Subject Submission Date Class Team Members CSR cross-analyses on fashion Industry Tuesday 15, 2012 MBA Pudong – Corporate Social Responsibility Christiane Pagsisihan Damien Dandelot Jose Antonio Mallen Tendai Chitapi Vera Boisa Harbhajan Khalsa
The research paper trough four main Corporate Social Responsibilities (CSR) issues (Children Labor, Working condition, Environmental impact and Environmental Sustainability) indicates several glaring trends within the fashion industry. First of all, there appears to be an overall evolution in the CSR practice and actives during the last decade in the fashion industry. Moreover, it seems evident that CSR is more and more considered as important issues in the fashion industries whatever the specification and the market are. Finally, after having make a close comparison between six fashion companies, it seems that if companies continue to develop its CSR actions in activities such as eco-friendly ingredient sourcing, fair pricing, eco-manufacturing, and efficient non-wasteful distribution, as well as corporate sponsorship, they will result competitive advantage. Indeed, with the implementation of CSR initiatives brands build a positive image and then are more able to counter criticism for other issues that may affect the company.
Over the last decade, corporate social responsibility has moved to the forefront of consumers’ minds and has elicited numerous responses on the part of the fashion industry. It should not come as a surprise given that it encompasses the design, manufacturing, distribution, marketing, retailing, advertising, and promotion of all types of apparel (men’s, women’s, and children’s) from the most rarefied and expensive haute couture (literally, “high sewing”) and designer fashions to ordinary everyday clothing (Encyclopedia Britannica, 2012). Within the industry there are different kinds of activities, such as model agencies, creative agencies, media specialized in fashion (i.e. Fashion TV) and textiles etc. According to Market Line Report, Global Textiles, Apparel & Luxury Goods (2012), the global textiles, apparel and luxury goods market (men, women and children clothing, textiles, footwear and luxury goods) had total revenues of about $3 trillion in 2011, representing a Compound Annual Growth Rate (CAGR) of 3.7% for the period 2007-2011. The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.2% for the five-year period 2011-2016, which is expected to drive the market to a value of more $3.5 trillion by the end of 2016. Put simply, the fashion industry is a huge sector and thus deserves a closer examination as to the human rights and environmental impacts. Due to the fact that the industry encompasses a myriad of companies, we have selected six companies established in China (Table 1 and Exhibits 1 to 6). Indeed, in China, the textile and clothing industry is the largest
Fashion Industry China: CSR Case – Team 7 MBA Pudong
manufacturing industry. There are about 24,000 enterprises that employ 8 million workers. In addition, China is the largest clothing producer in the world, and has the largest production capacity for textile mill products consisting of cotton and silk (Qiu, 2005). Table 1 – General description of the six companies selected (data from 2011) Company Inditex SA H&M Gap Inc. Levi's Hermes LVMH HQ Spain Sweden USA USA France France Market Mid to low income Mid to low income Mid to upper income Mid to upper income Higher income Higher income Total revenue (billion) $ 17.53 $ 15.1 $ 14.55 $ 4.8 $ 4.8 $ 30.08 Net Profit (billion) $ 2.45 $ 2.76 $ .83 $ 0.14 $ 1.12 $ 3.81 Number of Stores 5,527 2,325 3250 470 283 3095 Number of Markets 82 43 44 110 57 60 Number of Employees worldwide 109,512 59,440 132,000 17,000 8370 98,000
CSR issues relevant to the fashion industry
Then, before moving on, the major CSR issues in the fashion...