Ethical Sourcing: How fast fashion giant H&M is setting an example in the wake of the COVID-19 crisis

At a time when an increasing number of fashion bigwigs are cancelling orders to the tune of billions of dollars, H&M has set an example by standing in solidarity with its supply chain partners in Bangladesh.
“We will stand by our commitments to our garment manufacturing suppliers by taking delivery of the already produced garments as well as goods in production. We will, of course, pay for these goods and we will do it under agreed payment terms. In addition, we will not negotiate prices on already placed orders,” the fast fashion stalwart has revealed in a media message.
As per industry reports, the brand sources orders worth nearly US$ 4 billion a year from more than 230 Bangladeshi factories.
Bangladesh is going through a humanitarian crisis as multinational fashion brands have cancelled all existing orders in wake of the COVID-19 pandemic. The news has made headlines globally, raising serious concerns about ethical sourcing in fashion and textiles.
As per the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), as of April 9, 2020, orders worth US$ 3.11 billion have been cancelled, pushing about 1,123 factories to struggle with the loss. At least 2.26 billion workers have been affected so far – either furloughed without pay or lost their jobs altogether as an increasing number of factories are being compelled to shut down operations.
The BGMEA has revealed that Primark, Matalan and the Edinburgh Woollen Mill are a few well-known names that have collectively scrapped US$ 1.7 billion and suspended an additional US$ 1 billion worth of orders to minimize their own losses.
“Every store in every country in which we operate is now closed. We are losing sales of £650 million a month as a result. We have therefore been left with no option. We have large quantities of existing stock in our stores, our depots and in transit, that is paid for. If we had not taken this action, we would be taking delivery of stock that we simply could not sell. This has been unprecedented action for unprecedented and frankly unimaginable times,” a Primark spokesperson had told ‘Quartz’ via email.
Rubana Huq, President, BGMEA, has since taken to social media to urge the country’s ‘long term partners and brand to just do the right thing by honoring their contracts to help millions of Bangladeshi garment workers survive’.
“While the COVID-19 wreaks havoc globally, the fate of our industry and our workers has ended up being uncertain. With brands handing out cancellations and deferments, we have no idea what tomorrow holds. Brands who were partners last month have all turned into strangers, unable to fathom our exposure to an existential crisis of handling the wages of 4.1 million workers. Without orders and with empty production spaces, all the workers run a risk of being totally unemployed for a long time to come. For us it comes down to a level of bare minimum survival mode, while the western world still has the privilege of having bailouts from their privileged governments. On that consideration, we call upon the international community to surface with a renewed pledge to support the workers of Bangladesh, if not just the businesses,” she shared on Linkedin.
Close on the heels of H&M’s announcement, a few more brands and companies including, Inditex, Marks and Spencer, Kiabi, PVH Corp (which owns Tommy Hilfiger and Calvin Klein) and Target have assured payment for orders already finished or in production.
Other renowned names with manufacturing facilities in Bangladesh include Bestseller, Adidas, C&A, Marks and Spencer, Target and VF Corp (The North Face, Dickies, Vans), Tesco, Kohls, Walmart, LPP, and Mothercare among others.
The Center for Global Workers’ Rights responded to the crisis through the following statement: “The responsible approach is for brands and retailers to find ways to access lines of credits or other forms of government support to cover their obligations to supplier factories so that they can cover their expenses and pay their workers, in order to avoid sending millions of workers home with no ability to put food on the table, let alone cover medical expenses.”