Key points:
- Fashion brands with an established commitment to ethical trading were more resilient to pandemic, according on research into the impact of Covid-19 on the Indian fashion sector.
- Where brands and their suppliers had stronger existing relationships, there was a sense of empathy, which improved their relationships and ability to address challenges.
- The impact of Covid-19 on brands and their suppliers was not evenly felt across all tiers of fashion supply chains and affected different parts at different times.
- Unpredictable demand was suspected of contributing to increased likelihood of unauthorised subcontracting, with its associated risks of unethical practices.
Fashion brands which had long-term commitment to ethical trading practices embedded across their business tended to be more resilient to the impacts of the Covid-19 pandemic, according to research published today.
The study, funded and published by the Modern Slavery and Human Rights Policy and Evidence Centre (Modern Slavery PEC), is a result of research carried out by the University of Leeds and Goa Institute of Management into the management of modern slavery risks in Indian fashion supply chains during the Covid-19 pandemic. The analysis was underpinned by baseline data gathered across Indian fashion supply chains prior to the pandemic.
The research found that Covid-19 had a strong impact on all tiers of supply chains in the sector, however, it was not evenly felt across all tiers and affected different parts of supply chains at different times.
Brands, suppliers and others working in Indian fashion supply chains interviewed by the researchers often blamed unpredictable demand for an increased likelihood of unauthorised subcontracting, with its associated risks of unethical practices, on top of the direct impacts of Covid-19 on the supply chains such as job losses and pay cuts.
However, the research points to a strong link between the brands’ long-term commitment to ethical trading and better resilience to the impacts of the pandemic.
Brands that had dedicated teams working with suppliers and in-country ethical personnel were able to develop stronger relationships with their suppliers, which proved important in attempts to deal with the loss of sales, reduced turnover and challenges with managing staff. Well established ethical trading teams proved to be crucial in that regard.
This means that brands more committed to ethical trading, including those expressing more positive strategic and operational engagement with the UK Modern Slavery Act, not only were able to protect people working across their supply chains more effectively, but also that brands themselves were more resilient to the effects of the pandemic.
Dr Mark Sumner from University of Leeds, who led the research, said:
“Covid-19 highlighted the importance of ethical trading practices for fashion brands. Our research shows that those brands which had expressed a stronger commitment to them prior to the pandemic were better equipped to deal with the crisis rippling through their supply chains.
“The brands that had stronger relationships with their suppliers found it easier to come up with solutions beneficial to both sides, and ultimately workers.”
Prof. Divya Singhal from Goa Institute of Management, who led the research in India, said:
“Our interviews with participants from buyers and suppliers highlighted that the pandemic was different from previous global crises. Its impacts appeared similar on both buyers and suppliers, creating a sense of a joint experience. This joint experience resulted in empathy and resilience.”
Prof Alex Balch, Director of Research at the Modern Slavery PEC, which commissioned the research, said:
“It’s clear from existing research that businesses with more developed ethical approaches are better equipped to protect people from exploitation across their supply chains. But this research provides clear evidence that it’s also good for businesses themselves.
“Covid-19 has worsened people’s vulnerability to forced labour in the global economy and highlighted the fragility of many supply chains. The pandemic showed us that more transparent and resilient supply chains are better for business and better for workers”, he added.
"The pandemic showed us that more transparent and resilient supply chains are better for business and better for workers"
Prof Alex Balch, Director of Research at the Modern Slavery PEC
The research found that where brands and their suppliers had stronger existing relationships, they both could better identify common challenges and meet the uncertainties created by the pandemic with greater mutual empathy, understanding and respect.
This contributed to improving their relationships, which in turn allowed them negotiate solutions that were beneficial for both the brands and their suppliers, as the suppliers felt a trusted part of the discussion.
Dr Sumner said:
“As the pandemic was an unprecedented crisis, many brands struggled to understand what was going on in their supply chains. But those with established ethical trade teams tended to understand the impacts of the pandemic better and were therefore better able to mitigate those impacts.
Prof Balch, added:
“Despite overall huge negative impact, the pandemic also confronted businesses with the need to make their supply chains more visible, which in turn can lead to an increased awareness of exploitation within them.
“This research shows that addressing exploitation in their supply chains and making their own business perform better can go hand in hand.”
