifically on environmental and human rights due diligence to understand how brands identify environmental and human rights risks, impacts and violations in their supply chains more broadly, going beyond the identification and management of material risks for the company itself.

We looked at whether brands are disclosing the results of their supplier assessments, either through summaries of the issues found, or at a more detailed level, disclosing findings by individual factories.

We also look for information on how brands assess suppliers to ensure that they are meeting their ethical policies and standards (usually through factory audits) and what third-party auditing standards are used.

FIX Finally, we looked at what brands publish in relation to the remediation of problems found in their supply chains through evaluation processes. In addition, we looked to see if brands publish a confidential grievance mechanism for both direct employees and workers in the supply chain. We also looked to see if brands disclose the results of their efforts to remediate violations and address grievances, generally known as Corrective Action Plans.

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4. KNOW, SHOW & FIX RESULTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

CENTAURO

6%

DAFITI

17%

RENNER

29%

MALWEE

46%

NETSHOES

5%

IPANEMA

17%

YOUCOM

29%

HAVAIANAS

46%

DUMOND

3%

MELISSA

17%

MARISA

25%

HERING

41%

TORRA

3%

ANIMALE

16%

PERNAMBUCANAS

24%

OSKLEN

41%

BROOKSFIELD

0%

FARM

16%

DECATHLON

22%

ZARA

41%

CARMEN STEFFENS

0%

AREZZO

14%

CIA. MARÍTIMA

0%

JOHN JOHN

14%

COLCCI

0%

LE LIS BLANC

14%

COLOMBO

0%

RIACHUELO

14%

DI SANTINNI

0%

ELLUS

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

LOJAS POMPÉIA

0%

LUPO

0%

MOLECA

0%

OLYMPIKUS

0%

PUKET

0%

TNG

0%

C&A

61 - 70% 59%

* As marcas são classificadas em ordem numérica dentro de uma pontuação máxima de 63 pontos e apresentadas aqui em forma de porcentagem arredondada. Quando as marcas têm a mesma pontuação percentual, elas são listadas em ordem alfabética.

71 - 80%

81 - 90%

91 - 100%

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4. KNOW, SHOW & FIX FINDINGS KNOW: DUE DILIGENCE PROCESSES

KNOW: SUPPLIER ASSESSMENTS

15%

5%

5%

50%

45%

30%

disclose the approach to environmental and human rights due diligence

disclose how affected stakeholders are involved in due diligence

disclose the environmental and human rights risks and how they are prioritised (low, medium, high)

disclose process for assessing conditions in supplier facilities

disclose the third party audit standard(s) used

report conducting supplier assessments beyond the first tier

SHOW: PUBLISHING AUDIT RESULTS

FIX: REMEDIATING ISSUES

25%

10%

8%

40%

50%

10%

publish aggregated first tier supplier audit findings

publish facility level rating by named first tier supplier facility

publish full audit reports by named first tier supplier facility

publish the process of supplier remediation

publish a confidential grievance mechanism for supply chain worker

publish data on the number of grievances submitted, addressed and resolved in the supply chain

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4. KNOW, SHOW & FIX ANALYSIS KNOW Human rights and environmental due diligence Due diligence is the process by which companies identify, prevent, mitigate and remedy their actual and potential adverse impacts. Due diligence can be included in broader corporate risk management systems, as long as it goes beyond the simple identification and management of material risks for the company itself and includes problems that occur in its supply chain, focusing on identifying the most impacting risks for workers, farmers and other stakeholders.

According to the OECD2 (Organization for Economic Co-operation and Development) guidance on due diligence for responsible supply chains in the garment and footwear sector, a company's measures to conduct due diligence should be proportional to the probability and severity of the damage.

For example, if a company is buying from a country with weaker labour laws, the measures the company will need to take

to prevent child labour, forced labour and other impacts related to working conditions will be more extensive than the measures of a company that operates with suppliers from countries with stronger laws.

the risks, impacts and environmental and human rights violations that have been identified, what their priorities are (low, medium, high) and the results of the measures taken to cease, prevent, mitigate and remedy such issues.

It is important to stress that due diligence should be a continuous exercise of brands, recognizing that the risks of damage may change over time as the company's operations and operational context evolve.

Supplier assessments

However, only 15% of brands are reporting how they proactively identify environmental and human rights risks, impacts and violations in their supply chains, i.e. their approaches to due diligence. Instead of carrying out extensive due diligence work, most of the brands analysed still rely solely on compliance auditing processes to monitor their supply chains.

In addition, only 2 brands, C&A and Zara, inform how representatives of workers, producers, farmers, unions and other affected stakeholders are involved in their due diligence processes. We also note that only these two brands disclose

We observed that 50% of the companies (20 brands) disclose the description of the process of evaluation of the suppliers' facilities, usually performed through audits. There is a very small improvement in this result in comparison to 2019 (47%).

In comparison to the 2020 Global Index, in which 92% of brands publish this information, we note that the Brazilian average is considerably low.

This year, we have included a new indicator to look at which external auditing or third parties companies use such as Abvtex, BSCI, Higg Index, SAI/ SAAS, SMETA, WRAP, among others. We have observed that 45% of the analysed brands disclose this data, which allows us to understand in more detail which criteria are used to measure suppliers conformity in relation to social and environmental standards.

In addition, 48% of companies disclose their criteria to take on new facilities before production begins, ensuring that they meet the required standards. This usually occurs through some form of self-assessment applied to suppliers or supplier approval processes that include pre-production audit requirements.

These results show an increase of 11 percentage points between 2019 and 2020. We also identified that 50% of the companies disclose the frequency of supplier evaluations, which generally occur at least once a year, depending on the level of risks identified.

We identified that 33% of brands disclose the percentage of supplier evaluations that are conducted in an announced, partially announced or unannounced manner. Supplier Ethical Data Exchange3 (Sedex), an organization created to promote convergence in social auditing standards and monitoring practices in global supply chains, suggests that best practice is to use a combination of announced, partially announced and unannounced audits to mitigate the risk of suppliers specifically preparing for the audit, covering up human rights, safety and environmental violations.

2. https://www.oecd-ilibrary.org/docserver/9789264290587-en.pdf?expires=1602697369&id=id&accname=guest&checksum=32DF42B0B0EE3A6949252FA735A65DE2 3. https://cdn.sedex.com/wp-content/uploads/2017/04/Smeta-6.0-BPG.pdf

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Only 13% of the brands disclose that their audit process includes interviews with workers outside the factory premises and only 3 brands (8%) - Havaianas, Hering and Osklen - discloses the number or percentage of these interviewed workers conducted offsite. In this sense, it is important to remember that talking directly with workers outside their workplace is a crucial practice to understand the real working conditions.

In this way, employees have the opportunity to speak freely, without fear of reprisals from superiors who may be listening to their interviews or come to know what was reported.

Finally, 30% disclose whether the scope of evaluations of supplier facilities goes beyond the first tier, such as subcontractors, processing and processing facilities, suppliers of fabrics and raw materials. This disclosure indicates that the brands are working to ensure that their policies, ethical and environmental standards are applied throughout the supply chain and not only at the facilities with which they have a more direct relationship.

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" If you don't face the inequalities, you reproduce and strengthen them."

Viviana Santiago

Professor, Columnist and Consultant

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T R A N S PA R E N C Y SHOW Disclosing the results of supplier assessments A quarter of the brands share the summary of the findings of the supplier's facilities evaluations at the first tier and beyond tier 1, while only 2 brands (5%) disclose this information about their raw material suppliers. There hasn't been any major developments for this indicator since the 2018 Index, when 20% of brands disclosed these findings at tier 1, 15% for beyond tier 1 and 5% at the raw material level.

Many brands and retailers operate with a classification system (e.g. Gold, Silver, Bronze or A, B, C) to assess the social and environmental compliance of their suppliers. However, only 4 brands (10%) disclose these classifications for tier 1 suppliers and beyond tier 1, identifying the specific facilities. For raw material level suppliers, only 1 brand disclosed its facility level ratings.

This year, in relation to complete audit reports identifying specific facilities, 3 brands - Ipanema, Malwee and Melissa - released their results for the first time. In the Global Index none of the 250 brands analysed have made this disclosure.

We look for the disclosure of the full audit results because there is evidence that this can generate positive changes for the workers on the supply chains. For example, Better Factories Cambodia (BFC)4 has launched an online transparency database, presenting the assessments of the working conditions of its clothing factories. One third of the 51 factories, included in the "Critical Problems" database have made improvements to 21 basic legal requirements due to the anticipation of public disclosure of this data. The total number of "Critical Problems" violations in this group of factories fell from 59 to 34 between December 2013 and February 2014 - an improvement of 42%.

We identified that only 3 brands (8%) disclose selected audit results for supplier tier 1 facility, 1 brand publishes this information beyond tier 1 and no brand publishes this data at the raw material level.

4. https://www.ilo.org/global/about-the-ilo/%20newsroom/news/WCMS_237913/lang--ja/index.htm

FA I R T R A D E W E L L- B E I N G L I V I N G WAG E S EMPOWERMENT GENDER EQUALITY BUSINESS ACCOUNTABILITY S U S TA I N A B L E L I V E L I H O O D S GOOD WORKING CONDITIONS E N V I R O N M E N TA L S U S TA I N A B I L I T Y

A FAIR, SAFE, CLEAN FASHION INDUSTRY

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FIX Supplier remediation plans We found that 40% of brands disclose their remediation processes when non-conformities are found in a facility, such as excessively long working hours, lack of formal employment contracts, absence of emergency exits or fire extinguishers, etc. Normally, companies perform these remediation processes through corrective action plans, in which the plants have a determined period of time to solve the detected problems.

Only 3 brands (8%) disclose explanations on how workers' representatives, unions and other affected stakeholders are involved in developing and implementing these remediation plans.

Remediation plans tend to be most effective when affected stakeholders are involved, ensuring that remediation efforts achieve the intended results for workers.

When we look for brands that disclose the percentage or number of facilities with remediation plans and their

respective status, we find that 9 brands (23%) disclose this data for tier 1 facilities and 7 brands (18%) for facilities beyond tier 1. No brand discloses such information to raw material suppliers.

Of the 40 brands analysed, only 5 disclose their exit strategies to terminate a relationship with facilities that remain non-compliant. A responsible exit strategy is important to manage possible impacts and adverse risks to workers, such as the sudden loss of their jobs, without any compensation and nonpayment of late wages.

Dealing with employee and worker grievances With regard to the grievance mechanism channels that allow problems to be identified and remedied, 53% of the brands disclose a description of the channel (e.g. online form, e-mail, exclusive phone number for complaints) to their direct employees and 50% for supply chain workers.

59

Only 4 brands (10%) disclose data on the number of complaints or reports of violations submitted by their direct employees and supply chain workers, and whether they are under review or have already been resolved.

While half of the brands describe the reporting mechanism in place for supply chain workers, only 20% disclose how these workers are informed about the existence of the reporting and complaint channels, whether through posting on facility bulletin boards, training or other practices. It is essential that workers are aware of the existence and functioning of these mechanisms to ensure that their complaints are heard and remedied without fear of dismissal or other types of punishment.

Companies still disclose little about their due diligence processes, supplier assessment and its results The overall average score for this section was 14%, representing a slight increase of 4 percentage points over 2019 (10%).

Not even the highest scoring brands in

this section - C&A (59%), Malwee (48%) and Havaianas (46%) - achieved 60% of possible points. Moreover, of the 40 brands analyzed, 29 (73%) scored less than 20% in this section, with 16 of them scoring zero. This demonstrates that there is a need for greater industry efforts in relation to disclosure of what is being done to improve working conditions and worker safety along the supply chain.

40% of brands disclose the process for remediation when non-compliances are found in a facility

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VIEWPOINT:

THE MANAGEMENT OF HUMAN RIGHTS IMPACTS AND DUE DILIGENCE FLÁVIA SCABIN, TAMARA BREZIGHELLO HOJAIJ E VICTORIANA LEONORA GONZAGA CENTER FOR HUMAN RIGHTS AND COMPANIES OF FUNDAÇÃO GETULIO VARGAS

A survey conducted by the British Institute of International and Comparative Law in partnership with Norton Rose Fulbright LLP which surveyed 152 representatives from companies of different sizes and countries showed that about 49% never performed due diligence on human rights. Data from the 2019 Corporate Human1 Rights Benchmark (CHRB), an index that evaluates corporate performance in relation to human rights, obtained similar results, with 49% of 200 companies scoring zero on related indicators.

Provided for in the UN's Guiding Principles on Business and Human Rights, due diligence on human rights (HRDD) is a tool to identify, prevent, mitigate and account for business risks and impacts on human rights, and is a key instrument for companies to implement their obligation to respect them.

This obligation, according to the Principles, means that companies should (i) refrain from abusing human rights directly related to their activities and operations and (ii) address adverse impacts on these rights with which they have some involvement, for example through their business relationships.

It is to say that, independently of the duty of the States to protect human rights, they must be observed in the processes and business practices, in the own working environment, in the surroundings of the company operations and in its value chain.

This obligation is owed by companies in relation to the International Charter of Human Rights, which includes the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights, and the Fundamental Conventions of the International Labor Organization.

Human Rights Law is a tool that must be continually improved. This is because it needs to follow the evolution of the

company's activities and operations; as well as to respond to the dynamic context of these rights in the territories in which it operates so that the impacts of the business in this sphere are effectively addressed.

However, there is no single formula for HRDD. On the contrary, it can vary according to the size, capacity and operational context of the companies; which is a challenge. In order to contribute to overcome it, some states have sought to consolidate guidelines on HRDD in their legislation, creating corresponding legal obligations. Examples are France, the Netherlands and, at a regional level, the European Union, whose Parliament is debating a bill on the subject.

In this movement, the prevention of impacts on workers' rights in value chains has been central. These are increasingly complex and fragmented networks, organized at different levels and geographically dispersed, in which not only economic advantages and risks are diluted, but also responsibility for workers' rights. In 2013, the collapse

of the Rana Plaza building showed that this is evident in the fashion industry: more than 1,100 workers, who were on site, died and big brand labels were found in the rubble.

In order to effectively address human rights impacts within value chains, it is necessary to adopt a systemic approach, capable of deepening knowledge about commercial and labor relations and the socioeconomic and regulatory context in which they are a part. Furthermore, it is necessary to adopt a human rights approach, assuming that companies, regardless of their size, have a responsibility in relation to these rights, which can be made effective precisely through HRDD. The FGV's Center for Human Rights and Companies conducts a project that advances in this topic, with the development of collaborative solutions aimed at promoting better working conditions in the value chains of the national fashion industry. Preliminary results will be released soon.

1. MCCORQUODALE, R. et al. Human Rights Due Diligence in Law and Practice: Good Practices and Challenges for Business Enterprises. Business and Human Rights Journal, v. 2, n. 2, p. 195–224, jul. 2017.

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5. SPOTLIGHT ISSUES APPROACH Each year the Fashion Transparency Index addresses and explores in greater depth a number of issues considered important to the fashion industry. In 2020, the Brazilian report, as well as the global report, highlights four strategic areas that we call the 4 C's: conditions, consumption, composition and climate.

The indicators have been selected and formulated through consultations with industry experts and are aligned with the Sustainable Development Goals (SDGs) of the UN Agenda 2030, which aims to bring nations together to build a better world for people and our planet by 2030.

CONDITIONS

CONSUMPTION

COMPOSITION

CLIMATE

What are brands and retailers doing to improve the conditions of their own employees and their supply chain workers? We look specifically at:

What are companies doing to deal with overproduction, minimise waste and move towards circularity? We are specifically looking for:

What are brands doing to increase the use of sustainable materials and decrease the use of virgin plastics and hazardous chemicals? Here we look at:

•

•

Quantity of products produced during the annual reporting period

•

Strategies and progress for switching to more sustainable materials

Are major brands and retailers taking urgent action to combat the climate crisis and move towards sustainable management of natural resources? Here we are looking for:

•

Amount of textile waste generated and how much was destroyed or recycled

•

Strategies and progress to reduce the use of virgin plastics

•

What the company is doing to minimize the impact of microfibres

•

Strategies and progress to eliminate the use of hazardous chemicals

• •

Combating forced or bonded labor and recruitment practices in supply chains Living wages and wage data in the supply chain Purchasing practices and what brands are doing to be good business partners for their suppliers

•

•

Unionisation and collective bargaining

•

•

Gender equality and equal pay within the company and at suppliers' facilities

•

Racial equality and nondiscrimination between nationalities

Strategy and progress to reduce pre-consumption waste and postconsumption waste recycling Investments in circular solutions that allow textile-to-textile recycling

•

Science based targets

•

Commitment to zero deforestation

•

Carbon footprint within the company and in the supply chain

•

Amount of renewable energy used within own operations and in the supply chain

•

Water footprint of the company itself and in the supply chain

•

Report that links the environmental impacts to the business bottom line

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5. SPOTLIGHT ISSUES RESULTS 0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

DAFITI

10%

OSKLEN

20%

DECATHLON

31%

MALWEE

39%

FARM

10%

HAVAIANAS

8%

IPANEMA

18%

HERING

24%

RENNER

39%

LUPO

8%

PERNAMBUCANAS

14%

MELISSA

22%

YOUCOM

39%

ANIMALE

6%

AREZZO

12%

MARISA

6%

RIACHUELO

6%

PUKET

4%

JOHN JOHN

2%

LE LIS BLANC

2%

BROOKSFIELD

0%

CARMEN STEFFENS

0%

CENTAURO

0%

CIA. MARÍTIMA

0%

COLCCI

0%

COLOMBO

0%

DI SANTINNI

0%

DUMOND

0%

ELLUS

0%

FÓRUM

0%

LEADER

0%

LOJAS AVENIDA

0%

LOJAS POMPÉIA

0%

MOLECA

0%

NETSHOES

0%

OLYMPIKUS

0%

TNG

0%

TORRA

0%

ZARA

51 - 60% 45%

C&A

* Brands are ranked in numerical order within a maximum score of 49 points and presented here as a rounded percentage. When the brands have the same percentage score, they are listed in alphabetical order.

61 - 70% 59%

71 - 80%

81 - 90%

91 - 100%

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5. SPOTLIGHT ISSUES FINDINGS LIVING WAGES

PURCHASING PRACTICES

FORCED AND BONDED LABOUR

10%

3%

13%

8%

13%

15%

disclose approach to achieving living wages for supply chain workers

only 1 brand discloses annual progress towards paying living wages

disclose their supplier payment policy, with maximum terms stipulated

publish the percentage of payments to suppliers made on time and according to agreed terms

disclose approach on recruitment fees in the supply chain

publish data on the existence of violations related to forced and bonded labor in supplier facilities

GENDER EQUALITY

RACE EQUALITY

15%

35%

3%

0%

10%

18%

publish the company’s gender pay gap

publish the gender distribution within the company considering different hierarchical levels

only 1 brand publishes data on gender-based violations in suppliers' facilities

no brand publishes the company’s race pay gap

publish the distribution by race or ethnicity within the company considering different hierarchical levels

publish actions focused on promoting racial equality among their employees

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5. SPOTLIGHT ISSUES FINDINGS WASTE & RECYCLING

PLASTICS

SUSTAINABLE MATERIALS

10%

15%

8%

15%

18%

15%

disclose the amount of textile waste generated during the annual reporting period

disclose how they invest in circular solutions, which allow the recycling of parts and that go beyond reuse and “downcycling”

disclose what they are doing to minimize the impact of microfibres

publish measurable progress towards reducing the use of virgin plastics

publish a time-bound, measurable sustainable materials strategy

publish their annual progress in achieving sustainable materials targets

HAZARDOUS CHEMICALS

CARBON EMISSIONS

WATER USE

10%

13%

25%

5%

23%

3%

disclose a time-bound commitment to eliminate hazardous chemicals

report measurable progress towards eliminating the use of hazardous chemicals

publish annual carbon footprint or greenhouse gas (GHG) emissions for their own operations

publish annual carbon footprint or GHG emissions in their supply chain

publish annual water footprint for their own operations

only one brand publishes its annual water footprint at raw material level

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5. SPOTLIGHT ISSUES ANALYSIS CONDITIONS Forced and bonded labour This topic brings new indicators to the 2020 spotlight section.

Here we are analysing in more depth the steps that brands are taking to deal with the risks of forced and bonded labour, particularly in relation to recruitment practices in the supply chain.

We note that only 6 brands (15%) publish data on the existence of forced and bonded labour violations at their supplier sites, which may include restricted freedom of movement, withholding passports or other workers’ documents, forced and excessive overtime, wage retention, debt bondage and, as noted above, complaints related to recruitment practices.

As the Institute for Human Rights and Business (IHRB) explains, “migrant workers are an ever-present feature

of global supply chains, found in all sectors and all geographies. Low-income migrant workers are amongst the most vulnerable to exploitation and abuse, and are often the least able to assert their rights. For many, a lack of viable options to sustain a livelihood at home increases their willingness to accept poor working conditions abroad .” We base the methodology of this subsection on the work of the IHRB, which focuses largely on how workers are recruited, and mainly on paying recruitment fees to secure employment.

1

To really understand whether workers are paying recruitment fees or any related costs they need to be interviewed, but only 5 companies (13%) disclose whether interviews are conducted with workers about their recruitment journey. Normally, to avoid this, companies define a policy to ensure that nothing is paid by workers as part of their recruitment process or that, in case of expenses, they are reimbursed.

We found that 13% of brands disclose their approach to the use of recruitment fees in the supply chain.

In addition, although 33% of brands have a policy to cover foreign and migrant labor, only 23% disclose how they are putting this policy into practice. We also found out that only 15% of companies publish their actions related to the regularization of foreign migrant workers in their supply chain.

In relation to a measurable strategy and with a determined term for the payment of the fair living wage the results are even more discouraging, as no brand included in the Brazilian Index provides this information, compared to 5 brands (2%) of the global Index.

Living wages

According to a 2019 report from Labour Behind the Label , there is a difference of 2 to 5 times, between the minimum wages or industry standard and the living wages.

In India, for example, the minimum wage is half of what unions ask and only onethird of what Asia Floor Wage determines as a living wage, a global social and labor alliance involving garment producing countries (such as Bangladesh, Cambodia, India, Indonesia, Pakistan and Sri Lanka) and consumer regions (USA and Europe) to address issues such as wages, gender and freedom of association in global garment production networks.

6

There is still a lot to be done regarding the payment of a living wage to workers of the fashion supply chain. While only 10% of the Brazilian Index brands (C&A, Renner, Youcom and Zara) disclose a commitment to ensure this salary, the global Index pointed to a result of 23% for the same indicator. The brands that disclose this information usually do so because of their participation in initiatives focused on fair living wages, such as ACT , Wage Ladder of the Fair Wear Foundation , Fairtrade Textile Standard and Fair Compensation Strategy of the Fair Labour Association . In Brazil, we are not aware of similar organizations or initiatives, unfortunately.

2

3

4

5

7

Finally, no brand publishes information on the percentage above the living wage that workers in its supply chain receive, compared to 5 brands (2%) of the global analysis.

1. https://www.ihrb.org/focus-areas/migrant-workers/ - 2. https://actonlivingwages.com/ - 3. https://www.fairwear.org/resources-and-tools/wage-ladder - 4. https://www.fairtrade.net/standard/textile 5. https://www.fairlabor.org/report/2020-fair-compensation-strategy - 6. http://labourbehindthelabel.net/wp-content/uploads/2019/06/TailoredWagesUK-FP.pdf - 7. https://asia.floorwage.org/

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5. SPOTLIGHT ISSUES ANALYSIS LIVING WAGE A salary capable of covering the basic costs of living or 'living wage' is one that allows a decent standard of living for the worker and his family. It is typically higher than the minimum wage and provides conditions for obtaining all the resources necessary to live, such as food, housing, education, health, transportation, clothing and other essential needs, as well as provision for unexpected events. The estimate of a fair living wage varies by region, and guidance on this is offered by government and international agencies, academic organizations and/or NGOs.

Purchasing practices Responsible purchasing practices go hand in hand with suppliers’ ability to pay workers adequate and decent wages.

Even so, in general, the companies divulge very little about what they are doing to be good business partners for their suppliers, as we presented in the Executive Summary.

8. https://betterbuying.org/

Although there has been a slight difference since 2019, when no brand divulged a method for calculating and ring-fencing labour costs when negotiating the price they pay suppliers for the products they make, only 2 brands (5%), C&A and Zara, disclose this information in 2020. We note that this issue is still quite hidden by the vast majority of brands. We have also found out that no company divulges the percentage of the order volume in which the wages and other labor costs were isolated.

Ideally, these labor costs should cover both salary and overtime, social security, medical leave and other forms of leave, vacation, indirect labor costs and planned or potential salary increases. This calculation ensures that labor costs are non-negotiable and allows suppliers to pay fair wages to their workers.

When payments to suppliers are delayed, there may be a direct impact on their cash flows, affecting their ability to pay workers on time. This has become very clear since the beginning of the coronavirus pandemic, when major brands cancelled their orders and left millions of workers even more vulnerable around the world.

These workers, who produce clothing for some of the most profitable companies in the world, have been fired or temporarily suspended without receiving the payment to which they are entitled by law. For the vast majority who lack savings or social protection, poverty and hunger can pose an even greater threat to their lives than the virus itself.

Finally, we identified that only 1 brand (3%) publishes feedback from suppliers about their purchasing practices through a formal process, compared to 13 brands (5%) in the global Index. This feedback is usually collected through internal surveys, events organized by the brands in their supply regions or participation in initiatives such as Better Buying , a system for suppliers to communicate to their buyers the buying practices that are working well and those that need improvements, without risking their business relationship.

This information is useful because it indicates if the brands are willing to listen and make changes to be better business partners for the suppliers. We would like to see initiatives like this being implemented in Brazil as well.

8

At the moment, brand buying practices are being questioned as they seek to deal with the economic crisis caused by the pandemic. It is vital that companies share more information about how they do business with their suppliers so that they can be held accountable and fulfill their commitments to prevent workers and their families from going hungry.

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5. SPOTLIGHT ISSUES ANALYSIS Unionisation and collective bargaining Freedom of association, including the right to form and join trade unions and to collectively bargain, are fundamental labor rights enshrined in several international agreements and national laws, including in Brazil. These are considered enabling rights because when workers can come together to talk and negotiate with their employers for better working conditions, they can address the issues that most concern them, such as wages, health and safety, maternityrelated rights, among others.

Therefore, it is shocking that only 4 brands (10%) disclose the number or percentage of supplier facilities that have democratically elected independent unions. In the global Index this number is even smaller: only 9 brands (4%) among 250 analyzed. Furthermore, only 5 companies (13 %) disclose the number or percentage of workers in the supply chain who are covered by collective bargaining agreements compared to 22 brands (9 percent) in the global Index.

Gender equality The global fashion industry employs millions of women, from cotton farms through factories to retail. In Brazil, it is estimated that 75% of the sector’s workforce is female . Therefore, each year we explore policies, procedures (see Section 1) and other data focused on gender disclosed by major brands and retailers.

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In Section 4, we address due diligence processes that involve human rights and environmental issues. Here, we seek to find out whether brands are disclosing how they include potentially affected women, women’s organizations, women human rights defenders and gender experts at all stages of their due diligence and, to our surprise, no company publishes such information. This result is also derisory in the global Index, counting only 3% of brands.

Although different surveys and reports indicate that female workers are subject to gender-related harassment and violence in the textile and clothing industry, only 1 brand (3%) publishes data on the prevalence of gender-related labor violations at supplier sites, compared to 2 brands (1%) in the global Index. These violations can be related to issues such as sexual harassment and other forms of gender-based violence; treatment and dismissal of pregnant workers; maternity leave; bathroom breaks; women in supervisory and management positions; salary disparity; participation of women in trade union organizations, etc.

Considering CARE International data, which indicates that 50% of the apparel industry workers in Southeast Asia have suffered sexual harassment in the workplace , recent reports of sexual violence in jeans factories in Lesotho, Africa, which produce for renowned brands . In Brazil, the reality is that women are the biggest victims of forced labor and are often exposed to gender-based violence in the fashion supply 10

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15% of brands publish the gender pay gap within their companies

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chain , we hope that soon brands will begin to publish more data on this important topic.

In addition, women who work in clothing manufacturing also tend to be employed in lower paid jobs, while men are usually supervisors and factory managers.

Although there is this inequality, only 1 brand publishes the distribution of gender by position, for example, assistants, seamstresses, supervisors and managers in their supply chain.

9. https://abit.org.br/cont/perfil-do-setor - 10. https://care.org/wp-content/uploads/2020/06/mbw_impact_report_2019_final.pdf - 11. https://www.theguardian.com/news/2020/aug/20/fashion-industry-jeanslesotho-garment-factory-workers-sexual-violence - 12. https://www.uol.com.br/universa/noticias/redacao/2020/08/29/moda-escrava-setor-textil-e-o-que-mais-recruta-mulheres-em-sao-paulo.htm and http:// escravonempensar.org.br/trabalho-escravo-e-genero-quem-sao-as-trabalhadoras-escravizadas-no-brasil/

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5. SPOTLIGHT ISSUES ANALYSIS On the other hand, the brands are a little more transparent regarding gender equality (or lack thereof) regarding the distribution of men and women by positions within the company’s own operations, totaling 35% of the companies.

But still well below the 52% of brands disclosing this data in the global Index.

people. In relation to people in informal occupations, 34.6% are white and 47.3% are black or mixed race. The report also indicates that “the differential treatment by race is greater than the differential treatment by gender. While women received 78.7% of men’s income, in 2018, black and mixed race people received only 57.5% of the income compared to white people .”

Although it represents a slight increase in relation to 2019, when only 3% of the companies published information about their actions to promote racial equality and 7% presented data on the breakdown of jobs by race of their employees, the results show an evident challenge to overcome racial inequalities in its various dimensions.

It is necessary that we shed light on this issue within the fashion industry. We found that only 18% of companies publish their actions focused on promoting racial equality among their employees, such as creating a culture that favors racial diversity, the inclusion of black and mixed race people in executive and management positions or the promotion of racial equality in the integration of new employees. Only 10% of the brands publish race breakdown by distribution of job roles (e.g. executive level, managers/ supervisors, employees) within their company and none publish the salary differences of their employees by race.

The desire to combat social inequalities in Brazil has supported studies and the creation of public policies focused on the diagnosis and execution of measures to reduce the severe disadvantages of black and mixed race people in relation to white people. It is necessary to put a stop to historical patterns of injustice and violence.

We expect better results next year.

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However, only 15% of brands publish the difference in wages between women and men inside the company, compared to 34% of the companies reviewed on the global Index. Public regulations can help in this area as, for instance, in the UK, companies are obliged by law to report this data publicly since 2018.

Racial equality Although black and mixed race people represent more than half of the Brazilian population (55%) , we know that racial prejudice continues to drive inequality.

According to IBGE data regarding the labor market, 68.6% of management positions are held by white people compared to 29.9% by black and mixed race 13

13. https://sidra.ibge.gov.br/tabela/6403#resultado - 14. https://biblioteca.ibge.gov.br/visualizacao/livros/liv101681_informativo.pdf

0% of brands publish the racial pay gap within their companies

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5. SPOTLIGHT ISSUES ANALYSIS

CONSUMPTION Global clothing consumption has more than doubled in less than two decades, from 74.3 billion items of clothing and 15 footwear in 2005 to 130.6 billion in 2019 .

This is equivalent to every person on 15 the planet buying 15 items of clothing and 2 pairs of shoes annually - although purchasing patterns vary considerably between countries. With this rate of growth in consumption, along with population growth and rising wealth in emerging economies, we can expect clothing and footwear production and consumption to triple by 2050 .

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In view of the climate crisis we are facing, we cannot continue manufacturing, buying and disposing of clothing at current rates. That is why we have highlighted issues related to overproduction, excessive consumption and waste in this subsection, looking for information such as the amount of products produced annually

by brands, data on their textile waste generated and their strategy to reduce waste and ensure the extension of the useful life of their products.

Annual production volume We observed that 7 brands (18%) publish the quantity of products (e.g. clothes, shoes, accessories) produced during the annual report period.

We also noted that only 4 brands (10%) disclose the percentage or volume of textile waste generated annually and that 5 brands (13%) disclose the amount of products that are sent to landfills or destroyed, usually through incineration or co processing.

It is important to emphasize that concentrating efforts to minimize the impacts on the product level without evaluating the increase in the amount of new clothes produced each year will continue to generate negative impacts on the environment in an unsustainable way.

Waste, repair and recycling According to a study by the Global Fashion Agenda, about a quarter of the textile and apparel industry’s resources are wasted as leftovers every year , which is why we look for how brands are publicly addressing this issue.

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We identified that 35% of companies disclose their strategies to reduce preconsumption surplus or waste, such as scraps and trimmings, unsold or defective stocks, production samples, etc. - an increase of 5 percentage points compared to 2019. These results are higher than those found in the global Index, where 27% of the brands analysed in 2020 disclosed their strategies. Despite this growth, only 6 brands (15%) reported measurable progress in reducing these surpluses and pre-consumption waste.

In relation to post-consumption waste management, we note that 20% of brands disclose if they make available permanent take-back schemes for

returning clothing for recycling in their stores - which represents an increase of 7 percentage points over 2019 but is below the 2020 global Index, where 30% of brands disclosed this information.

This year, for the first time a brand analysed in the Brazilian Index, Decathlon, said it offers a repair service for the brand’s customers in order to help extend the useful life of products. In the global Index, 16% of brands offer these services, most of them luxury brands, which enable the repair of footwear, bags or other high value items.

The objective of circular solutions is to ensure that the fibers and fabrics used in clothing can be reused repeatedly and for much longer, dramatically reducing the need to create new clothes from virgin resources. We note that only 15% of brands disclose how they invest in circular solutions beyond reuse or downcycling, such as through closedloop recycling processes (in this case,

15. EUROMONITOR INTERNATIONAL - Apparel and Footwear Industry, 2020 Edition - 2020 - 16. https://www.ellenmacarthurfoundation.org/ assets/downloads/publications/A-New- Textiles-Economy_Full-Report.pdf 17. https://www.globalfashionagenda.com/download/10961

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5. SPOTLIGHT ISSUES ANALYSIS the use of recycled materials is not enough to score). Only 8% (3 brands) disclose the percentage of products designed to enable closed loop or textile to textile recycling at end of life.

Considering that about 80% of all clothes produced in the world end up incinerated or in landfills and only 20% are reused or recycled , it is fundamental and urgent that major brands and retailers reveal more information on how they employ efforts to reduce the generation of waste and textile surpluses to move towards more circular systems.

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BELOW: Cast-off woolen clothing is sorted again in large warehouses in Panipat, Tim Mitchell

Due to the coronavirus pandemic, retail stores around the world have been forced to close their doors, which means that clothing has not been sold. With the reopening of stores, these products can be considered “out of fashion� and this raises important questions: what will happen to all these materials in perfect condition? Will they be sold, reused, donated to charities, will they go to landfills, will they be incinerated or recycled? The fashion industry already faces a major problem of overproduction and waste and there is still no technology to recycle textiles in a truly circular way and at scale. It is worrying that the consequences of the pandemic could make this problem even worse.

18. https://www.globalfashionagenda.com/download/10958

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5. SPOTLIGHT ISSUES ANALYSIS COMPOSITION

Plastics

Strategies for the use of sustainable materials

Every time we wash a garment made of synthetic material, mainly polyester, tiny particles of plastic - too small to be captured by conventional water treatment - enter our water system, ending up in rivers, lakes and oceans.

Some brands are increasing the use of more sustainable materials in their products, such as organic cotton, chrome-free tanned leather, recycled/ reused fabric, fabrics originated from sustainable management or fair trade.

However, the use of these materials often occurs only in capsule or seasonal collections of brands marketed as “sustainable” or “conscious”. We note that only 7 brands (18%) publish a strategy or targets for sustainable materials management in a measurable and time-bound manner - representing a 15 percentage point drop from 2019. Only 6 brands (15%) published their annual progress in achieving these targets.

It is estimated that up to 700,000 microfibers can be released from our clothes in a wash . Because of this, textiles are considered the largest source of primary micro plastic pollution and have been found in the deepest parts of the ocean . We expected the brands to address this alarming problem, but we found that only three brands (8%), Decathlon, Hering and Zara publish information on what they are doing to minimize the impact of microfibres.

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When it comes to reducing the use of plastics more generally, we found that only 8% of brands publish measurable and time-bound targets for reducing the use of virgin plastics (including plastic-based textiles, accessories, hangers, packaging) and that 15% publish measurable progress towards this reduction.

report their progress to achieve these goals. When brands are taking steps to eliminate the use of hazardous chemicals in their products, this usually happens through international standard programs such as ZDHC - Zero Discharge of Hazardous Chemicals, Roadmap to Zero.

Hazardous chemicals Some of the chemicals used in clothing, such as lead (paints), NPE (industrial washing), phthalates (printing), PFC compounds (water-repellent coating) and formaldehyde (anti-wrinkle treatment), are toxic and can cause serious health problems. Considering that the textile industry contributes significantly to water pollution worldwide due to the lack of proper disposal of chemicals, we find it surprising that only 4 brands (10%) publish a commitment with a set deadline for the elimination of the use of hazardous chemicals and that only 5 brands (13%)

19. https://www.sciencedirect. com/science/article/abs/pii/S0025326X16307639 - 20. https://portals.iucn.org/library/sites/library/files/ documents/2017-002-En.pdf

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5. SPOTLIGHT ISSUES ANALYSIS CLIMATE Carbon emissions There is still a long way to go in relation to mitigating the major impacts that the fashion industry has on the climate crisis.

Considering that climate change is accelerating and that we have about a decade to contain the most catastrophic impacts of global warming, one would expect fashion brands and retailers to be moving much faster towards zero carbon emissions.

Only 25% of companies publish their carbon footprints or greenhouse gas (GHG) emissions for their own operations annually and only 5% publish the carbon footprint or GHG emissions of their supply chain annually - where the largest proportion of the sector’s emissions occur . Figures far below those analysed in the global Index, which indicated 58% and 16% respectively for these indicators.

Limiting deforestation is also a crucial part of mitigating global carbon emissions. Considering the fires in the Amazon and the Cerrado, it is shocking that no brand publishes a measurable and time-bound commitment to zero deforestation. Even in the global Index the results are worrying, with only 4 brands out of 250 publishing this commitment.

Use of renewable energy When we look for data about the percentage of energy coming from renewable sources, we observe that 30% of the brands divulge this information in relation to their own operations and that no brand publishes this information for their supply chain. In the global Index these results were also low, respectively 33% and 6%.

Water use We observed that 9 brands (23%) publish annually the water footprint of their own operations such as administrative headquarters, retail stores, distribution centers, warehouses, etc. When we look for this data at manufacturing and processing facilities, we observe that only 2 brands (6%) publish this data and only 1 brand (3%) discloses its water footprint at the fibre production and/or raw material level. In the global Index these results are, respectively, 31%, 14% and 4%.

Considering that a global water crisis was ranked among the top 5 global risks , it is surprising to see little progress in the disclosure of water use data by companies, especially at the level of raw materials.

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21. https://quantis-intl.com/measuring-fashion-report-2018/ - 22. http://www3.weforum.org/docs/WEF_Global_Risk_Report_2020.pdf

No brand publishes its environmental impacts in its financial statements We note that no company publishes in its financial statements information that directly indicates its environmental impacts. Today there are some methodologies to calculate this type of information such as Environmental Profit & Loss (E&L). Methodologies such as these propose a monetary analysis of the environmental gains and losses of a company’s operations and its supply chain.

The global Index revealed that only 7 brands out of 250 (3%) map their environmental impacts directly in their financial statements.

The Brands that scored the highest in the Spotlight Issues section were: C&A (59%), Zara (45%), Malwee (39%), Renner (39%) and Youcom (39%).

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CASE STUDY: Transparency in action

Rethinking the bonds between artisans, designers and consumers is the challenge that the brand embraces, using transparency as one of the tools to talk about these challenges with their customers and community to reinvent more meaningful relationships.

In the first two years of the project, the brand grew from 7 to 35 artisans. Catarina Mina won two national awards and sales quintupled. All this was possible because they communicated publicly about their values and supply chain practices. This transparency made the customer identify with the brand’s values and became a part of its community.

Catarina Mina: personal collection

Transparency can empower artisans BRAZIL In 2015 Catarina Mina launched the proposal: #umaconversasincera (which translates roughly into #sinceretalks in English), whose main motivation was to engage their customer with the brand's ethos and values to build bridges between citizens and artisans and to make the artisan community stronger.

With the intention of building a more transparent fashion industry, Catarina Mina became more transparent about

her costs, publishing a cost breakdown of her products on the brand’s website.

Along with this, new work methodologies were implemented to guarantee that every piece is signed by the artisan who made it. The brand is also implementing a QR code for each piece to enable traceability and to give customers access to more information about the artisans who made the product (this information is available in the artisan's website page.)

After more than 10 years working with artisans and handcraft (since 2005), it was clearer than ever that transparency and sharing the brands challenges with their customers would help them understand the craftspeople, the skills behind the products and enable people to better support their artisan network.

Today, Catarina Mina work goes beyond fashion and unfolds as a network, advisory and platform that aims to invent new ways of working with artisans and designers, along with consumers, in order to better value and support the longevity of craft knowledge. Catarina

Mina's #umaconversasincera project has enabled the launch of other projects including: Projeto Ará (in Aracati, which involves more than 150 artisans and more than 5 types of craftsmanship); Uru Project (in Moitas); Fia Workshop of Artisans Project (in Sobral, which involved more than 30 artisans of 4 types); Olê Rendeiras de Bilro Project (in Trairi, which involves more than 100 artisans of one type of craft), all in Ceará, totaling a network of more than 300 artisans.

Catarina Mina's work models also involve sharing pricing, branding, communication, organization and management methodologies with groups of artisans.

Moreover, during the pandemic, the brand's e-commerce policy that guarantees a percentage of online sales to be destined directly to the artisans, ensured an extra income even when it was not possible to keep making products.

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4 FINAL RECOMMENDATIONS

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TAKE ACTION ON TRANSPARENCY Brands and Retailers We hope the Fashion Transparency Index Brazil influences brands and retailers to be more transparent about their social and environmental policies, practices and impacts. We call on brands and retailers to publish this information in a way that is easily accessible, understandable, honest and comprehensive.

Brands have the power, resources and moral imperative to ensure that every single person working in your value chain is paid fairly, treated with dignity and working in safe conditions.

To address the urgent climate crisis, brands and retailers must move faster to reduce the consumption of earth’s finite resources and shift to business models that are regenerative instead of destructive and linear.

By being more transparent about their policies, practices and impacts, brands can bring their consumers and stakeholders to come along with them in this journey, celebrating and supporting what is done right and questioning areas that can be improved.

In the next 12 months, we urge major brands and retailers to:

Map and publicly disclose suppliers throughout all their supply chain, starting with the first tier right down to the raw material level;

Honour your contracts, commit to supporting your suppliers and supply chain workers in this time of crisis caused by the coronavirus pandemic and after, and publish more information about your purchasing practices;

Publish more information about your environmental impacts, including the amount of carbon emissions, water consumption, pollution and waste created across your value chain, and explain what you’re doing to conserve and regenerate resources.

Governments & Policymakers Fashion Revolution believes that better laws and regulations, with more effective implementation and enforcement, are key to transforming the fashion industry.

A few fashion brands and retailers are leading on transparency and making moves towards being more sustainable and responsible, but the vast majority of brands are doing and disclosing very little. These laggards won’t move without being forced to do so through legislation.

In the next 12 months, we urge governments and policymakers to: Invest in better implementing and enforcing existing laws and policies that are meant to protect fashion’s supply chain workers and the environment; Ratify ILO Convention 190: Eliminating violence and harassment in the world of work; Put mandatory human rights and environmental due diligence on the legislative agenda and move towards proposing, passing and adopting this legislation. Make sure it includes liability for a company’s contribution to harms caused in the global supply chain.

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TAKE ACTION ON TRANSPARENCY Citizens We hope the Fashion Transparency Index Brazil has helped readers understand more about the human rights and environmental policies, practices and impacts of Brazil’s largest fashion brands and retailers. With this information, we invite you to ask brands #WhoMadeMyClothes and demand greater transparency.

Citizens have the right to know that their money is not supporting exploitation, human rights abuses and environmental destruction. But there is no way to hold brands and governments to account if information about what we buy is kept secret.

We encourage you to ask this question because it sends brands a strong message: you care about the way your clothes have been made and want the assurance that the people making them have been paid fairly, treated with dignity and that the environment wasn’t destroyed in the process. We promise you that brands are listening, so use your voice and tell them to be more transparent.

Find out how to get involved in the campaign:

fashionrevolution.org/south-america/brazil/

In the next 12 months, we urge citizens to: Always ask the brands you buy #WhoMadeMyClothes. You can do this by tagging your favourite brands on social media and using this hashtag, or you can use our automated email tool to get in touch with them directly.

Ask your elected government officials to do two things: Require fashion brands to be transparent, demand that they disclose their suppliers and that they report annually on their social and environmental impacts across the entire value chain using a common framework; Make fashion brands legally responsible for the impacts they have on the environment and the lives of people working in their supply chains, at home and abroad.

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TAKE ACTION ON TRANSPARENCY NGOs, Trade Unions & Research Institutes We hope that the Fashion Transparency Index Brazil is useful for nongovernmental organisations, trade unions and research institutes who are working directly with producers and supply chain workers on human rights and environmental protection.

This research should help you better understand which major fashion brands are publishing their supplier lists as well as what policies, procedures and commitments that brands claim to have in place.

We call on other organizations to use the information in this report to investigate the data publicly disclosed by the brands and the real impact of the actions they are implementing. We believe that this collaboration is essential to promote other initiatives that can help mitigate the adverse environmental and social impacts of fashion and generate positive value for the entire supply chain.

In the next 12 months, we urge NGOs, trade unions and research institutes to: Join us in encouraging brands to publicly disclose supplier lists and more detailed supply chain information; Join us in asking governments and policymakers for mandatory due diligence and standardised reporting; Use the data in this report to investigate the information publicly disclosed by the brands; Use the data in this report as a basis for the creation of new initiatives, complementary studies or claims in favor of improvements for the fashion industry; Please send us information about how you would like to see the fashion industry improve. Let’s work together!

We invite NGOs, unions and research institutions to contact us to discuss our findings further. Write to educacional.brasil@fashionrevolution.org

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THANK YOU!

The Fashion Transparency Index Brazil was written by Eloisa Artuso, the Educational Director of Fashion Revolution Brasil, Isabella Luglio, Project Manager of Fashion Revolution Brasil and Sarah Ditty, Policy Director, with the support from Ilishio Lovejoy and Sienna Somers, Project Managers (who are all part of the Fashion Revolution global team). The project had the technical partnership of Aron Belinky, Renato Moya and Helton Barbosa from ABC Associados.

This report has been designed by Emily Sear, Head of Design, with support from Bronwyn Seier, Social Media Manager & Designer (who are both part of the Fashion Revolution global team), and was adapted

by Igor Arthuzo, the Head of Design at Fashion Revolution Brazil. The English version of this report was translated by OYA.OJU. We extend the utmost gratitude to our pro bono consultation committee, who have been instrumental in guiding our team through this project each year –

Dr. Mark Anner, Neil Brown, Ian Cook, Subindu Garkhel, Kristian Hardiman, Christina Hajagos-Clausen, Aruna Kashyap, Kate Larsen, Dr. Alessandra Mezzadri, Katie Shaw, Francois Souchet, Joe Sutcliffe and Ben Vanpeperstraete. An absolutely enormous thank you to all the others who provided informal feedback on the methodology and report.

We would particularly like to thank Carla Aguilar, Celina Hissa, Francisco Renê Mota, Nana Lima, Nilton Vargas Aroquipa, Rita Ambrosio, Viviana Santiago and Flávia Scabin, Tamara Brezighello Hojaij and Victoriana Leonora Gonzaga from the Center for Human and Business Rights of Fundação Getulio Vargas, for their important contributions to this report.

We would also like to thank the Laudes Foundation for their financial support and Aliança Empreendedora, Associação Brasileira da Indústria Têxtil e de Confecção (Abit), Associação Brasileira do Varejo Têxtil (Abvtex), COPPEAD - UFRJ, InPACTO, Rede Brasil do Pacto Global and Sebrae for their institutional support.

A big thank you to Fernanda Simon, Executive Director; Mariana Chaves, Head of Communications, Barbara Poerner, writer and Dandara Valadares, Press Advisor from the Fashion Revolution Brazil team for monitoring and supporting the project process and the development of the report. We also thank Ana Fernanda Souza, Carolina Terrão, Elisa Tupiná, Fabrício Vieira, Loreny Ielpo, Paula Leal and Taya Nicaccio from the Fashion Revolution Brasil team, for walking beside us with such energy and dedication.

Thank you to all the brands and their representatives for making time to take part in this project, our meetings and to provide input and feedback on the research questionnaire. We know that brands receive frequent requests from many civil society organisations and NGOs, and it is difficult for them to answer all of these whilst delivering on all their other work. Your involvement is very important and much appreciated.

Last but not least, we extend our warm thanks to our local representatives, student ambassadors and teachers, as also to all the other volunteers who continue to support the movement, and who continue to boost and strengthen the activities of the Fashion Revolution in Brazil.

We would like to thank YOU for reading this report!

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Supporters/Partners:

Fashion Revolution is a non-profit organisation, and therefore everything we produce is only possible thanks to the support of financial contributions from organisations and individuals.

By making a small donation, you will be making a big difference to Fashion Revolution Brasil's important work demanding a cleaner, safer, fairer, and more transparent fashion industry. With your help, we can continue to create resources such as the Fashion Transparency Index Brazil, spark an even wider global conversation about the impacts of our clothes and create positive change.

>> DONATE HERE <<

With your support, we can continue to create positive change and transform the fashion industry! Thank you!

Fashion Revolution Foundation: Registered Charity in England and Wales under No. 1173421; Company registered in England and Wales under Number 10494997; Fashion Revolution CIC: Company registered in England and Wales under Number 08988812. Registered Address: 19 Dig Street, Ashbourne, Derbyshire DE6 1GF, United Kingdom. Instituto Fashion Revolution Brasil, registered with the Brazilian Corporation Register (CNPJ) under No. CNPJ 30.852.175/0001-98.

ITM Brasil received financial support from the Laudes Foundation and institutional support from Abit, Abvtex, Alianรงa Empreendedora, COPPEAD - UFRJ, InPACTO, Rede Brasil do Pacto Global and Sebrae. Its content is the exclusive responsibility of Fashion Revolution and does not necessarily reflect the opinions of its supporters.

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ANNEX: DEFINITIONS Auditing is the process of reviewing a company's finances, working conditions, and environmental practices. It uncovers risks to workers' safety and opportunities to improve working conditions.

Five animal freedoms proposes guidelines to guarantee the quality of life of the animal throughout its life on the farm, during transport and at the slaughterhouse. An animal's life must follow 5 basic principles: freedom from hunger and thirst (with easy access to water and a diet to maintain health and vigor), freedom from discomfort and with an adequate environment and with sufficient space, freedom from pain, injury or illness (with rapid prevention or diagnosis and treatment), freedom to express normal animal behavior of the species itself, freedom from fear and anguish (guaranteeing conditions and treatment that avoid mental suffering).

Materiality assessment is an exercise designed to gather insights on the relative importance of specific environmental, social and governance (ESG) issues. The insight is most commonly used to inform sustainability reporting and strategic planning. (Source: FIESP and Greenbiz)

Circularity (or Circular Economy) is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. (Source: Ellen Macarthur Foundation)

(Source: FAWC)

(Source: IUCN)

Freedom of association is the right of individuals and workers to form and join groups of their own choosing in order to take collective action to pursue the interest of the members of the group.

Collective bargaining is a process where employers and unions negotiate to determine fair wages and working conditions. (Source: ILO)

Gender equal pay means that men and women in the same employment performing equal work must receive equal remuneration. This applies not only to salary, but to all contractual terms and conditions of employment, such as holiday entitlement, bonuses, pay and reward schemes, pension payments and other benefits.

Pre-consumer waste is generated by textile and clothing manufacturers during any stage of the production clothing. Pre-consumer wastes include textile scraps after the cutting of garment pieces, leftover textile samples, selvedges, end-of-roll wastes, damaged materials, part-finished or finished clothing samples from the design and production department.

(Source: Walk Free Foundation)

Carbon emissions means the release of Carbon Dioxide (CO2), a greenhouse gas (GHG), into the atmosphere over a specified period of time. GHGs, such as CO2 and methane, are any gases which absorb and re-emit heat, and thereby keep the planetâ&#x20AC;&#x2122;s atmosphere warmer than it otherwise would be. (Source: OECD and Ecometrica)

Due diligence is a process through which companies assess their impacts on human rights and the environment and then take actions to reduce any negative impacts.

(Source: Secretariat of Finance and UN Global Pact)

Downcycling is to recycle something in such a way that the resulting product is of a lower value than the original item. Examples include recycling textiles into building insulation, rags, or carpet underlay. (Source: Merriam Webster)

(Source: ILO)

(Source: Equality and Human Rights Commission)

Living wage is a wage a worker earns in a standard working week that is enough to provide for them and their family's basic needs - including food, housing, clothing, education and healthcare.

(Source: Clean Clothes Campaign)

Microfibres are fibres that are shed from clothing during production, consumer use, or end of life, and end up as pollution in the environment.

Microfibres from synthetic clothing (such as polyester) are the largest source of primary microplastics polluting our oceans. Microplastics are any plastic particles smaller than 5mm.

(Source: Dobilaite et al., 2017)

Purchasing practices refers to a companyâ&#x20AC;&#x2122;s process of buying goods and services. This might include activities such as planning and forecasting, design and development, cost negotiation, sourcing and placing orders, production management and payment and terms.

(Source: Better Buying)

Remediation is the action of fixing something, particularly reversing or stopping environmental damage or human rights abuses. A Corrective Action Plan is an agreement with a supplier on what needs to be remedied, when it is to be done, and who is responsible for which tasks.

(Source: Office of the United Nations High Commissioner for Human Rights - OHCHR)

Restricted substance list sets out the specific chemicals substances that are not allowed to be used in products or manufacturing processes.

Typical hazardous substances that are restricted include lead, AZO dyes, DMF, PAHs, Phthalates, PFOS, the nickel release and so on. (Source: CIRS-REACH) Stakeholder is the individual or group that has an interest in any decisions or activities in an organization.

(Source: Inmetro / ABNT NBR ISO 26000)

Supply chain / value chain refers to all the steps it takes to produce and sell a product, from farm to closet. (Source: OECD) Wet processing facilities are involved in the production of clothing whose activities typically involve rinsing, bleaching, dyeing, printing, treating or coating fabric and laundering.

(Source: Garment Merchandising blog)

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

Disclaimer The Fashion Transparency Index Brazil is made available on the express request that it will be used only for general information purposes. Readers are encouraged to form their own views and opinions on each of the brands mentioned in this Index. All content in the Fashion Transparency Index is not to be construed as connected to or relating to any form of legal, governance, regulatory, research or investment advice nor any other specific or general advice on buying, selling or dealing in any way with the brands mentioned in this Index. This Index has not been prepared to any specific or general investment objectives. Before acting on anything inspired by anything contained in this Index, you must consider whether it is suitable to your circumstances and, if necessary, seek professional advice. No representation or warranty is given that the material in this Index is accurate, complete or up-to-date.

The material in this Index is based on information that we have found in the public domain and reasonably consider correct at time of publication.

Fashion Revolution has not verified, validated or audited the data used to prepare this Index. The assessment of fashion brands has been carried out solely according to the new Fashion Transparency Index methodology and no other assessment models used by any of the project partners or our analyst team. Any statements, opinions, conclusions or recommendations contained in this Index are honestly and reasonably held or made at the time of publication.

Any opinions expressed are our current opinions based on detailed research as of the date of the publication of this Index only and may change without notice. Any views expressed in this Index only represent the views of Fashion Revolution CIC and Instituto Fashion Revolution Brasil, unless otherwise expressly noted. The content of this publication can in no way be taken to reflect the views of any of the funders of Fashion Revolution CIC, the Instituto Fashion Revolution Brasil or the Fashion Transparency Index Brazil.

While the material contained in this Index has been prepared in good faith, neither Fashion Revolution CIC or the Instituto Fashion Revolution Brasil nor any of its partners, agents, representatives, advisers, affiliates, directors, officers or employees accept any responsibility for or make any representations or warranties (either express or implied) as to the accuracy, completeness, reliability, or truth, of the information contained in this Index or any other information made available in connection with this Index, and disclaims all liability for loss of any kind suffered by any party as a result of the use of this Fashion Transparency Index. Neither Fashion Revolution CIC, nor the Instituto Fashion Revolution Brasil, nor any of its agents, representatives, advisers, affiliates, directors, officers and employees undertake any obligation to provide the users of this Index with additional information or to update the information contained therein or to correct any inaccuracies which may become apparent.

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Attribution

Licences â&#x20AC;&#x201C; Creative Commons

This work is owned by Fashion Revolution CIC (Company number: 8988812) and Instituto Fashion Revolution Brasil and has been written by Sarah Ditty, Eloisa Artuso and Isabella Luglio.

The Fashion Transparency Index Brazil is licensed under a Creative Commons Attribution NonCommercial No Derivatives 4.0 International Licence. It is not a Free Culture Licence. Please see the link for more information: https://creativecommons.org/licenses/by-ncnd/4.0/deed. pt_BR

The research was led by Eloisa Artuso, Isabella Luglio, Renato Moya, Helton Barbosa, Ilishio Lovejoy with further support of Aron Belinky, Sarah Ditty and Sienna Somers between May and July 2020.

The Laudes Foundation has given support to the Instituto Fashion Revolution Brasil that, in turn, has funded the research for this Index. The content of this publication is the sole and exclusive responsibility of Fashion Revolution.

For the Raw Data File we make available we are not granting any licence for you to use the Raw Data, which we have compiled to produce this Index. You are only permitted to view the Raw Data File.

You are free to copy and redistribute the Fashion Transparency Index Brazil in any medium or format provided that you give Fashion Revolution and Fashion Revolution Brasil credit for creating it. This licence does not give you the right to alter, remix, transform, translate or otherwise modify the content in any way. This includes providing it as part of a paid service, nor as part of a consultancy or other service offering. You must contact Fashion Revolution at legal@fashionrevolution.org to obtain a licence if you want to commercialise the whole or any part of this Index. Š Fashion Revolution CIC 2020 Published 27th November 2020

FASHION REVOLUTION | FASHION TRANSPARENCY INDEX BRAZIL 2020

ABOUT FASHION REVOLUTION Fashion Revolution is the worldâ&#x20AC;&#x2122;s largest fashion activism movement.

We are a global campaign working towards systemic reform of the fashion industry with a focus on transparency. We believe in a global fashion industry that conserves and restores the environment and values people over growth and profit.

The issues in the fashion industry never fall on any single person, brand, or company. Thatâ&#x20AC;&#x2122;s why we focus on using our voices to transform the entire system. With systemic and structural change, the fashion industry can lift millions of people out of poverty and provide them with decent and dignified livelihoods. It can conserve and restore our living planet.

It can bring people together and be a great source of joy, creativity and expression for individuals and communities.

In Brazil, we have been operating since 2014 developing projects, carrying out activities and fostering the union of a network of people, initiatives and organizations in the sector. In 2018, we became Instituto Fashion Revolution Brasil, a non-profit non-governmental organization.

www.fashionrevolution.org/brazil @fash_rev_brasil @fashionrevolution.brasil

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" If we are to evolve from this global pandemic to become a more balanced and mindful fashion industry, we have to make darkness a thing of the past, and embrace radical transparency as our guiding light."

Orsola de Castro Co founder, Fashion Revolution

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