Ethical fashion: working towards workers' wellbeing

Looking after people is the most important thing we can do.

We’re committed to protecting human rights and proactively improving the wellbeing and working conditions for workers throughout our supply chain. To achieve this, we’ve evolved our approach to focus on transparency and partnerships, both working together to improve our ethical fashion initiatives. 

 


Worker wellbeing in 2019

Each year, Kathmandu participates in the Ethical Fashion Report produced by Baptist World Aid Australia and Tearfund New Zealand, which work towards ethical fashion in Australia and New Zealand. 


The Ethical Fashion Report grades fashion companies on ethical practices in their supply chains, giving consumers the power to shop ethically and use their voice to encourage greater transparency. It's a practical tool that can be used to reduce worker exploitation and alleviate poverty in developing countries where clothes are manufactured.

Companies are assessed at three critical stages of the supply chain:

1. Raw materials

2. Inputs production

3. Final stage production

In 2019, in addition to the four established areas of grading in the report (policies, transparency and traceability, auditing and supplier relationships, and worker employment), Tearfund added a fifth grading criterion: environmental management.

The report scores companies on the levels of visibility and transparency across their supply chain with regards to policies, transparency and traceability, auditing and supplier relationships, worker empowerment and environmental management.

For the second year in a row, Kathmandu scored an 'A' in 2019. 

The report noted the improvements we have made in transparency by publishing our complete list of suppliers (below) so our customers know exactly where their products are made.

The Ethical Fashion Guide further highlighted as best practice the steps we have taken to ensure that workers have a greater voice by improving the grievance mechanisms available to those working in our supply chain.

Kathmandu Corporate Social Response-ability Manager, Gary Shaw, says the report helps raise the bar on human rights in the supply chain. 

"Companies are competitive by nature. Now, instead of trying to be the best in the world, they're competing to be the best for the world. Like the Modern Slavery Act, the Ethical Fashion Report invites companies to become more aware of their supply chain and the impact they have on the world."

What does this mean for workers? The FLA audits and verifies our social compliance program to ensure that we are promoting and complying with international labor standards and best practices throughout our supply chain.

Our efforts are independently verified and assessed on the basis of fulfilling all of the principles of fair labour and responsible sourcing.

The FLA have completed social compliance initiatives and assessments at several of our factories. Their reports on Kathmandu facilities can be read on the FLA website.

The FLA also offers tools and resources to help companies better protect and empower their workers — including training to factory workers and management. The FLA works with companies to advocates for greater accountability and transparency throughout global supply chains.

Our goal is to set the standard for companies in Australia and New Zealand to champion ethical fashion principles, which are based on workers’ wellbeing, safety, and empowerment.

In 2018, U.S. specialist hiking and outdoor shoe brand, Oboz, joined the Kathmandu family.  

Oboz already undertakes considerable efforts towards ethical fashion: 

1. Oboz donates unsold but trail-worthy shoes in partnership with Project Sole and non-profits. 

2. They also offset their carbon for all shipments, employee travel, and office utilities. 

3. 100% of the company headquarters' electricity is wind-generated. 

In 2019, Kathmandu Corporate Social Response-ability Manager, Gary Shaw, spent time with the team at Oboz, sharing his own approach to supply management and transparency. 

"It was great to have Gary and his knowledge to partner with us on this very important topic," says Oboz CEO Amy Beck. "We are in the process of building our CSR and sustainability road map. By working with the Kathmandu team and their processes, standards, and training, this will be an area of focus and priority for our teams and partners." 

Our responsibility

In many countries, the laws that protect and empower workers are not adequate or are simply not enforced. As a result, it’s critical for us to communicate the standards we expect of our suppliers and to have a system in place to make sure those standards are met.

We aim to work in partnership with our suppliers to facilitate ongoing improvements in the pursuit of ethical fashion principles, benefitting both their workers and their business performance. These are just some of the measures we have in place:

Our Workplace Code of Conduct is based on the International Labour Organisation’s standards and on internationally accepted good labour practices.

The code outlines what we expect from our suppliers including working hours, safe working conditions and explains what sufficient compensation looks like. It also includes the environmental standards we expect suppliers to meet. All of our manufacturing partners must sign up to our Code of Conduct before we’ll do business with them.

Our comprehensive and ongoing social compliance program encourages greater adherence to our standards and encourages suppliers to take greater ownership of their own changes and improvements.

Please see our Code of Conduct for different languages below:

Code of Conduct (Chinese)

Code of Conduct (Indonesian)

Code of Conduct (Italian)

Code of Conduct (Nepali)

Code of Conduct (Spanish)

Code of Conduct (Vietnamese)

 

Our social compliance program aims to protect and enhance the wellbeing of the workers in our global supply chain. Our program is carefully designed to respond to the uniqueness of each culture, country and supplier.

This tailored approach is based upon a combination of risk and influence — the risk a particular supplier poses to their workers and ourselves, and the influence we have to effect change. The segmentation of our supply chain allows us to improve the capacity of our partners and the workplace conditions of our workers.

The limitations of factory audits

Until recently, factory audits were the tool we used to make sure suppliers were providing safe working conditions and fair pay to workers through our Code of Conduct. Audits are typically the main method that companies around the world use to measure conditions in their supply chain.

But over the course of several decades it is clear that, on their own, audits have limitations:

  • They can promote a game of cat and mouse between the auditors and the suppliers
  • The audit is not designed to identify or address the root causes of issues or prevent them from occurring again
  • Audits are not always able to unearth severe violations such as systemic corruption, sexual harassment, bullying and other forms of exploitation and abuse
  • When several companies send auditors to the same facility, it can put further strain on the factories and can hamper progress.

Addressing the issues

Our greatest challenge is to understand how our suppliers see the world and how we can cooperate together to improve conditions and wellbeing for their workers. We believe with the right attitude and a willingness to learn and change, suppliers can rapidly improve their practices. We seek to:

Facilitate a better understanding.

It’s imperative we understand the culture and local laws of the country where our suppliers are based. Only then can we effectively seek greater compliance with their own laws, as well as with our own code of conduct and standards.

Collaborate in partnership with the apparel industry.

Kathmandu is a signatory to the Social and Labour Convergence Project, an industry collaboration to create a standard assessment tool to minimise the strain on factories. Created by the Sustainable Apparel Coalition, this is a great example that encourages and facilitates greater cooperation across the apparel industry.

We’re also working in partnership with other international brands to both share and conduct audits when they share our values and meet our standards for ethical fashion. 

Image of a factory worker in VietnamImage of a factory worker in Vietnam

Supply chain transparency

Transparency is not just one of our core values, it’s the cornerstone of responsible business conduct.

We believe that publishing supply chain information builds the trust of workers, consumers, labour advocates, and investors, and sends a strong message that we don’t fear accountability.

Kathmandu has published a list of Tier 1 suppliers and those factories making our products.

Tier 1 are our primary suppliers who hold a direct contractual sourcing relationship for the supply of Kathmandu branded products. The list includes the name of our suppliers, the name and address of the factories we utilise, the kind of product made there, and the number of employed workers.

The list of factories accounts for 100% of Kathmandu apparel, footwear, packs and bags, sleeping bags and tents, and represents approximately 90% of Kathmandu total spend.

Corporate Social Response-ability Manager at Kathmandu, Gar Shaw, says this move creates greater transparency and accountability. 

"In the past, many brands saw this as a risk. But today, it's best practice. It means that, if someone finds human rights violations in our supply chain, we want people to be able to track us down and let us know about it. We are not about self-protection. We are about collaboration and doing the best for the world."

The recently launched Open Apparel Registry (OAR) is a database of apparel facilities that uses Google’s geocoding to identify yarn and fabric mills, textile dye houses and finishers, as well as garment manufacturing facilities worldwide. 

This new, free-to-use tool, creates a common and standardised resource of facility names and addresses and is the first AI-based name-and-address matching system for the textile and apparel industries with over 65,000 suppliers already listed. 

The OAR is designed to be an open, crowdsourced database of apparel facilities around the world. It creates one common and standardized resource of facility names and addresses, it eliminates issues with matching across multiple, inconsistent databases and it facilitates in-factory collaboration between organizations. 

Filter using “Kathmandu” and view the exact locations of our apparel facilities. 

Our supplier stastics 2019Our supplier stastics 2019

Giving workers a voice

One vital tool we use to understand worker concerns in our supply chain is Laborlink, an anonymous confidential survey tool that workers can complete with their own mobile phones. 

This tool allows workers to communicate issues such as compromised safety or workplace harassment without fear of retribution from their employers. While the traditional audit process does include interviews with workers, they rarely result in many complaints. This is sometimes driven by a cultural expectation to stay silent about their concerns in misplaced loyalty to their employer. 

Gary Shaw, Kathmandu's Corporate Social Response-ability Manager, has seen immediate results from using Laborlink. 

"We did an audit this year on one of our new suppliers that came back almost perfect, with a score of 93%. However, in the anonymous Laborlink survey, 58% of workers reported that their supervisors often or sometimes yell at them. So the workers' wellbeing is still being impacted and that is a concern."

What comes after we receive this kind of feedback? 

"We'll ask if factory managers recognise the issues involved and are equipped to address them," says Gary Shaw. "If not, we'll invite them to work with ELEVATE to change the culture of their workplaces. 

"We don't expect or anticipate perfection. What we do require is honest transparent communication so we can work on these issues together. This is how we create change."

Image of the factory floor and workers in VietnamImage of the factory floor and workers in Vietnam

Sustainable wages in our supply chains

Kathmandu has a robust factory assessment and monitoring program. This ensures that those who make our gear are being paid the legally required minimum wage. While this is a very positive step in the right direction, we know that the majority of workers in our supply chain earn less than what we would consider a fair living wage relative to their country. 

Like most of the human rights challenges in our supply chain, Kathmandu cannot facilitate the positive changes we would like to see in the world by acting alone and in isolation. Instead, we have chosen to work collaboratively with other global brands and in partnership with the Fair Labor Association (FLA) in pursuit of finding solutions for helping to shape a truly ethical fashion industry. 

 

Human rights is not something we reluctantly feel obligated to consider as a necessary business risk. It’s our number one material issue reflecting the very heart of our values and brand.

Xavier Simonet, CEO Kathmandu

Did you know that there are more people in slavery now than at any other time in human history? It’s estimated that 40.3 million people are trapped or working against their will.

75% of modern slaves are found in global supply chains. This form of slavery is often in the form of debt bondage or debt slavery. This is when a person is forced to work to pay off a debt.

The 2018 Global Slavery Index found 36 countries were taking steps to investigate forced labour in business or public supply chains, up from just four countries in 2016. Australia was one of them. The Modern Slavery Act was passed by the Australian Government in October 2018. From 1 July 2019, companies with revenues of AU$100 million or more are required to track the risks in their supply chains. From 1 July 2020, these companies will be required to report their risks and what they are doing about it.

Kathmandu Corporate Social Response-ability Manager Gary Shaw says the legislation is a big step forward for reducing slavery.

“Allowing businesses to discuss slavery risks in the open without fear of shame or criticism will allow for the collaboration necessary to shut it down.”

Working for eight years across thirteen countries as a human rights investigator, Gary has seen the effects of modern slavery on the communities in which it is rife. 

"Right now, less than two per cent of people in slavery are liberated and their perpetrators held accountable. This rate shows that governments and NGOs working on this problem are not going to address this issue without the help of the private sector."

For Kathmandu, this means ensuring our supply chain is transparent and that our workers have a voice. We work in partnership with our suppliers and in collaboration with other brands to proactively address such risks. 

A living wage is a fair and decent wage, given the country, region and community where the workers live. A living wage covers the basic necessities for life in the form of food, water, housing, healthcare, education, clothing, transportation and childcare.

There are as many different definitions of what constitutes a living wage as there are organisations trying to deliver one and there is no universal living-wage calculator.

There is also not a fair and effective means to translate what constitutes a living wage in one country to another.

Governments, businesses and the non-profit sector have been working hard for many years to regulate working conditions and worker hours, raise minimum wages and identify sustainable solutions for getting workers out of poverty.

Despite this many workers within the wider apparel industry remain vulnerable to unfair wages, heavy workloads and various forms of exploitation and abuse.

The Fair Labor Association is collecting wage data worldwide and as an FLA accredited business, Kathmandu is participating in this process, compiling such data from some of our Strategic and Core Suppliers. This data is being collated by the FLA to establish living wage benchmarks against which we can then compare our own wage levels and publically report on our progress. We will use this information to make better supplier decisions and partner with factories that are committed to our goal to provide a living wage to all workers making our products.

Kathmandu exists to inspire travel and adventure in everyone – which includes those working in our supply chain. We don’t have all the answers when it comes to implementing a living wage. But we do know that conducting good business is an essential part of the journey toward empowering all people and influencing positive social change.

Image of a male factory worker in VietnamImage of a male factory worker in Vietnam

How we measure performance

To measure our performance on human rights in the supply chain, we’re now using the ground-breaking self-assessment tool, the HIGG Index.

"The Higg Index empowers organisations at any stage of their sustainability journey to reduce their environmental impacts and strengthen the communities where they operate," says Jason Kibbey, CEO of Sustainable Apparel Coalition. 

We’ve assessed our work using the detailed questionnaire in the HIGG’s Social/Labour Management Performance Module. This scoring criterion reinforces and guides those areas that are most important for us to focus on each year.

Head to our Sustainability hub to learn more about how Kathmandu is making a positive social and environmental impact. 

If you have suggestions or feedback on improving worker’s rights, please contact our Corporate Social Responsibility team.