Why Fashion Brands Fail to Change: Realizing Human and Environment-Centered Supply Chains and What It Takes to Get There

Your company gets the phone call one day that you hoped would never come. A reporter asks about some issues they've uncovered in your production process. Maybe it's a report of unsafe factory conditions, or a discovery that your supplier has failed to pay employees a reasonable wage, or one of your subcontractors is dumping toxic waste that is now entering the local water supply. Whatever the story may be, it's a PR nightmare and, for most people with a pulse, it shakes you to your core to know that what you do for a living has caused destruction and harm to others. So what do you do?

Just a few weeks ago, Patagonia and Stella McCartney - both big brands in the world of sustainable supply chain practices - had to confront this very scenario, learning that a supplier used by both companies was committing serious animal cruelty and abuse.

Stella McCartney promptly suspended all business with their supplier, Ovis 21, with the knowledge of these animal abuses. McCartney's statement read, "We are now even more determined to continue our fight for animal rights in fashion together and monitor even more closely all the suppliers involved in this industry." At first glance, anyone's gut reaction might indicate that McCartney did exactly the right thing.

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Contrast that with Patagonia's initial reaction to the same news. Patagonia expressed in a statement:

"We accept responsibility for everything done by our suppliers at any level, but especially in this case," and went on to commit to "working with Ovis 21 to make needed improvements, reporting back to our customers and the pubic on steps we are taking."

Patagonia's decision to resist throwing up their hands and walking away is certainly a road less traveled, and not to mention extremely expensive.

But at the end of the day, it's the right decision. The path that Patagonia is taking is the only one that will lead to the evolution of a major industry - one is second only to the extractive industry in damages when it comes to the environment and labor rights - to work more for global development goals.

While the average customer might applaud McCartney's response, Patagonia should be celebrated for their intention to stay and fix the problem to reach a long-term solution. After all, who will Stella McCartney source from next? Will this new supplier be any better? Will putting Ovis 21 out of business by ending their largest contracts prevent any other company from acting just as irresponsibly? Sadly, the answer is probably not.

It's worth noting that several days later, Patagonia also chose to cease all business with Ovis 21. This decision smells strongly of a reaction to public pressure, driven by PETA. PETA has released several statements, one of which read:

"Unlike Stella McCartney, who suspended all purchases of wool within minutes of watching PETA's video, Patagonia has failed to act even remotely responsibly, despite our efforts to work with you on animal issues. We strongly urge you to do the right thing now."

While this specific case might be about animal cruelty, it's no secret that human rights and environmental abuses happen every single day in the complicated supply chains of multinational companies, and not just in the fashion industry. Many of these issues come from the layers of sub-contractors that make it nearly impossible for multinational companies to gain transparency into their supply chain.

Think for just a moment about one product - a shirt made by Benneton. Benneton might draw up a design in Italy and then send that design to one of its many factories located in India that accommodates high-volume orders. That contractor in India cannot complete the order at the volume and timeline it has promised, so it subcontracts the work - whether Benneton is aware or not - to two factories in Bangladesh. This narrative is exactly how Benneton clothing tags ended up in the rubble of the 2013 Rana Plaza factory collapse that killed nearly 2,000 people and injured many more.

The largest fast-fashion brands in the world - think H&M, Zara, Forever 21, even Walmart - are loved by customers the world over for low prices and known for lean supply chain strategies that can get products to market in a flash. This supply chain strategy that can get a product from design to store floor in just two weeks is often what promotes subcontracting just to get the job done, placing pressure on factories to push production to the limits, often risking employee safety and wellbeing in the process.

Until large companies take the posture of working with their suppliers as partners - for better or worse - they will fail to gain ground on aligning supply chain practice with sustainability goals and human rights codes. Pointing fingers, shaming, boycotting, and abandonment is the least productive action that anyone can take in response. Take the case we started with: Stella McCartney and Patagonia are not entirely to blame. It's the short attention span and impatience that the public chooses to exercise rather than supporting efforts toward improvement.

Often overlooked by the global development community, except in the case of commodities like coffee and cocoa, more sustainable and "clean" supply chains offer up a crucial and untapped opportunity to achieve development goals in countries all around the globe. And there is no shortage of willingness by companies to align.

There's a business case to be made. Eileen Fisher is certainly the hallmark in women's fashion. New technologies - that companies like Levi's, Timberland, and many more are implementing - offer ways for production to be more environmentally sound while simultaneously decreasing costs and thus increasing margins. Similarly, many companies - take Kate Spade for example - are beginning to look beyond the traditional manufacturing markets where labor is still inexpensive but matched to a living wage and the export costs are lower, allowing these companies to shift their production without increasing the consumer-facing price-point.

But, that's not to say there won't be other issues that crop up. With easily over 100 indicators for what makes a supply chain sustainable or ethical and very little consensus on the definition of those terms, it's unrealistic to think these issues can change overnight if only decision-makers would behave better. The fashion industry can only change incrementally. And the companies who are playing the long game will ultimately make a difference - and win out financially - when all is said and done.