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Fashion brands make ‘mostly positive progress’ in latest ACT report

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7 months ago

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Fashion brands make ‘mostly positive progress’ in latest ACT report

Comparing the responses from brands to the ACT Commitment Reporting questionnaire in 2021 to the results in 2023 ACT found “mostly positive progress.” Credit: Shutterstock

In its “Accountability and Monitoring Report 2023: Pivotal Progress in Responsible Purchasing Practices” ACT surveyed 19 of its signatory brands to evaluate the progress of garment, textile and footwear brands in meeting their due diligence responsibilities.

Comparing the responses from brands to the ACT commitment reporting questionnaire in 2021 to the results in 2023 ACT found “mostly positive progress” and a “slight increase” in average scores across all sections.

However, the organisation found some specific areas required “special attention.”

Brands were found to face the same purchasing practice issue as in 2021: price quotations, which around 50% of suppliers consider important for providing a living wage.

ACT uphold five commitments for brands that sign under the organisation with each falling into the red (0-59%), amber (60-74%), yellow (75-94%) and green (95-100%) percentage scale.

Here is what was found in comparison to the 2021 results:

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  • Brands commit that purchasing prices include wages as itemised costs:

Progress jumped from red to amber, and found that 37% of suppliers received guidance on labour costing in line with the ACT labour costing protocol.

Surveyed suppliers commented that brands need to be more aware of the increased costs of labour and materials and consider this when setting a target price while some brands claimed they did not know about the ACT Labour Cost Protocol when questioned.

  • Brands commit to fair terms of payment:

Progress stayed on yellow between the two comparison years, with 96% of orders being paid in line with agreed payment terms.

  •  Brands commit to better planning and forecasting:

Progress also stayed the same at yellow from 2021 to 2023 and 79% of planning and forecasting systems including capacity booking made for at least the main suppliers.

The reports highlighted that: “Due to the unpredictability of trade and stock health management over the past 18-24 months this is an area that the business needs to focus on improving going forward.”

  • Brands commit to undertake training on responsible sourcing and buying:

Progress was made from amber to yellow as 64% of brands delivered training on ACT Commitments on purchasing practices, for all relevant employees.

  • Brands commit to practising responsible exit strategies:

Progress rose from amber to yellow in 2023 with 64% of factory exits complying with the ACT responsible exit checklist.

General comments form surveyed brand employees confirmed that responsible exit practices were in place, but some felt that there was a lack of transparent monitoring of what happens to workers after the exit.

Brand and supplier respondent breakdown

ACT also conducted a survey in 2023 involving its members to roll it out for both their own brand representatives and their suppliers in ACT priority countries.

For those brands participating, 1,634 responses were received for the Brand Survey, which was down 188 responses (10%) from 2021. In contrast, the number of suppliers taking part increased by 85 to 1,423 – 6% up from 2021.

By far the biggest number of responses came from China but this year there were around 20% fewer suppliers operating there.

The majority of supplier survey respondents came from factory/production units (52%) followed by direct suppliers (39%). Only a 9% of respondents were from thrid parties.

The report said this was “good” as it showed the results reflected more closely the relationship with the specific production sites, which had the highest and most direct control over workers’ wages and protections.

Four brands saw a decline in brand survey scores given by suppliers across most sections and three brands saw their brand survey scores decline in 2023.

In May 2024, the ACT agreement worked with fashion brands and the non-profit global union IndustriALL to reach individual binding agreements that aimed to support the ongoing process of reaching a collective bargaining agreement over wages in Cambodia.


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