Better Brands, Better Production?
Ever since the tragedy of Rana Plaza, poor working conditions have increased in visibility. But do the huge labels really keep their fair production promises?
VAUDE is increasingly known for its sustainable production. They started in a niche but might be the trendsetters. An interview with CEO, Antje von Dewitz.
The textile industry has fallen into disrepute for deplorable production environments, and not just because of the collapse of the Rana Plaza factory in Bangladesh. When price is the only consideration, working conditions often fall by the wayside. The German Federal Ministry for Economic Cooperation and Development (BMZ) created the Textile Alliance to target improving social, ecological and economic conditions along the entire supply chain. German outdoor equipment manufacturer VAUDE has worked with the Textile Alliance since it began at the end of 2014. VAUDE has already made a name for itself by committing to ensuring its entire product line is produced environmentally. CEO Antje von Dewitz, at the helm since 2009, is one of the primary drivers behind these efforts. DDD had an opportunity to talk to Antje von Dewitz about opportunities medium-sized firms have for assuming responsibility, and what is happening with the Textile Alliance.
DDD: VAUDE is one of the companies that have been very involved in recycling and ensuring fair working conditions for a long time now. Today at a lot of different levels, you hear claims that while these goals are desirable, they fail because of practical constraints and that it is difficult to promote such initiatives. To what extent can an individual firm or entrepreneur assume responsibility and what kinds of hurdles will they face?
…this includes creating an environment of transparency to start with.
Antje von Dewitz: Generally I feel that an entrepreneur or firm should take responsibility for its actions and their impact. For me, this includes creating an environment of transparency to start with. It means revealing the impact our actions have from a business, social and ecological perspective, and then owning up to these as a company. Our modern economy is very complex, so it is not always easy to say: I am aware of my responsibility and will have everything in hand by tomorrow. It doesn’t work that way; you have to approach it step by step.
VAUDE has promised to publish an audited common good balance sheet in keeping with the ideals of the Economy for the Common Good. Plus the company has achieved leader status by passing voluntary audits conducted by the Fair Wear Foundation. What do these sorts of voluntary commitments involve in practical terms?
In order to join the Fair Wear Foundation, you have to have 90% of your factories audited inside a three-year period.
We have to look at them separately. The common good balance sheet is really just a report on what we are doing. Our dedication in all kinds of areas goes back much further. We personally select each of our production facilities, for example. We have two teams in China and Vietnam who supervise the production lines and have developed lasting relationships that don’t just focus on quality, but also on social criteria. We have always been transparent about who we produce with – we have worked with most of our suppliers for more than seven years.
In order to join the Fair Wear Foundation, you have to have 90% of your factories audited inside a three-year period. We have around 40 factories in Asia, for example. For the auditing process, a Fair Wear team that can speak the local language visits the factories. We are just the client. As a medium-sized enterprise, our production volume is just around 1-10% per factory. So we do not have a lot of influence. There are many elements we cannot check out ourselves, like employment contracts or fire safety measures. This is where the Fair Wear Foundation comes in and drafts a report. A hotline for complaints is part of the process. In every factory that is audited, signs with a telephone number are posted and employees are asked to call the anonymous tip line if they have complaints or grievances. This is a way of ensuring that standards are complied with even outside the auditing process and that the people in charge don’t just create an artificially positive environment for the audit itself. It would be very hard to beautify the situation for an audit, since the process is very detailed.
The system is very well-rounded and holistic, which guarantees that everything comes to light.
As the client, we are also audited and our ability to ensure a responsible purchasing process is assessed. Have we trained our people in this area? Is a system in place? Is our professional structure set up so that our upstream chain does not cause overtime for the suppliers downstream? The system is very well-rounded and holistic, which guarantees that everything comes to light. If violations do occur, then Fair Wear follows up on them to ensure a continual process of improvement. In my experience, this process is not subject to the usual problems that plague audits. It would not be possible to spruce everything up for the audit, and then slap the pictures of this fake happy world on our walls while the factories return to their grim reality. Plus in order to achieve leader status with Fair Wear, 90% of your production facilities have to have been audited. And you need to introduce new methods and ensure a minimum wage is paid, for example.
It sounds like it costs quite a bit to implement all this. It is likely to give you a competitive advantage, because you can increase the customer loyalty of a specific group and market. The higher prices must be a disadvantage in other markets though. How does this play out in everyday business? Does it mean you remain a niche product, or does one not automatically exclude the other?
Before I answer that, just briefly: It is not only the social element of what we do. There is also the ecological side with the bluesign system, the most stringent environmental standard in the textile industry ensuring that, along the complete production process, only materials are approved that are not harmful to you or the environment. We also increasingly use recycled materials in our products and we promote a return system based on sustainable and social principles. We have a huge number of measures in place on the ecological end which are, together with our social standards, joined in our Green Shape evaluation system. Green Shape is our VAUDE guarantee for environmentally friendly products – made from sustainable materials, resource-conserving manufacturing and fair production. The strict evaluation criteria cover the entire product life cycle. All this means that our products are more expensive and cost more than what the average consumer is willing to pay. Back in 2008 when we started implementing all this consistently, we really were a niche product. And people were not very interested in these issues either.
The target group of people who are willing to step up and consume responsibly is growing…
Today it is becoming increasingly clearer that customers are very interested in the background and are prepared to punish companies that do not assume social and ecological responsibility. The target group of people who are willing to step up and consume responsibly is growing, and the willingness to pay a bit more is growing with it. At the same time, the risk is increasing for corporations that do not act responsibly. I would say that right now we still have a competitive edge because our dedication allows us to position ourselves uniquely and sets us apart from the rest of the pack. On the other hand, I think a lot of what we do will soon become basic requirements for all companies, since customer awareness is really growing.
Is a system primarily based on voluntary commitment and corporate social responsibility enough, or do you feel that more stringent regulations at the policy level are needed?
Well I am an entrepreneur and on a basic level the freedom to run our business as we see fit is important to me. That is one part of it. But in the past I have experienced enough times when regulations made it so much easier for me or us as a medium-sized firm to move forward. REACH – an EU regulation that governs the production and use of chemicals – is a good example. This agreement stipulates that product manufacturers must provide transparent information about what chemicals their products contain. In order to know what is in your products, you have to know every upstream stage of your supply chain. So you can only call your product a bluesign product if all the components – yarn, dyes, buttons – are bluesign certified as well.
We had really wanted to take responsibility voluntarily, but as a medium-sized firm we can often only do so if other companies take the same path as well.
Although we have been working with bluesign since 2001, from 2001 to 2008 we were only able to produce very few bluesign products since all our upstream suppliers argued that there was not enough demand. Then the REACH guidelines were passed and suddenly more companies were interested and wanted to introduce bluesign too in order to conform with REACH. We had really wanted to take responsibility voluntarily, but as a medium-sized firm we can often only do so if other companies take the same path as well. So experience has shown me that it is considerably easier and quicker, and sometimes only possible, with outside pressure. This can take the form of regulations like REACH or an NGO on the other end that very effectively raises public awareness of a problem.
Another vehicle or initiative for winning over the public is the BMZ’s Textile Alliance. It seemed to start off very slowly and was met with scepticism. Now the entire textile and fashion industry seems to be on board. This in turn has led to claims that the guidelines are being watered down. But many say this path is more realistic. What do you think?
It has long been our goal to be a completely sustainable company at all levels. Dealing with whatever conflicts with this goal is what characterizes our daily business.
That is what sustainability is all about: You need to make compromises to implement it.
It is the same with the Textile Alliance. You have people on one side who say it has to be manageable, and people on the other who say “no, we have to use this opportunity and set the highest possible standards”. That is what sustainability is all about: You need to make compromises to implement it. It doesn’t help to think in black and white, it just blocks progress. We have to take tiny steps forward in shades of grey. So I think the current situation with so many companies involved and a few limitations to the original document is a really good solution. A step in the right direction.
It depends. Right now it looks very positive since the Textile Alliance and larger corporations have come together. In many areas, such as textiles, Germany is the key European market. When public awareness of the Textile Alliance has grown to the point where people start asking “who is a member and who is not”, then I think this is a possibility. Then it would set the standard for other countries and brands.
Another ideal being bandied about in the Textile Alliance is creating a new seal. But according to what I have read, there are over 40 seals in Germany already. The problem with a ‘super-seal’ would be that many companies could not comply with the standards and it would be very complex. What do you think about this kind of seal?
There are efforts currently underway to create a ‘super-seal’. A lot of brands are working on it, us included. We are creating a huge complex and an international standard. From growing the plants or from the chemicals to the final product: A large pool of know-how is there, just waiting to be tapped. The issue at hand here is really about checking every step and identifying any sensible measures we already have in place. As a rule, I am in favour of seals and certificates not only because they give customers the highest possible security, but because manufacturers can also trust them.
By now the market has changed some; it seems like more conscious consumption is growing in importance. Do you believe this development will last, or does it have to go hand in hand with a larger process of rethinking as a society about the Economy for the Common Good? Or is it a process that mostly appeals to those with sufficient financial means so they do not depend on cheap products?
I think a parallel process is taking place right now: On the one hand, I really believe that it is growing in relevance because the problems and challenges with this type of production are becoming more transparent and we cannot simply forget about them. It is like the images from meat production that are burned into our brains. They accumulate and we develop an awareness. Here I think the size of my wallet doesn’t really play a role because the question is more fundamental: How do I shop? How do I use my resources?
In ten years, we will no longer be asking “should I do it” or “can I afford to do it”; it will simply be expected.
At the same time, we are seeing how popular Primark and the like are with young people although they are very well informed. This is the parallel development. I fundamentally believe that fair production and adhering to toxic substance guidelines will soon be a hygiene factor of sorts. In ten years, we will no longer be asking “should I do it” or “can I afford to do it”; it will simply be expected. I am confident, despite the parallel processes we are seeing right now. What any individual or company does beyond that depends on the dedication of the respective company and the support of some form of the Economy for the Common Good. This concept is being very well received right now because people are more interested in finding out how companies operate, what general responsibilities they are accepting, and the attitudes driving these.