Fashion’s fragile supply chains with the Business and Human Rights Centre

The clothes you're wearing have travelled a remarkable distance before reaching your wardrobe.

A typical garment may spend months moving through a global network of farms, mills, factories, suppliers, logistics providers and retailers. Raw materials are sourced in one country, processed in another, assembled somewhere else and shipped across continents before arriving in stores. What begins as simple clothing design often passes through dozens of hands before it reaches the customer.

Fashion is a $1.7 trillion industry built on supply chains designed for speed, flexibility and low costs. Those same qualities have helped drive growth and keep prices down, but they can also create vulnerabilities when conditions change. As trade tensions, tariffs, climate impacts and geopolitical uncertainty increase, supply chains that appear highly efficient can become increasingly exposed to disruption.

Environmental impacts often dominate sustainability discussions, but many of the industry's biggest challenges are social: poor working conditions, labour rights abuses, weak worker protections and the lack of meaningful oversight across complex supplier networks. When pressure enters the system, those risks are often borne by the workers with the least power to influence the outcome.

In this week’s episode, Giulia Bottaro discusses what this means for fashion’s future with Áine Clarke, head labour rights in supply chains & investor strategy at the Business and Human Rights Centre.

Their conversation explores why modern fashion supply chains have become increasingly vulnerable, how business models built around speed and flexibility can amplify risk during periods of disruption, and why workers often bear the greatest costs when commercial pressures move through the supply chain.

The discussion also challenges the common assumption that transparency alone is enough. Knowing where risks exist is only the first step: without changes to purchasing practices, stronger worker protections and meaningful accountability, transparency risks becoming little more than a reporting exercise.

As sustainability increasingly becomes a conversation about resilience, this episode asks a fundamental question: who ultimately bears the cost when fashion's supply chains come under pressure?

If you enjoyed this episode, subscribe to our newsletter and follow us on LinkedIn, TikTok and Instagram – and why not spread the word with your friends and colleagues?

Transcript

Giulia Bottaro (00:34)
Welcome to a new episode in the series focused on sustainability in fashion. I am your co-host Giulia Bottaro. The fashion industry has sprawling supply chains. For example, the top I'm wearing took a year to be produced from the design stage with its raw materials being sourced from one country to be assembled in another one. And the final garment

hitting the stores in another continent altogether. This quite not so straightforward process comes with significant impacts and risks, compounded by a lack of transparency and widespread malpractices. While most people tend to be aware of the striking environmental damages caused by fashion, the social ramifications are often underestimated. According to RepRisk,

Two-thirds of fashion supply chain risks are social, such as human rights breaches and poor working conditions. It turns out that the supply chains of this $1.7 trillion industry are quite fragile, and it's only getting worse amid tariffs and global trade

We discussed what this means for its future with Áine Clarke head of labor rights in supply chains and investor strategy at the Business and Human Rights Center. Hi, Áine Thank you so much for joining us today.

Aine Clarke (01:56)
No problem, Giulia I'm really happy to be here.

Giulia Bottaro (01:58)
Can you tell me about your experience and your role at the BHRC?

Aine Clarke (02:03)
Yeah, sure. So I lead the Labour Rights Programme at the Business and Human Rights Centre, which means that I lead the strategy and development focusing on business accountability and transformation in relation to a wide spectrum of labour rights issues from decent work, including freedom of association and collective bargaining to responsible purchasing practices.

to severe abuses, including debt bondage and forced labour at the other side of the spectrum. Our work is grounded in a deep understanding of the centrality of worker power to responsible business conduct and in bringing to an end systemic drivers of abuse. over the past four years, we've repeatedly shaped our strategies to maximise impact

integrating the climate and labour intersections to reinforce the rigour of our corporate research and advocacy.

Giulia Bottaro (02:55)
It's really interesting that you mentioned climate and social elements because these two things really go together, even though sometimes it doesn't look like it. And for us at Shaken Not Burned it's all about achieving a just transition. So there is no point in getting to net zero if then a lot of people are working in slave-like conditions.

talking about the fashion industry, which is the focus today, I mentioned in the intro that the supply chains are quite fragile. And this is a very big question, but what makes the supply chain so fragile?

Aine Clarke (03:30)
Yeah, mean, it's such a good question and the answer is complex. There's multiple intersecting issues. We operate in the first instance in an economic system that is highly unequal, where wealth and profit is accumulated and maximized at the top of supply chains. So with brands and buyers and commodities, raw materials and labor are exploited in global majority countries.

The dominance of this model facilitates various forms of exploitation, including poverty wages, discrimination and violence, crackdowns on trade unions and collective organizing, rising precarity of work and a lack of social protections. And across the supply chain, the risk of exploitation is heightened by weak labor governance. This includes the complex and opaque network of global supply chains.

where outsourcing and subcontracting are prized for their efficiency and business incentives which are misaligned. So human rights are externalized and commercial incentives are prized over others. So over the past 40 years, the evolution of demand-driven business models has further put pressure on supply chains. So operational shifts towards speed, flexibility, small batch production.

change how labor and environmental risks are produced, concentrated and governed. And we see this specifically within the fast fashion and now the ultra fast fashion These purchasing practices are so central to understanding augmented fragility in the supply chain. Faster production cycles.

are being layered onto a system where commercial practices are already misaligned with worker protection. So brands retain flexibility to change orders, volumes and timelines at short notice while workers face fixed wages, limited bargaining power and significant retaliation risks. Without freedom of association, workers have little ability to negotiate how these processes are implemented in practice.

This is why harms are so unevenly distributed and ultimately concentrated on those that are in the most precarious conditions within supply chains. So if we take lead times, for example, which are a cornerstone of responsible purchasing practices, when they're shortened without corresponding changes to order stability, suppliers have very little way to respond. In practice, this translates to excessive overtime,

intensified work pressure, wage violations and shortcuts on health, safety and environmental controls. And these outcomes are passed along to workers very often within the supply chains. We've documented these impacts in our most recent report about brand purchasing practices during the US tariff crisis, which shows that some of the heaviest costs of those US tariffs fell on those least able to bear them.

which is women workers on apparel factory floors. As brands shifted orders, squeezed prices to protect their margins, garment workers found themselves facing layoffs, hunger and rising risks of exploitation. The response to the tariff crisis reveals this systemic failure by brands who continue to treat human rights as optional when commercial pressures arise. And on top of these kind of very structural issues within

the sector, we additional contextual issues, including geopolitical environments, as I've just mentioned in the US tariff example, and environmental and landscape disruption, climate breakdown, and the aftermath of the pandemic, which has put additional financial and economic burden on some of these key sourcing contexts.

Giulia Bottaro (07:23)
It feels like because of these supply chains are so long, so the brand that we know, the shop that we buy from, they will all have in turn a range of suppliers. And then it may be that the factory that produced the garment is way down the supply chain. And so there is a lot of talk about a lack of transparency and the fact that sometimes these brands claim

that they don't even know which factory produced which garment. So ultimately, how is this lack of transparency affecting stakeholders in the industry?

Aine Clarke (07:58)
first of all, just to say it's an excellent observation and it's not a it's not an exception. It's a part of operational models to subcontract and shift production into less visible parts of the supply chain. as a result, risks to labor rights and environmental risks become concentrated beyond tier one, where, as you mentioned,

oversight is weakest and accountability is harder to enforce. Partly because, and in addition to that, working conditions and models within those lower tier supply chains are more precarious, likely informal structures, and again, lacking the kind of oversight and transparency that is necessary. I would say kind of on the flip side,

If we think about why transparency is important within supply chains, we know that it's important for building trust, for ensuring ethical standards, for enhancing operational resilience. If you are a company and you're mapping the origin and flow of materials, the number and location of suppliers, the demographics of your workforce, and any contextual and geographic risks, we know that

those companies are better able to identify labor rights abuse or operational issues and more easily comply with regulations. Frankly, there's a lot of emerging due diligence and trade sanctions that are being introduced not just in the global north, but also in global majority companies, countries that will incentivize better practice in this regard.

to kind of reflect a little bit on my point around production cycles and the increasing volatility, but increasing pace of those cycles. Transparency is important in that regard for earlier risk detection. where risk emerges very quickly, transparency can help identify

operational signals that are commonly associated with heightened risk in practice, such as repeated last minute order changes, sudden spikes in order volumes, or persistent schedule compression. Now, these signals don't prove abuse on their own, but they allow companies then to interpret and to go beyond what that means in practice. But I think

transparency has been viewed as an end goal in itself. And the reality is, is that it's just a means to an end, right? So it's only effective when it triggers some kind of corrective action and is accountable to workers. this last point is really important. if risk is identified, but commercial decisions remain unchanged.

then transparency really just becomes documentation rather than prevention. And in addition, transparency without worker access to that information is extremely limited. not only can workers really validate the transparency or the findings within that data, but they can also raise concerns

about it and essentially prove the validity of those findings. And this is where traditional mechanisms for increased transparency fall short. So I'm talking about kind of audits and disclosure requests because they're both periodic and they're retrospective in a structure or in an infrastructure that requires ongoing proactive

⁓ transparency or risk mapping.

Giulia Bottaro (11:40)
So what alternatives are available out there that would be a bit better in providing actual data? Well, reliable data.

Aine Clarke (11:49)
from a labor rights perspective, there is, a legitimate and recognized mechanism in most countries and most jurisdiction for workers to provide that

proactive monitoring approach to risk. And that is through unions, collective bargaining structures, worker committees that are embedded in global framework agreements or other agreements with unions, which essentially function, as I mentioned, as a proactive risk mitigation tool. workers are acutely aware of,

the risks that are happening in factories or in their places of work and they're best placed to offer solutions to those problems. And so, it becomes a much more proactive and ongoing approach that is worker centered with worker agency to control the outcomes of those of those issues.

legitimate union or worker voice is the best way to kind of inform and mitigate these risks.

Giulia Bottaro (12:56)
I suppose, ⁓ workers union voice is like bottom up, But then if you're doing an audit, then it's a company that provides a criteria to then judge the outcome of the audit. So it's more top down, right? So that there is an imbalance. Like, is it even realistic if the company says we want these criteria? Well, maybe they don't apply in this specific geography or in this specific factory.

Aine Clarke (13:11)
and

Giulia Bottaro (13:22)
Does it make sense?

Aine Clarke (13:24)
Yeah, I agree with that. think audit methodologies are typically standardized. You know, we see often from a baseline audit methodology is a kind of a review of documentation or payroll management policies. You will have some variation, although not commonly of worker interviews that are on site.

So again, you have this kind of power imbalance. Exactly, you can have power imbalances between management and employees who don't feel at liberty to speak freely and fear retaliation in many cases. And then the kind of the third element is the visit to production facilities and dormitories, which is often standard.

Giulia Bottaro (13:47)
With the pressure, yeah.

Aine Clarke (14:11)
There's many kind of methodological challenges with that approach. It's time bound. Quite often, it'll be pre-announced or pre-arranged so that employers can ensure that they meet the standards of the audit at the time that they're visiting. Again, I think there is an element of how well-trained the auditor is to spot.

Giulia Bottaro (14:25)
Yeah.

Aine Clarke (14:37)
issues like forced labor, for example, which are deeply challenging to identify in a workplace context where you might have elements of coercion, again, very difficult to identify and multiple other indicators of forced labor that can be easily kind of concealed on the day of an

Giulia Bottaro (14:58)
It reminds me of a notorious Chinese brand that some, I don't know if last year or two years ago, they invited a bunch of influencers to one of their factories. And they were like, look, these factories are so clean. The workers are so happy. Everybody's smiling and nobody on the internet believed them because people are aware of what's behind really these, these brands. And, you know, if you put a thousand

Aine Clarke (15:21)
Hmm.

Giulia Bottaro (15:25)
new styles per day on your website, like surely someone down the supply chain is unhappy. You mentioned there social and environmental risks, but maybe we could focus on the social more. So can you provide some examples of the most prevalent risks found in the apparel industry?

Aine Clarke (15:43)
we're seeing this playing out in real time in a lot of the South and Southeast Asian contexts that we work in. environmental risks are compounding and interacting with social risks in a myriad of ways. And they transform these hazards into direct

economic and physical threats for workers on the factory floor. And as I say, we're seeing that in real time, most notably, I think, in the garment sector with extreme heat, but also flooding where ⁓ these extreme weather events disrupt production, where workers are paid piecemeal, but not only that leads to lower wages.

It affects the health of workers. It increases precarity and job insecurity. from a baseline where labour laws and labour protections are relatively weak, workers just simply don't have the capacity or resources to adapt and as such are bearing the brunt of these intertwined risks. We do see that the

that the fashion industry has begun a journey towards climate mitigation and adaptation. did research recently about just transition planning within the garment sector. And we looked at the 65 largest apparel brands and how they were addressing social risks associated with the climate crisis and ultimately kind of it.

Giulia Bottaro (16:56)
Mm-hmm.

Aine Clarke (17:14)
⁓ incorporating worker engagement into those policies. And we found that across the board, companies are setting these very ambitious climate targets and commitments to decarbonize their operations and supply chains. But that factory workers on whom the industry rests and,

Giulia Bottaro (17:29)
Hmm.

Aine Clarke (17:35)
much of the value is extracted. We're entirely missing from these conversations and these commitments. exactly, a high clear that the social implications of the

Giulia Bottaro (17:42)
So it's all very high level kind of goals.

Aine Clarke (17:51)
of the just transition imperative are absent. it looks like kind of paper commitments, companies are still seeing climate change and social issues or climate risk and social issue as divorced from each other. So they don't interact, which is, as we have just described, it's not true.

And also that companies are, as you say, enacting a top-down approach to some of these huge transformations that need to happen within global supply chains and across their global supply chains, without the involvement of workers that are in the factories, that are doing the work, that are producing the goods, and how that will ultimately impact them.

So it's disappointing.

from a conceptual standpoint, it's still not being discussed in the way that it should considering the risks that are at stake.

Giulia Bottaro (18:44)
Yeah. Yeah. You mentioned there Asia and South Asia, that's your focus. Are these also the geographies in the supply chain that are most affected by the problems that you described?

Aine Clarke (18:55)
I think in terms of extreme weather events, these are some of the countries that are most affected. But, you know, based on and just acknowledging that the structural systemic issues that affect garment supply chains, they're certainly not the only, I mean, there's patterns that can be patterns of abuse that are replicated.

across different supply chains. you can see similar developments and similar issues taking place in Latin and South America in the garment sector there. in parts of Europe where, the climate crisis might not be so pronounced, although it's fair to say we're all deeply impacted.

by it, but we have these kind of same structural issues that are taking place there as well. from a very fragile baseline, you can see how these issues emerge and are exacerbated based on these contextual factors.

Giulia Bottaro (19:53)
So ⁓ easy question. What are some of the solutions to these issues?

Aine Clarke (19:59)
Yeah, so I would say that governments have a pivotal role to play through regulations, incentives and creating that enabling environment, the infrastructure for workers and for worker rights. Governments are essential because many of the risks that are produced by competitive dynamics cannot be solved through voluntary or unilateral measures alone.

And if that were the case, we would have seen much more progress to date. Governments can clarify that due diligence must cover business model risk, including purchasing practices and commercial behavior that create excessive pressure, not only penalizing supplier misconduct, which we see quite a lot between companies and their suppliers in these contractual purchasing practices and business models.

And through incentives and market shaping, governments can introduce conditionality, right? So a level playing field should mean no company gains advantage by shifting predictable harm onto workers or the environment. And finally, the infrastructure or the enabling environment questions. Governments must strengthen labor protection and inspection, access to remedy and protections for freedom of association.

because again, these elements reduce inequality between capital and labor or between employers and workers. These elements go beyond kind of the transparency tools, the monitoring systems, because they enable workers to really access that information and use that information without fear of retaliation and to be truly

engaged with business as part of their ongoing due diligence ⁓ measures.

Giulia Bottaro (21:52)
things come to mind. The first that it sounds challenging because we're talking about an industry that is across various countries, so various jurisdictions. So how do you deal with the fact that maybe you have a very enlightened government somewhere that wants to impose laws, but then they should also be respected by a government somewhere else, maybe where these factories are located. And secondly,

The EU has been enacted two years ago, the Corporate Sustainability Due Diligence Directive, or CSDDD. Do you think that is doing something? You mentioned there the government is important. So do you think this is achieving anything?

Aine Clarke (22:38)
on the on the second point. I think, we need to wait and see. It's not clear. I think the final text is certainly not as strong as we would hoped it would be, particularly around this kind of stakeholder engagement and union engagement point.

Giulia Bottaro (22:48)
Yeah.

Aine Clarke (22:52)
But I think, it's more than we had, a couple of years ago, five years ago, and we need to ensure that what we do have is kind of robust and enforced and that companies essentially take it seriously and that there are true incentives for rather practice and penalties for non-compliance. And so I guess the shorter answer is I'm hopeful.

But we need to kind of wait and see how that transpires. I think positively from the conversations that we have with companies, where they engage with us, they often reflect that these types of regulations and market incentives, they are important in driving better practice. And so even from the company perspective, this is A on their radar.

Giulia Bottaro (23:35)
Mm-hmm.

Aine Clarke (23:41)
They are enacting or hoping to enact those that fall in scope, the regulation. And I think it does, you know, it could have a really positive effect on not only on EU companies, but also kind of more broadly. mean, just to go back to your first point, you know, where you do have this

unequal kind of playing field between those countries that have enacted legislation and those that haven't. think by raising the bar, think it does incentivize better practice. And it'll be EU companies that fall in scope, but those also operating over a certain threshold in the EU market. And the hope is that the of the rising tide would lift all boats rather than the counterfactual.

Giulia Bottaro (24:27)
Mm-hmm.

Okay, so it would be a bit of a cascade effect in that case. Yeah. So we've spoken about the fact that these supply chains are so long and across so many countries. Would localizing them into maybe, not one country, maybe that's ambitious, but a continent even, would that help?

Aine Clarke (24:32)
Yes. Yeah. Yeah.

in theory, there are benefits to localizing supply chains. So as you mentioned, kind of reducing social risk, enhancing transparency, ensuring compliance with familiar domestic labor laws, and ultimately improving oversight over working conditions. you would imagine that the localization effect

would enable companies to kind of better monitor supplier practices through this kind of reduction in the complexity of their tiers and their supply chains. But in practice, what our research on brand purchasing practices in response to the US tariff crisis highlights is that abrupt and far reaching shifts in buyer purchasing practices, in fact, spikes labor rights abuse.

when it's not coupled with robust human rights due diligence to properly account for risks and impacts. So I think it's the manner in which any changes happen, which is since the tariffs came on board, we have recorded buyers moving rapidly to reassess sourcing strategies and production costs.

Giulia Bottaro (25:35)
Mm-hmm.

Aine Clarke (25:54)
And as a result, suppliers experienced orders being cancelled, delayed, sourcing locations reconsidered and price reductions demanded frankly of those suppliers. And these costs were passed directly onto workers and have resulted in layoffs and reduced working hours, delayed payments and other broader social consequences.

including pushing some workers into destitution and to pick up other types of informalized and precarious work. any shift in purchasing practices to, a localized environment must be conducted in that sense with human rights due diligence to assess the impact of workers, particularly if you're talking about

broad-based shift in purchasing behavior from a country like Bangladesh that relies so so much on on the garment the ready-made garment sector for its exports.

Giulia Bottaro (26:57)
This is a question that I normally ask to people when discussing why companies should take certain action for environmental reasons. It feels a bit weird to ask it for human rights, but ultimately

a lot of companies think only in terms of the bottom line. Why should companies in the fashion sector clear up the human rights breaches across the value chain?

Aine Clarke (27:21)
yes, I think to your point, does seem strange to kind of have to reiterate the business benefit to upholding, respecting and protecting human rights across supply chains. And yet, in a context where companies are mandated to

make profits and maximize profits and investors are incentivized on those same objectives. Often the argument or the discussion comes down to what are the benefits? And I think there's pros and cons to that argument. think if you put a financial

figure or incentive on human rights, you risk reducing human rights to a material figure or a kind of a value. And then, kind of risk again, ignoring those rights that may not have the same type of risk or severity.

Giulia Bottaro (28:19)
Mm-hmm.

Aine Clarke (28:27)
for example, the difference between, I don't know, kind of forced labor issues and collect, the importance of freedom of social and collective bargaining. That said, there is a lot of evidence to suggest and evidence of worker engagement, worker productivity.

you know, robust and proper health and safety standards, that productivity does improve, that engagement rates improve, where workers feel valued and respected and that they can contribute in a healthy and meaningful way to discussions that are taking place that affect them in factories and places where they work.

on the human rights side of things, sometimes it's difficult for companies to really get their head around what that means in practice. But ultimately what we're talking about is dignity at work so that, workers can take breaks when they need to, are getting

wages that are paid on time and with which they can meet their basic needs, that being the of the living wage, not the minimum wage that companies have a responsibility to provide that for workers.

across their supply chains and that does have a commercial benefit in the long term.

Giulia Bottaro (29:55)
Yeah, I think to your first point, maybe that's why this question feels a bit icky because everything is quantified to the max and really we shouldn't be quantifying human rights or human dignity, as you mentioned. But thanks for nonetheless clarifying what the benefits are because some people want to know that.

Aine Clarke (30:10)
you

Mmm.

Giulia Bottaro (30:17)
So to conclude, what can our listeners do, whether they are consumers, employees or entrepreneurs? Or policy makers, seems like...

Aine Clarke (30:24)
Mm. Mm.

Giulia Bottaro (30:26)
we should

Aine Clarke (30:26)
Mm.

Giulia Bottaro (30:26)
be speaking to policy makers mostly.

Aine Clarke (30:29)
Yeah, I mean, I think this is another great question. my initial thoughts are.

sometimes I feel like the emphasis on individual responsibility can be slightly overstated, right? We've talked a lot about the systemic issues that are arising from business practices and as such, individual choices can feel like a drop in the ocean when you're thinking about resolving some of these

really entrenched and embedded kind of structural societal issues. At the same time, I do think individual choices matter in shaping norms and expectations. And ultimately, the ultra fast fashion model has succeeded precisely because they cater to mass market demand. So consumer behavior really does mean a lot in that.

equation. So as consumers, think people can start by being more informed and engaged about how and where their clothes are made, and by recognizing that lower prices are often linked to heightened human and labor rights risk for workers along the supply chains. And shifting purchasing practices, even incrementally, can help signal that exploitative practices are neither

invisible, nor it's acceptable. I think that's an important, an important point from an individual choice perspective. As employers and professionals, I think we do have a, we do have influence, particularly in the in global north, and probably most of your, your listeners as well, to have influence through the companies that we work in.

particularly by supporting responsible sourcing practices, fair purchasing, and greater transparency through our own and our company's kind of supply chains. going back to a previous point, I do think meaningful and lasting risk mitigation does really depend on public policy. So regulation is essential to rebalance power and redistribute value across economic systems.

⁓ so that social costs are internalized and that labor exploitation to maximize returns is frankly no longer acceptable. so citizens and any policymakers that are listening to the podcast can play an important role through a number of different means, whether it be consumption choices,

through civic engagement, those with more power and ability to enact certain laws or enforce certain laws should also take that seriously as part of their remit.

Giulia Bottaro (33:12)
It was a really, really good conversation. Thank you for shedding more light on all the issues and risks and human rights abuses across the supply chain in the fashion industry. Thank you to our listeners for tuning in once again. We have a newsletter, we are on LinkedIn, we're on YouTube, on Instagram. So follow us wherever you are. This is one of the episodes in the fashion arc.

We're also going to talk about the cost of inaction and the circular economy. So stay tuned. Thanks again and see you next week.