ETHICAL STANDARDS:

Zara, flagship brand of the Inditex Group, has gained a reputation as the ultimate
destination for European fashion with very good ethical standards. The ZARA’s code of
conduct defines minimum standards of ethical and responsible behaviour which must be
met by the company along with it’s manufacturers and suppliers:

 No forced labour
 No child labour
 No discrimination
 Respect for freedom of association and collective bargaining
 No harsh or inhumane treatment
 Safe and hygienic working conditions
 Wages are paid
 Working hours are not excessive
 Regular employment
 Traceability of production
 Health and Safety of products
 Environmental awareness
 Confidentiality of information

The code implementation have the following code of conduct:

 Transparency
 Reference to national legislation, Conventions and Agreements
 Verification of compliance
 Ethics Committee and Whistleblowing Channel

ZARA has also been known with one of the best ethical standards in the industry. The
company is working on the following aspects:

 Planet

Zara has started a repair and reuse program called Closing the Loop. The program offers
customers the opportunity to drop off their used garments in-store or through the post in
order for their clothes to gain a second life. One of companies goals is that, by 2020, they
will no longer send anything to landfills from their own headquarters, logistics centres,
stores and factories.

They use the Greenhouse Gas Protocol to guide the measurement and reporting of their
carbon emissions and have set an intensity target to reduce emissions from their own
operations by 15% by 2020. However, they have not set target for the supply chain. Despite
this, reports have actually shown moderate increases in electricity and energy consumption.
Whilst Zara have stated they have water reduction initiatives, and there’s talk of how the
company plans to reduce their water footprint through a “Master Action Plan”, there is no
evidence of set targets to reduce water wastage.
  People

The 2018 Ethical Fashion Report – which looks at criteria including payment of a living wage,
transparency and worker empowerment initiatives – gave Zara an A+ in policies, auditing
and supplier relations, an A for knowing their suppliers, and a B for worker empowerment.

Suppliers and manufacturer partners with Zara are required to follow their Code of Conduct,
and their traceability systems allow them to know exactly how their products are made, and
where they come from.

Zara also states it has a total ban on child labour, forbidding any employees under the age of
16 to work in their factories, as well as a ban on forced labour and discrimination in the
workplace.

 Animals

Zara’s animal welfare policy includes a strict ban on fur, angora and on stocking products
tested on animals. They also claim to source wool exclusively from non-mulesed sheep.
Unfortunately, Zara does use leather and down without stating their sources.

Overall Rating: It's A Start

As one of the largest fashion retailers in the world, Zara has an opportunity to lead the way
into a sustainable future. Zara has set some good policies for supply chain management,
such as their Closing the Loop program. However, their business model is based on an
unsustainably high turnover rate. Zara pride themselves on giving consumers the ‘latest
fashion trends’ every 13 days!

The promotion of such rapid consumption is inherently harmful to both people and planet.
We believe that, as a global leader in retail, Zara needs to be setting the standard for
sustainability. With many of their sustainability targets set for 2020, it will be interesting to
see how Zara will rate over the next 2-3 years.