25 March 2019

Brands back new Bangladesh factory safety scheme

More than 20 brands and retailers including The Children's Place, Walmart, VF Corp, Nordstrom, Target, Macy's, JC Penney, Gap Inc and Abercrombie & Fitch are backing a new voluntary programme tasked with overseeing ongoing safety efforts in Bangladesh ready-made garment factories.

The new Dhaka-based body is called Nirapon and will monitor 600 factories from which its member brands source. Its aim is to verify that suppliers continue to meet structural, fire, and electrical safety standards; have implemented worker safety training programmes; and make the Amader Kotha helpline service available to factory workers.

While Nirapon will serve as a single point of contact between its members and the factories, it is not a regulatory agency and will not publicly identify factories that are failing to meet performance standards or recommend factories for closure. This, it says, is one of its key points of difference with the Alliance for Bangladesh Worker Safety and the Accord on Fire and Building Safety in Bangladesh – the two five-year initiatives launched following the Rana Plaza factory building collapse in 2013.

Most of its member companies are former members of the Alliance, which was wound down at the end of 2018.

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25 March 2019

US removes Uzbekistan cotton from child labour list

The United States has removed Uzbekistan cotton from a list of products that may have been produced by forced or child labour.

The decision by the Department of Labor (DoL) follows an extensive review since last summer, during which DoL, the Department of State, and the Department of Homeland Security considered a raft of public comments before making their final ruling.

Uzbek cotton was added to the Executive Order No. 13126 (EO 13126) list in 2010. Its removal now paves the way for US government agencies to purchase products made from the raw material without requiring certification that they have been produced without the use of child or forced labour.

However, more than 300 brands and retailers, including Adidas, H&M and Fruit of the Loom remain committed to eliminating Uzbek cotton from their supply chains over forced labour concerns.

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21 March 2019

Store closures and bankruptcies weigh on Li & Fung FY

Hong Kong based sourcing giant Li & Fung says a rapidly changing retail landscape with record levels of store closures and customer bankruptcies took a toll on its last financial year, with core operating profit down by 20%.

In a trading update for the 12 months to 31 December 2018, the Hong-Kong based supply chain solutions provider posted a 26.2% drop in profit to $126m. Turnover was down 6.2% to $12.7bn, mainly due to customers' ongoing destocking, customer turnover and bankruptcies

Core operating profit dropped 20% to $285m, due largely to the lower turnover and total margin in the Supply Chain Solutions business, as well as continued investment in digitalisation in line with the company's long-term strategic plan to build a speed-enabled ‘Supply Chain of the Future’. This has also helped customers reduce their inventory levels.

A bright spot in its performance was the group’s logistics business, where turnover and core operating profit increased 10.2% and 14.6% to $1.13bn and $86m respectively. Li & Fung is now preparing for the potential spin off and separate listing of LF Logistics in 2019.

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20 March 2019

Traceability tool being developed for garment supply chains

A tool to enable greater traceability in garment supply chains is being developed by the UN Economic Commission for Europe (UNECE), the European Commission (EC), the International Labour Organization (ILO), the International Trade Centre (ITC) and private sector partners.

The ‘Decent Work and Transparency and Traceability Tool’ aims to help the apparel sector make risk-informed decisions and operate according to a set of internationally agreed practices – ultimately gearing it for more responsible production and consumption patterns.

The tool will include a Policy Recommendation to enable governments to advance the necessary policy approaches, and a comprehensive Technical Global Standard for the Traceability of Sustainable Value Chains, covering the entire life-cycle of products.

The project, funded by the European Union, is to be implemented by 2021.

It comes after a survey of 100 global brands and retailers carried out by the UNECE found more than 65% of companies believe traceability helps build trust with consumers; develop more solid networks with clients and suppliers, and identify opportunities for efficient and sustainable management of resources. Yet despite this, only 34% of companies have traceability systems in place.

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20 March 2019

H&M to phase out conventional cashmere

Swedish fashion retailer H&M is phasing out conventional cashmere as part of its goal to only use sustainably sourced materials by 2030, and will stop placing orders for the virgin fibre at the end of next year.

Cashmere wool, usually simply known as cashmere, is obtained from cashmere, pashmina and other types of goat. But while popular for its soft texture and high quality, it comes with both environmental and animal welfare challenges – in particular, the unsustainable levels of cashmere goats grazing the Tibetan plateau in Mongolia and northern India leading to desertification and lack of food for wild animals.

"We will continue to work for a more transparent supply chain, where cashmere is sourced from sustainable sources that are independently certified by standards that cover both animal welfare and environmental aspects,” the retailer says, adding: “If the cashmere industry in the future would meet our sustainability criteria, we could consider turning to virgin cashmere again.”

H&M says 57% of all materials used by the group are now recycled or sustainably sourced, up from 35% a year earlier. It was recently named by Textile Exchange as the biggest user of preferred cotton in the world, and the second biggest user of recycled and organic cotton.

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19 March 2019

Levi Strauss raises more than US$623m in IPO

US-based jeans giant Levi Strauss & Co has raised more than US$623m in its initial public offering (IPO) after selling 36.7m shares priced at $17. The move values the company at $6.6bn, and marks its return to public markets for the first time since 1985.

The San Francisco-based firm designs and sells apparel under the Levi's, Dockers and Denizen brands, operating about 2,900 of its own stores as well as selling its products in retail locations around the world.

It reported a 14% rise in revenues to $5.58bn for the year ended 28 November 2018, while net income was flat at $283.1m. Levi Strauss plans to use the proceeds from the IPO to grow its market share with women, on the internet and in China.

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14 March 2019

UN launches Alliance on Sustainable Fashion

The United Nations (UN) has officially launched the 'UN Alliance on Sustainable Fashion' to create an industry-wide push for action to reduce fashion's negative social, economic and environmental impacts.

The Alliance launched at the UN Environment Assembly in Nairobi, Kenya. It aims to improve collaboration between UN agencies by analysing their efforts to make fashion sustainable, identifying solutions and gaps in their actions, and presenting these findings to governments to trigger policy development.

Currently, the Food and Agricultural Organization is promoting Blue Fashion, which uses sustainable marine materials and protects arable land; the International Trade Centre has set-up the Ethical Fashion Initiative to spotlight artisans from the developing world; and UN Environment is pushing governments to foster sustainable manufacturing practices.

"In the face of growing environmental threats, there is an urgent need to radically change our consumption and production systems," says Naoko Ishii, CEO and chairperson of the global environment facility. "In this regard, a more sustainable fashion industry has a critical role to play."

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