Almost nine out of ten fashion brands do not disclose annual production volumes and 99% have not committed to reducing the number of new items they produce despite proposed EU legislation to charge brands for fashion waste, according to the Fashion Transparency Index 2023.

The Fashion Transparency Index 2023, which was published yesterday (13 July), explains mitigating fashion waste remains the big elephant in the room with a 3% increase in the number of fashion brands not disclosing their annual production volumes (88% in 2023 compared to 85% in 2022).

The authors of the report state: “Brands absolutely know how much they are producing; what business can survive without this information? The continued lack of transparency begs the question, what’s being hidden?”

This is despite the EU Commission proposing new rules last week (6 July) to make fashion brands and retailers responsible for the full lifecycle of textile products and requiring them to financially support the sustainable management of textile waste across the EU.

For the first time, the Index looked to see if fashion brands disclose a commitment to ‘degrowth’, a concept stemming from ambitions to balance economics with planetary boundaries by a planned reduction both in how much new clothes are produced and consumed.

The report states: “Take-back schemes, rental and other new business models are as effective as blocking a dam with a bandage unless the issues of overproduction and overconsumption are addressed at the root.”

However, the Index suggests 99% of brands do not disclose a commitment to reduce the number of new items they produce.

The report continues: “It is clear that we cannot shop our way out of the climate crisis and yet the industry continues to grow at a staggering rate, ignoring the science and prioritising the money.”

The Index explains luxury fashion brand Armani and mass fashion brand United Colours of Benetton are the only two out of 250 brands to have disclosed a commitment to degrowth, with Armani committing to a ‘significant reduction in SKUs’ and United Colours of Benetton to ‘decouple the company’s economic performance from the increase in the volume of garments’.

Fashion Transparency Index 2023’s key findings

The Fashion Transparency Index is an annual review of 250 of the world’s largest fashion brands and retailers ranked according to their level of public disclosure on human rights and environmental policies, practices and impacts in their own operations and in their supply chains.

The scores are created based on 258 indicators in five key areas:

1. Policies and commitments
2. Governance
3. Supply chain traceability
4. Know, show and fix
5. Spotlight issues, which this year are – decent work (forced labour, living wages, purchasing practices, unionisation, and collective bargaining); gender and racial equality; sustainable sourcing and materials; overconsumption, business models, waste and circularity; water and chemicals; climate change, fossil fuels and biodiversity.

The overall finding from this year’s index is the global fashion industry continues to make unimpressive progress in terms of transparency with an average score of 26% (up just 2% from last year).

However, for the first time in the index’s seven-year existence, two brands scored 80% or higher. Italian fashion brand OVS scored the highest again this year with 83%, closely followed by luxury brand Gucci which climbed 21 percentage points to reach 80%.

Liv Simpliciano, who is the policy and research manager at the global non-profit Fashion Revolution which produces the report each year, states: “We are pleased that a minority of brands are finally scoring 80% or higher but even 100% transparency is only the starting point and it seems many major fashion brands have yet to even show up to the race.”

Gucci being in second place is also deemed a breakthrough as the report’s authors note the luxury fashion sector has dragged its feet on transparency in the past. In fact, this year five of the biggest movers are luxury brands – Gucci, Armani, Jil Sander, Miu Miu and PRADA.

For the first time, more than half (52%) of the 250 brands disclosed their first-tier supplier lists, with the authors describing it as a promising shift compared to the 32 out of 100 brands (32%) in its first edition. But, the index states more work is needed
on the transparency of where clothes are made across the supply chain

The report reveals major fashion brands continue to shirk responsibilities like tax and purchasing practices which drive inequalities within the industry. It shows the pay gap between fashion CEOs and garment workers continues to widen, meanwhile only 18% of brands are disclosing the percentage of executive pay tied to their sustainability target.

Conversations on circularity are growing but most brands (95%) are not transparent about how they are enabling a Just Transition to a circular economy which paints an unclear picture on how workers’ voices and needs will be addressed.

Only 12% of major fashion brands (down 3% from last year) have published commitments to zero deforestation despite accelerating biodiversity loss globally.

The climate crisis is growing in intensity and urgency but 94% of brands still don’t disclose what fuel is used in the manufacturing of their clothes. Plus, the report claims only two out of 250 brands have shared a commitment to degrowth at a time when it says the industry needs to slow down and scale back.

The report suggests that despite generating trillions of dollars in annual revenues, the fashion industry, which exists due to the hard work of garment workers, is still failing to secure living wages for the people who make our clothes. It says 99% of major fashion brands do not reveal the number of workers in their supply chains being paid a living wage.

Major fashion brands continue to pay lip service to workers’ rights to organise
and bargain, according to the Transparency Index. It says just 1% of brands disclose the number of collective bargaining agreements providing wages higher than required by local law, despite most (85%) publishing policies on freedom of association. Plus, only 15% of brands disclose the number or percentage of their
supplier facilities that have independent, democratically elected trade unions.

In terms of water usage, the report claims clothes are produced by guzzling water in
regions where it is scarce and by using thousands of toxic chemicals. Yet, it says only a quarter (23%) of major brands and retailers disclose their methodology to identify these water usage risks.

On the plus side, the index reveals with due diligence legislation on the
horizon, led by the EU, fashion brands have increased their disclosure on their social and environmental due diligence. In fact, almost half (49%) of major fashion brands disclose their approach to conducting environmental due diligence.

Over half of major brands (51%) publish targets on sustainable materials yet only 44% provide information on what constitutes a sustainable material, the report explains. It also reveals that less than a third (29%) of brands disclose the
breakdown of fibres sourced annually.

The fashion brands scoring the highest and lowest on transparency

The highest-scoring brands in 2023 are:

• OVS – 83%
• Gucci – 80%
• Target Australia – 76%
• Kmart Australia – 76%
• United Colors of Benetton – 73%
• H&M – 71%
• C&A – 68%
• The North Face – 66%
• PUMA – 66%
• Timberland – 66%
• Vans – 65%

The lowest-scoring brands in 2023 with less than 1% or 0% score are:

• ANTA – <1%
• Tom Ford – <1%
• Bosideng – <1%
• New Yorker – <1%
• Max Mara – <1%
• Fashion Nova – <1%
• Splash – <1%
• Belle – 0%
• Youngor – 0%
• Semir – 0%
• Van Heusen – 0%
• Savage X Fenty – 0%
• Mexx – 0%
• Metersbonwe – 0%
• KOOVS – 0%
• K-Way – 0%
• Heilan Home – 0%
• Big Bazaar – ffb – 0%

None of the lowest-scoring brands had responded to Just Style’s request for comment at the time of going to press.

Recommendations for fashion brands and retailers

The recommendation for fashion brands and retailers is to publish the supply chain right down to the raw material level as soon as possible in alignment with the open data standard, and to upload the list to the Open Supply Hub.

Fashion brands and retailers are advised to be completely transparent on all the topics covered in the Fashion Transparency Index, continuously updating public disclosure in response to evolving risks.

The Transparency Index says robust due diligence on human rights and environmental risks needs to be implemented and brands and retailers should publicly evidence the outcomes and impacts of all efforts.

Brands and retailers should work collaboratively on due diligence with peers, especially when operating in the same facilities, and with rights holders,
especially women workers and trade unions, and then share these efforts publicly.

Finally, the authors of the report advise fashion brands and retailers to support legislation that requires greater transparency and corporate accountability on
environmental and human rights issues in the global fashion industry.