Fashion Roundtable's Policy Update on Labelling Standards in the Fashion Industry

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By Johanna Ramaer

The fashion industry operates in the most complex supply chains. Transparency is very low and knowing where, how and who made a piece of clothing is very difficult to locate. Within this environment it is difficult for consumers to make conscious and sustainable buying choices. This is especially worrying as the number of consumers who want to know where and how their clothes are made is rising. As sustainability is increasing in importance, more and more companies put effort in demonstrating their contribution to sustainability through the adoption of different types of certifications, labels and ethical commitments.

The number of different schemes and voluntary initiatives has grown exponentially in recent years. According to Ecolabel Index there are currently 445 ecolabels circulating within 197 countries spread across 25 industries. Of these 445 ecolabels, 107 are on textiles; addressing environmental and/or social sustainability within the fashion industry. Each label covers a diversity of topics including cotton, farmer welfare, child labour, forced labour, organic production, working conditions, chemical use, and so on. They all have very diverse features. Some are industry wide initiatives while others are government-led ecolabels; some focus just on one issue, while others try to address the whole supply chain. The immense rise of ecolabels is a response to the complex and obscure supply chains in which the fashion industry operates. However, because of the immense rise in labelling standards, there are currently too many, causing confusion among both consumers and companies.

'The false promise of certification' 2018 report on labelling standards by Changing Markets Foundation, shows that, rather than being an accelerator for positive change, this ‘flood’ of labels is actually standing in the way of genuinely sustainable consumption. It finds that voluntary sustainability certification has largely been derailed from its original promise and that, in the vast majority of cases, consumers are not getting what they pay for with their well-intentioned purchasing decisions. With a growing number of ecolabels on products, consumers may become confused and decide that, in fact, none of the labels is credible. This is problematic considering that, according to Nielsen Global Survey on Corporate Social Responsibility 2014, undertaken by the information, data and measurement firm, it was revealed that many shoppers rely on labels and certifications as a quick and easy way to identify more responsibly made products without having to become supply chain experts. This asks for a revision of and an alternative to the big number of ecolabels the industry currently relies on. 

Therefore, Fashion Roundtable urges the government to step in and take the lead to implement structure and organisation with regards to the big variety of ecolabels operating in the textile and fashion industry. In order to create more structure and clarity we recommend the government to: 

  • Create a Panel to assess existing certifications and labels;

  • Recognise the labels that are most rigorous and transparent by officially publishing them on gov.uk, so that private sector and consumers distinguish which labels are reliable;

  • Create an awareness campaign, bringing to public attention the new implementations;

  •  Assess the list every 1-2 years, which gives the opportunity to labels to enter or exit the list.

Fashion Roundtable believes these recommendations will be a good first step towards dealing with the problems that currently keep ecolabels from informing consumers correctly. Below we will discuss these problems further. 

Within the UK there are several institutions/labelling standards that are most common in dealing with sustainability issues in the fashion industry:

-   The Ethical Trading Initiative (ETI); All corporate members of ETI agree to adopt the ETI Base Code of labour practice, which is based on the standards of the International Labour Organisation (ILO).

-   The Fair Trade Foundation; Along with advocating for payment of fair prices to exporters, Fairtrade sets social, economic and environmental standards for both companies and the farmers. Products that meet these standards are licensed with the FAIRTRADE mark.

-   The Soil Association; certifies two independent organic standards.

o   The Global Organic Textile Standard (GOTS); GOTS is the leading textile processing standard for organic fibres. It looks at the whole supply chain.

o   The Organic Content Standard (OCS); OCS ensures that a final product contains the accurate amount of a given organically grown material.

-   Better Cotton Initiative; BCI is a non-profit organization that is encouraging a more sustainable way to source cotton through a defined set of standards.

-   OEKO-TEX; label that focuses on the use of chemicals throughout the whole process.   

These are just a few of the many labelling standards that exist in the fashion industry. Some of these are industry specific, while others are also used in other industries. Some focus on the whole supply chain, while others focus on just one issue like the farming of cotton. The fact that all the labels differ so much in terms of scope and stringency has created numerous problems.

 

-   Lack OF A Holistic Approach

Many standards only certify one aspect of the whole production process. This can mean, for example, that the cotton can be organically farmed but not necessarily produced under an environmental management system. Some standards even allow companies to pick and choose criteria. Considering that the fashion industry involves very complex supply chains, consumers can get very confused in terms of what a specific label covers and what it does not. Thus, it is very important that a standard covers all aspects of the supply chain and is clear about the required criteria.   

-   Lack Of Independence

Some standards are set up ‘in-house’ and/or monitored by brands themselves, which creates a conflict of interest. Moreover, many standards are focused on getting all industry players on board to meet the growing demand for certified products. This, in turn, can create a race to the bottom and lower the entry requirements.

-   Transparency

It is often unclear for consumers which criteria a label uses to assess products and also which criteria are optional or if they are mandatory. Moreover, reporting on the performance of different members is often not published. This makes it difficult for consumers to know what the performance of a brand is and which criteria they are actually fulfilling.

-   Weak monitoring and enforcement mechanisms

With some labels, brands are not monitored by an external partner. Instead, they provide the information themselves which allows for misleading information. Moreover, brands are not always checked up regularly which means that they can change their practices without losing the certification. 

-   Lack of common definition

Standards use different terms and criteria, which allows for a different understanding of what constitutes sustainable clothing.

As the analysis of 'The false promise of certification' report by Changing Markets Foundation has shown, there is currently no single scheme or label that ensures transparent, traceable and reliable high standards at every stage of the supply chain. Transparency in the sector still seems to be optional; only the most progressive companies make their suppliers public, and even fewer are willing to report on their performance. Moreover, the voluntary character of most labels forms an obstacle to the implementation of higher standards that cover the whole industry or entire supply chain. Also, the multiplication of labels covering the same goods and services may also lead to ‘label shopping’ by companies looking for the easiest label to achieve. This allows for free-riders – companies that sign up to these initiatives without actually implementing meaningful action. And subsequently, less sustainable products might be awarded the same label and enjoy the same consumer preference benefits as truly sustainable products. These numerous problems ask for the government to step in and implement structure in the field of ecolabels. 

 While setting up and publishing a list of reliable labels as discussed above, the government should recommend apparel and footwear companies to:

  • Pursue a supply-chain all-encompassing label, among the other certifications they intend to obtain. That is, a label that looks at several issues across the whole supply chain. Such a label has much more opportunity to genuinely contribute to sustainable practices. Also, one label is much easier to understand for consumers than several different ones. GOTS is an example of an all-encompassing label as it certifies and regulates at all stages of the supply chain;

  • Have the labels audited by accredited auditors;

  • Have a visual representation of products’ sustainability performance covered by the supply-chain label. The EU Energy rating label is a successful example of a label that is easy to understand and read for consumers. It uses an A-G rating, which makes it very easy for consumers to compare products.

Currently, the ecolabel environment within the fashion industry is too scattered and complex, and asks for restructuring measures. It is eventually crucial in the fashion industry  to emphasise on labelling schemes that encompass the environmental, social, political or economic issues that are part of the industry’s supply chains. For now, however, it is recommended to first implement more organisation and transparency within the UK by putting forward a list with the labels that are most promising.

Tamara Cinciklabelling standards, fashion industry, policy