Why Footwear Trails Apparel When it Comes to Sustainable Supply Chains

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Photo credit: Change Your Shoes

Though apparel has made greater strides of late toward advancing supply chain sustainability, footwear has been a step behind, and Change Your Shoes is working to point out the sector’s flaws and suggest better practices for a more ethical industry.

In a new report, “How to Do Better: an exploration of better practices within the footwear industry,” the coalition of organizations funded by the European Commission with the collective goal of improving conditions in footwear supply chains, said structural problems and “inherently poor practices” have plagued the shoe sector and that the industry needs to take “urgent action” to improve working conditions and sustainability in footwear supply chains.

“While the garment industry has been a focus for global campaigning and has seen the creation of numerous initiatives aimed at increasing standards, the footwear sector still lags in the adoption of better and more rigorous practices,” the report noted. “Generally, shoe brands also lag behind other industries in terms of the transparency of the supply chain—even within the so-called ethical shoe brands.”

Shoe issues at a glance

More than 23 billion pairs of shoes were produced globally in 2016, according to the report, and 87 percent of those shoes were made in Asia—two-thirds of which came from China. Looking at leather shoes in particular, 40 percent are produced in China, followed by Italy and Mexico each making 6 percent, and Brazil and India at 4 percent each.

That said, however, the report noted that despite Asia dominating footwear production, manufacturing for domestic consumption is robust in Europe, where 90 percent of what’s made there is also consumed there.

Regardless of what Europe makes for itself, the region still relies on Asia when it wants to cut costs.

“Footwear is a labor-intensive product involving a considerable amount of manual low-skilled work. For this reason, many European footwear brands outsource all or part of the manufacturing to countries where wages are low and the regulatory environment lax,” the report noted. “In general, these countries offer weak environmental rules as well, which benefits cheap leather production, a core part of the leather shoes supply chain.”

Purchasing strategies have also posed problems in footwear supply chains. The pressure to reduce costs, has, as in the apparel industry, led to lower wages and wage or working hours violations.

“To ensure that working conditions improve—alongside health and safety standards—it is crucial that suppliers are adequately compensated for the costs involved in meeting compliance demands,” according to the report. “This requires that pricing practices do not prevent suppliers from being decent employers.”

Put simply, Change Your Shoes says footwear companies must intensify their efforts to assess supply chain risks and ensure things like paying a living wage—or at the very least, working in countries where there’s an established and enforced legal minimum wage—workplace safety and transparency are ensured.

Brands embracing ‘better’ practices

Companies that have undertaken efforts to make their supply chains more sustainable are typically focused on things like more sustainable materials, minimalism and making it their overall company mission.

Highlighting German footwear company Ethletic Sneakers, Change Your Shoes points out that the firm is using PETA approved vegan materials, organic cotton and natural rubber for soles that comes from Sri Lankan rubber tree plantations certified by the Forest Stewardship Council. Ethletic also says it pays a 15 percent Fairtrade premium on the product price, which it allocates to social projects for workers, and some of its supply partners are disclosed on its site, though exact factory names and locations aren’t always clear.

“While we welcome the payment of additional money to the factory and rubber plantation, the approach of using an additional premium to be used in social projects as a way to meet the needs of workers such as health insurance, education of children and ability to save could be achieved instead by paying a living wage to the workers,” Change Your Shoes said. “This could be a future direction for improvement and development.”

At companies like Veja, a French athletic shoe brand sourcing and manufacturing in Brazil, fair trade has been a focus. The company uses materials like wild natural rubber, organic cotton and vegetable tanned leather in its footwear production, though the report purports the company may not be entirely as ethical as it claims—or believes itself—to be.

“The company states that vegetable tanned leather can have negative environmental or social impacts and it admits also that it is not fully aware of the entire supply chain of the leather used in their shoes,” Change Your Shoes said. “Further investigation and positive changes in tanning by Veja would be a significant improvement.”

For Sole Rebels in Ethiopia, the focus has been on its efforts to provide better conditions for its workers, like providing transportation, medical care and paying more than other producers for the same work.

However, as Change Your Shoes points out, “No information on the exact amount is given and there is no national legal minimum wage in Ethiopia.”

Necessary steps

Though some companies are improving the conditions of their supply chains, among the most striking findings, according to Change Your Shoes, was the lack of holistic approaches among smaller brands. From there, the report found that levels of transparency were surprisingly low, even for companies branding themselves as ethical and transparent.

“Most [companies] rely on the good faith of consumers to trust their claims,” Change Your Shoes said. “While their claims are laudable, they do not show a proper appreciation of the need for transparency and the issues that arise in any supply chain.”

Good faith has also spelled bad news for brands in cases when it becomes apparent that sustainability and ethical claims are little more than claims—and that’s not a risk brands interested in garnering consumer loyalty and surviving in a trying retail environment should be willing to take.

What’s more, according to the report, new demands at retail mean new demands on supply chains, and one of those demands that carries through is the need for greater transparency and better treatment of workers—the two key areas of focus necessary to improve conditions in the footwear space.

“Changes are needed to ensure meaningful due diligence by companies. Without behaviour that supports change on the ground by producers – such as increased lead times, fairer pricing systems ensuring fair working conditions and living wages – there will be little improvement for the vast majority of workers and their families”, says Stefan Grasgruber-Kerl of Change your Shoes.

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