Women working from home stitching garments or shoes for a few pence a day form the backbone of production for many well-known Western clothing and footwear brands. Doing this kind of low-paid piece work from home is a common occurrence in countries like India, China, Bangladesh and Pakistan but it also occurs in European countries such as Turkey and Bulgaria.
The garment industry exemplifies the challenges of modern global manufacturing: "flexible" contracts (or no contracts at all) for workers, poor working conditions and low wages - women in India earn between 20 and 30 Rupees a day, equivalent to 20-30 pence.
Homeworking in the Indian fashion and textile industries presents investors with many challenges; homeworkers are subject to various forms of exploitation, and the informal nature of the supply chain in which they operate makes their working conditions invisible to external audits that typically only extend to the first or second tier of a supply chain. At the same time, the items produced by homeworkers are relied upon by the manufacturers of global brands. To put things into context, the value of the global fast fashion market is expected to grow from $25.2 billion in 2020 to $30.6 billion in 2021 and is expected to reach $39.8 billion in 2025.
Along with representatives of Alliance Manchester Business School, Incudeas Ltd, and Traidcraft Exchange, I recently contributed to a well-attended webinar entitled “Fashion's Forgotten Workers: Risk to Resilience with Tech-Enabled Solutions” which examined home working in India and spoke to industry participants. The event also previewed a report published by The Alan Turing Institute, the national institute for data science and artificial intelligence, which looks at how homeworkers might be supported through both digital technology and collectivisation.
Watch the video to see Castefield's segment:
Recording of all the webinar sessions can be found here; https://enduringnet.org/fashions-forgotten-workers/
In the webinar, which featured contributors based in both Britain and India, we discussed the following issues:
- The challenges faced by homeworkers and other vulnerable supply chain participants, particularly in the context of the pandemic, which has exacerbated the situation for many.
- How homeworkers might be supported and protected, for example by worker collectives or the use technology.
- Learning how ethical investment practices could play a role in driving transparency and improvements in working conditions for homeworkers and other informal workers.
Homeworkers and their representatives argue that it would be wrong to call for an outright ban on these employment practices; homeworking suits many workers, especially married women with children, who might otherwise have no access to cash. Even if the wages are very low, the work gives them the flexibility to juggle family and work responsibilities. Working from home avoids the need to commute to sometimes distant factories, sometimes being exposed to harassment at the factory or travelling to and from, plus homeworkers can often decide how much they want to work and which hours they want to work.
We have mentioned in previous blogs that, for investors and consumers, the pandemic has brought existing human and labour rights issues into stark focus, very much highlighting the “S” of ESG. As the pandemic and lockdowns continue to affect workers around the world, people are being laid off without proper access to governmental safety nets while, for others, their health and safety is put at risk as businesses try to keep up with unprecedented increases in demand. During the crisis and the hoped-for recovery from it, companies still have a responsibility to respect human and labour rights within their direct operations and down their supply chains.
Investors in these global names (in sportswear and fast fashion, for example) should continue to engage with companies on these problems by establishing clear objectives and timeframes to address issues of exploitation or poor practice. Engagement should always be the first course of action.
Companies with this type of extended supply chain tend not to feature in Castlefield portfolios because they fail our screening processes. Using our B.E.S.T philosophy, we look hard at company supply chains and sustainable business policies, so we avoid businesses whose activities make us uncomfortable. However, industries change quickly, so we must always remain vigilant.
Written by David Gorman
Clean Clothes Campaign https://cleanclothes.org/
UN Guiding Principles on Business and Human Rights: https://www.ohchr.org/documents/publications/guidingprinciplesbusinesshr_en.pdf
“OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector
 Figure cited at the webinar.
 The Alan Turing Institute: Trustworthy Digital Infrastructure for Identity Systems project
Information is accurate as at 27.07.2021. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment capital is at risk.