Is legislation necessary for supply chain transparency?

The need for clothing brands and retailers to be more open about their supply chains has become clear over the years, but according to GlobalData it may take more than voluntary action. In a press release, the company announces that legislation may be the answer.

Following disasters such as the collapse of Rana Plaza in Bangladesh, an increasing number of fashion companies such as Nike, Levi's and Adidas have become more transparent.

"Publication of supply chain information not only builds confidence among consumers, but also among workers and labour rights defenders. It also signals that a company is concerned about the labor practices of its suppliers," said Michelle Russell, Apparel correspondent for GlobalData in the press release.

However, research shows that voluntary action is not enough. Fashion's Next Trend: Accelerating Supply Chain Transparency in the Garment and Footwear Industry', a report published this week by a coalition of trade unions, human rights groups and labour rights advocates, shows that while brands and retailers have 'dramatically' improved their supply chains, more can be done. For example, legislation requiring companies to carry out thorough research into human rights in their supply chains could help.

"Complete openness is difficult to achieve with purely voluntary action," says Russell. "Implementation would take time, but with the help of coalitions, it could succeed."