The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu


Wednesday, April 29, 2015

Strategic CSR - Fast fashion

If you haven't yet seen it, John Oliver's attack on the fast fashion industry last weekend is very entertaining:
 
 
The danger with comedy, however, is that the message is over-simplified in order to deliver a clean punchline. The reality is often not so cut-and-dried, especially when you are dealing with economic development and individual self-interest. In contrast to Oliver's pessimistic view of the way that fashion companies today still struggle with "supply chain management," for example, the article in the url below indicates that there has been significant progress:
 
"Adidas terminated agreements with 13 suppliers last year for non-compliance, according to the sportswear company's 2014 sustainability report."
 
The article provides evidence that Adidas was not simply cutting-and-running at the first sign of trouble with these suppliers, but had made every effort to work with them to improve their performance on the company's audit. In spite of Adidas' best-practice approach and in the face of what it describes as "severe or repeated non-compliance," the company was forced to end the relationship in these 13 cases. But, in contrast to Oliver's simplistic tarring of the whole industry, it is clear that such rejections are becoming increasingly common:
 
"The company's global sourcing team, which works to pre-screen potential new suppliers, assessed 226 factories last year, rejecting 104. Some are rejected on a first visit, others, that have serious but correctable non-compliance issues, got three months to fix problems before being re-audited. The final rejection rate in 2014 was 10 per cent, the company, said. … Adidas also issued 65 warning letters to suppliers in 13 countries about ongoing serious non-compliance issues. Most were in Asia, where 60 per cent of its supplier factories are situated."
 
There are other elements of the debate that Oliver neglected to mention:
 
"In the wake of the Rana Plaza factory collapse in Bangladesh, trade unions, NGOs, the International Labour Organization and international buyers worked together to create the Bangladesh Accord on Fire and Building Safety. By September last year, all Adidas Group supplier factories disclosed to the Accord had been assessed for electrical, fire and building safety."
 
I highlight all of this not to pick on Oliver who, in his short run so far on TV, has brought public attention to a number of important issues (see: https://www.youtube.com/user/LastWeekTonight; his attack on FIFA is particularly good: https://www.youtube.com/watch?v=DlJEt2KU33I), but merely to emphasize the complexity of this issue and to combat the stereotypical narrative. Ethical supply chain management has made vast improvements since Nike's sweatshop days and a number of companies are adopting progressive approaches to reduce the number of incidents of abuse, without shutting off the economic opportunities such factories can provide to the developing world (which is no joke)!
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
 
 
Adidas terminates deals with 13 suppliers in Asia over non-compliance
By Marino Donati
April 27, 2015
Supply Management