Friday, March 13, 2009
Looking for Blog Writers!
If you are interested, please send me a note at mfyodorova . . . at . . . hotmail.com. Please include a writing sample.
Tuesday, June 24, 2008
Abercrombie & Fitch - Recommendation: Bad and Tacky
- Mike Jeffries, CEO, Abercrombie & Fitch. As quoted in “The Man Behind Abercrombie & Fitch”. (2006)
How should we judge A&F’s marketing and advertising approach? Should we judge it at all within the parameters of corporate social responsibility? Many brands use an aspirational marketing approach to sell their products (have you ever seen an “average” looking model in any fashion campaign?). Companies try to sell a “lifestyle”, not a shirt or car or frying pan. A&F says that what it sells is “cool” – not a particular racial prototype. But, their main advertising does not reflect the diversity it has recently committed to – and, probably, does not reflect the diversity of who actually shops in its stores. Is that hypocritical? Of course. But, really, their sexualized, white–bread advertising is not that bad if compared to all the other CSR issues they do not address AT ALL like human rights, child labor, fair wages and the environment to name just a few. (See the full issues template here.)
Perhaps if A&F balanced out some of their more provocative advertising approaches with a commitment to human rights and fair labor, their actions would be more tolerable (look at American Apparel, after all). But, A&F seems to show no social responsibility at all except in the arena of diversity, which was forced upon them by a court order. Call it “diversity-washing.” Granted, there has been some progress on diversity within the company’s operations. The number of people of color enrolled in the retailer’s managers-in-training program has grown by more than 50%. They have partnered with many minority-focused organizations on diversity training and scholarship opportunities. But, in the end, making their advertising more inclusive would probably do more overall for minority teenagers then a few million (if that much) in scholarships. Perhaps it will be a gradual shift. As the company’s staff becomes more diverse (because of the court order), there will be more of an internal push for inclusive advertising.
We will see.
But even if their diversity score increases, their complete inaction on almost all of the other priority issues in our template will not win a “Good” from us. So, in summary, we feel that avoiding Abercrombie & Fitch is probably the best course of action. Score: 1.33.
Abercrombie & Fitch - Template
Indicator | Commitments/Comments | SOI Rank | |
Environment – Operations | |||
GHG Emissions | No visible involvement. | 1 | |
Energy Efficiency | No visible involvement. | 1 | |
Air & Water Pollution | No visible involvement. | 1 | |
Promoting Employee Enviro. Awareness | No visible involvement. | 1 | |
Waste Reduction (Haz & Non) | No visible involvement. | 1 | |
Environment – Materials | |||
Use of Toxics in Products | No visible involvement. | 1 | |
Use and Promotion Of Sustainable Materials (i.e. organic cotton) | No visible involvement. | 1 | |
Social | |||
Workplace Diversity | Fine $40M for discriminatory practices in its stores. Settlement created diversity ensuring structure for internal ops. | 6 | |
Unions | No visible involvement. | 1 | |
Workplace Safety | No visible involvement. | 1 | |
Community Relations | No visible involvement, but website says that information is “Coming Soon”. | 2 | |
Strategic Partnerships with NGOs | Partnered with the Anti-Defamation League on campus program to teach diversity-training. Set Up Diversity scholarships with several partner orgs. like UNCF. | 4 | |
Animal Welfare | No stated policy, but in 2005 joined PETA's Wool Campaign, setting a new standard for clothing companies by pledging not to use Australian wool in any of its garments until both | 2 | |
Human Rights | |||
Operating in Countries of Conflict | No visible involvement. | 1 | |
Child Labor | No visible involvement. | 1 | |
Forced Overtime | No visible involvement. | 1 | |
Indentured Servitude | No visible involvement. | 1 | |
Compliance with ILO Standards? | No visible involvement. | n/a | |
UN Global Compact? | No visible involvement. | n/a | |
Supplier Management Issues | |||
Code of Conduct | No visible involvement. | 1 | |
Fair Wages | No visible involvement. | 1 | |
Training | No visible involvement. | 1 | |
Environmental Management | No visible involvement. | 1 | |
External Verification | |||
Member of | No | n/a | |
CSR Reporting Standard? | No CSR report. | n/a | |
Other | | n/a | |
Demonstrated CSR Leadership Among Peers? | Um, No. |
Friday, June 20, 2008
Abercrombie & Fitch - Summary
Some Key Facts: Valued at $5 billion, the company now has revenues approaching $2 billion a year rolling in from 944 stores across four brands: Abercrombie & Fitch, abercrombie, Hollister and Ruehl. A&F sources from vendors in 37 countries and the US. The company sources its merchandise from approximately 258 factories and suppliers, primarily in Southeast Asia, and Central and South America.
A&F has been in the news for a number of issues:
- In 2005, a class action suit was filed against A&F on behalf of employees who alleged that they were wrongfully refused jobs or terminated based on their race, ethnicity, or national origin because they did not promote the "A&F Look." A&F settled with the employees for $40M and was forced to create an Office and Vice President of Diversity (other provisions of the settlement here.)
- In 2006, the Securities and Exchange Commission issued a formal order of investigation of the clothing retailer, and the trading in the company’s Class A shares.
- In 2002, A&F was one of 26 retailers to settle lawsuits filed by Sweatshop Watch, Global Exchange, Asian Law Caucus, Unite, and Saipan garment workers that alleged violations of U.S. labor laws and international human rights standards.
- A&F has been the target of boycotts and criticism for selling t-shirts with racist and sexist slogans.
- Nationwide Children’s Hospital in Columbus, Ohio has stated that it plans to rename its emergency room the "Abercrombie & Fitch Emergency Department and Trauma Center" in exchange for a $10 million donation. A letter written by the Campaign for a Commercial-Free Childhood, and signed by over 100 doctors and children’s advocacy groups, urged the hospital not to go ahead with the renaming, arguing that, "Given this company's appalling history of targeting children with sexualized marketing and clothing, no public health institution should be advertising Abercrombie & Fitch."
Personally Speaking: I always got a kick of the MadTV A&F spoofs. Check some out here on YouTube, if you like that sort of thing. (Warning: like much of MadTV, they are often politically incorrect.)
Monday, June 16, 2008
H&M - Recommendation: Good
Unfortunately, this is either the strength of the scorecard approach - in that it is able to cut through the company's PR hoopla about certain achievements . . . or, it is the weakness of the scorecard approach - in that most companies, even if they excel in certain areas, will receive a lower score overall because being socially responsible as a large international apparel retailer is hard.
In the end, we feel that, overall, H&M has shown a commitment to doing business in a socially responsibly manner. We were swayed by H&M's efforts on:
- The Environment: We liked that H&M monitors key environmental impacts. Many apparel companies focus their CSR efforts primarily on human rights and labor issues. But, environmental impacts on the local communities where H&M's products are manufactured and the larger, global impacts of energy and water use, are becoming increasingly more important.
- Transparency: H&M is a member of the Fair Labor Association. In joining the FLA, H&M commits to a rigorous labor compliance program that includes implementing the FLA Workplace Code of Conduct and conducting monitoring to ensure that any violations are identified and corrected. Member companies also agree to publicly disclose the results of FLA monitoring.
- Performance Targets: We liked H&M's publicly available "Global Targets" (with employee names attached to each action).
- Integration: H&M is one of the few apparel companies that recognize that the way the design and procurement process is handled with suppliers is very much connected to various CSR issues (such as forced overtime). CSR can not be an effort that exists in a departmental vacuum, but must be an initiative that is integrated throughout a company's operations. From the CSR report: "Fashion today works in short seasons or cycles. Without responsible buying practices this can result in time and financial pressures on suppliers that can prevent them from safeguarding their employees’ rights. So we must address product development and buying practices in different ways."
H&M - Scorecard
Indicator | Commitments/Comments | SOI Rank | |
Environment – Operations | |||
GHG Emissions | Tracks emissions from Energy Use, Goods Transport, Business Travel and Company Cars | 6 | |
Energy Efficiency | H&M monitors energy use. | 5 | |
Air & Water Pollution | Use a requirement for the quality of discharged water using guidelines developed by a Business for Social Responsibility task force. Monitor waste water by asking suppliers to submit test results. | 7 | |
Promoting Employee Enviro. Awareness | Training for employees is part of environmental policy. Nominated as one of “Top 10 Companies with The Most Innovative Internal Sustainability Initiatives” by Ethical Corporation Magazine. | 8 | |
Waste Reduction (Haz & Non) | H&M monitor toxics use and wastewater in production. Trains store employees on proper disposal of waste and hazardous materials. | 6 | |
Environment – Materials | |||
Use of Toxics in Products | Chemical restrictions policy, last updated 2005. 170 chemicals or categories of chem. are restricted. Examples: cadmium, lead and mercury, certain dyes, PVC, formaldehyde and brominated flame retardants. Regular testing is carried out at external laboratories to ensure that suppliers comply with the chemical restrictions. | 4 | |
Use and Promotion Of Sustainable Materials (i.e. organic cotton) | Uses and promotes the use of organic cotton; works to reduce impact of conventional cotton. The goal for 2007 is to use at least 100 tons of organic cotton. Member of Organic Exchange and Better Cotton Initiative. | 6 | |
Social | |||
Workplace Diversity | H&M currently formulating policies on diversity and equality. Statement on website: “We aim to be a responsible employer in all countries even where the laws and regulations do not match our own requirements.” | 3 | |
Unions | No official statement on Unions. The company has been accused of anti-union actions by the AFL-CIO. but has also been praised by labor leaders for its handling of a unionization effort by employees in | 3 | |
Workplace Safety | Included in Supplier Code of Conduct. | 4 | |
Community Relations | Very active locally and internationally. | 7 | |
Strategic Partnerships with NGOs | Many training initiatives with local NGOS; Also partners with large organizations like UNICEF, Make a Wish Foundation. | 7 | |
Animal Welfare | No specific policy; However, recently committed to stop buying merino wool taken from sheep in | 3 | |
Human Rights | |||
Operating in Countries of Conflict | Do not source or operate in countries of conflict. | 4 | |
Child Labor | Strong policy for dealing with infractions (but one that does not immediately abandon the factor/children in question). | 5 | |
Forced Overtime | Not allowed under Code of Conduct. H&M is very cognizant of the impact is has on manufacturer’s with its ordering cycles, Works not to submit last-minute orders or changes to orders. | 4 | |
Indentured Servitude | Not allowed under Code of Conduct. | 4 | |
Compliance with ILO Standards? | H&M’s Code of Conduct for Suppliers is based on the ILO Conventions (and is based on the UN Convention on the Rights of the Child). | n/a | |
UN Global Compact? | Yes, supports the Compact. | n/a | |
Supplier Management Issues | |||
Code of Conduct | Yes; Enforced; H&M provides limited training to suppliers. | 5 | |
Fair Wages | No policy stated specifically. Works with suppliers to make sure an appropriate wage is paid. Has been criticized for allowing suppliers to pay very low wages. | 3 | |
Training | Focuses on Training to improve working conditions and livelihoods for employees. | 4 | |
Environmental Management | Environmental management targets are included in Supplied Code of Conduct; require wastewater testing from suppliers; work with suppliers that work with dyes to reduce impacts on the environment. | 5 | |
External Verification | |||
Member of | Yes, as of 2005. | n/a | |
CSR Reporting Standard? | Yes. Starting with the 2007 CSR report, will be reported in accordance with the Global Reporting Initiative’s updated guidelines for sustainability reporting. | n/a | |
Other | Included in a no. of sustainability indices, including the Dow Jones Sustainability World (DJSE World), FTSE4Good and the Ethical Sustainability Index. Clear performance targets - with responsible parties noted- available publicly. | n/a | |
Demonstrated CSR Leadership Among Peers? | Yes. (Bonus Point) |
H&M - Summary
Although H&M is overall a leader in the fashion apparel sector on corporate social responsibility (CSR) issues, their 100% outsourcing of production (they have no factories of their own) presents problems in monitoring and enforcement of CSR commitments. After being criticized by activists in the late 1990s for the the company's lack of attention to labor rights in its supply chain (including a controversial expose on Swedish television), H&M began to actively respond through, among other things, developing a Code of Conduct for its suppliers and a compliance program. However, the company is still targeted for the low wages paid by some of its suppliers and was recently accused of anti-union activities by the AFL-CIO (although, in the end, the company received praise for allowing the workers to organize.)
In 2005, H&M stiffened its CSR inspections among its suppliers by increasing interviews with workers and introducing extra measures to ensure documentation such as time sheets and wage records were correct. The company also improved training for its 40-plus supplier auditing team. In 2006, while implementing this new, more detailed auditing program, H&M uncovered an increase in document forgery and abuses of child labor laws among many of its suppliers.
Some Key Facts:
- H&M is an apparel and cosmetics company headquartered in Sweden, where it was started in 1947.
- H&M sells clothes and cosmetics in approximately 1,500 stores in 28 countries, has approximately 20 production offices around the world, and more than 60,000 employees.
- H&M does not have any factories of its own, but instead works with around 700 independent suppliers in primarily Asia and Europe.
- The retailer sources more than 60% of its products in Asia, more than half of which come from China.
- The company is controlled by the family of Chairman Stefan Persson (the billionaire son of founder Erling Persson); they own nearly 37%.