European Management Journal 32 (2014) 837–849

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European Management Journal

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Sustainable supply chain management in the fast fashionindustry: An analysis of corporate reports

http://dx.doi.org/10.1016/j.emj.2014.02.0010263-2373/� 2014 Elsevier Ltd. All rights reserved.

⇑ Corresponding author. Tel.: +90 232 4115333; fax: +90 232 3745474.E-mail addresses: duygu.turker@yasar.edu.tr, turkerduy@yahoo.com (D. Turker).

Duygu Turker a,⇑, Ceren Altuntas b

a Business Administration, Faculty of Administration and Economics Sciences, Yasar University, Selcuk Yasar Kampusu, Universite Caddesi, Agacli Yol, No. 35–37 Bornova,Izmir 35100, Turkeyb Sea and Port Management, Vocational School, Yasar University, Selcuk Yasar Kampusu, Universite Caddesi, Agacli Yol, No. 35–37 Bornova, Izmir 35100, Turkey

a r t i c l e i n f o

Article history:Received 30 August 2013Accepted 12 February 2014Available online 14 April 2014Handling Editor: Tsan-Ming Choi

Keywords:SustainabilitySupply chain managementFast fashion industrySustainability reports

a b s t r a c t

In recent decades, the fast fashion industry has been characterized by widespread operations across bothdeveloping and developed countries. Due to the economic, social and environmental problems in devel-oping countries, companies increasingly focus on sustainability and try to ensure the same quality andstandards in working and production conditions throughout their supply chains. Although the tensionin the exchange of resources between developing and developed countries lies at the heart of current sus-tainability activities, what these companies are actually doing to manage their supply chain has not yetbeen explored in depth in the literature. Drawing on the theoretical framework of Seuring and Müller(2008), the current study attempts to fill this void by conceptually mapping the current situation of sus-tainable supply chain management (SSCM) in the fast fashion industry by analysing reports from 9 com-panies that use the same reporting guidelines. The results of the study reveal that these companies focussignificantly on supplier compliance with their code of conduct, employing further monitoring and audit-ing activities to prevent production problems in developing countries, improve overall supply chain per-formance and set sustainability criteria for their suppliers.

� 2014 Elsevier Ltd. All rights reserved.

Introduction

As a result of the extended supply chains in modern businessoperations, sustainable supply chain management (SSCM) hasstarted to attract increasing attention from both scholars and prac-titioners in recent years. The attention of practitioners has beenraised by a change in focus from corporate sustainability to specificlayers of the supply chain due to pressures imposed by interna-tional and local regulations, non-governmental organizations(NGOs), customers and competitors (Amaeshi, Osuji, & Nnodim,2008; Welford, 2005; Welford & Frost, 2006). These developmentsin the business world have in turn triggered scholarly attention fortheory building (e.g. Carter & Rogers, 2008; Seuring & Müller,2008), metric development (e.g. Hassini, Surti, & Searcy, 2012),case analysis (e.g. Pagell & Wu, 2009) and surveys (e.g. Bowen,Cousins, Lamming, & Faruk, 2001). New research efforts are beingdeveloped on individual or all the integrated dimensions of SSCM,namely economy, environment and society, which together arealso called the triple bottom line (Kleindorfer, Singhal, & VanWassenhove, 2005). Integration of these dimensions would be

highly valuable as the existing literature regarding SSCM is ratheruni-dimensional, with an intense focus on the environment(Seuring & Müller, 2008). Existing conceptualization and framingefforts have led to different definitions of SSCM and differentimplications for scholarly research in various fields.

The concept of SSCM is usually defined by evaluating the com-ponents of its integrated structure. Within its general framework,SSCM includes supply chain management (SCM) and sustainability.Therefore, it can be defined as ‘‘the management of material, infor-mation and capital flows as well as cooperation among companiesalong the supply chain while taking goals from all three dimen-sions of sustainable development . . . into account which are de-rived from customer and stakeholder requirements’’ (Seuring &Müller, 2008: 1700). SSCM can also be considered as the integra-tion of corporate sustainability into SCM whereby the key dimen-sions of corporate sustainability are combined with SCMcharacteristics (Ahi & Searcy, 2013). However, regardless of thegeneric definition accepted, SSCM implications vary dependingon the structure of the specific supply chain that they belong to.Sustainability requirements of, for example, a steel supply chaincould be totally different than the supply chain for children’s toysor fast fashion clothing. Therefore, a sectorial snapshot is requiredfor the proposition of further applications in leading supply chains

838 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

or for spreading sector-specific practices to competing supplychains. This article attempts to provide such effort snapshot forthe fast fashion clothing industry.

The fast fashion industry owes its special features and structureto its requirements for shortened lead-times, faster inventory turn-overs and high order fulfilment rates for customer demand at itspeak points (Barnes & Lea-Greenwood, 2006). The industry has ahighly competitive structure that not only puts pressure on costs,but also the ability to offer the ‘‘newest’’ possible trend to thecustomers (Christopher et al., 2004). Therefore, it requires a highdegree of responsiveness combined with a certain level of effi-ciency. This responsiveness to demand is satisfied through theadoption of supply chain strategies like just-in-time sourcing(Bruce, Daly, & Towers, 2004), quick response systems (Fernie &Azuma, 2004; MacCarthy & Jayarathne, 2010) and agile SCM (Bruceet al., 2004). However, in order to become and stay responsive,various ethical (Barnes & Lea-Greenwood, 2006), employment(De Brito, Carbone, & Blanquart, 2008) and environmental issues(Saicheua, Knox, & Cooper, 2012) are being disregarded, which iscreating an unsustainable sectoral structure. Some previous studieshave focused on sustainability in fashion or clothing supply chains(e.g. Armstrong & LeHew, 2011; De Brito et al., 2008; Nagurney &Yu, 2012). However, to the best of the authors knowledge, noexisting study has combined the generic conceptualization effortsof SSCM with real life applications in fast fashion supply chains.

To investigate claims about unsustainability in fast fashion sup-ply chains, this study conducted a content analysis of the sustain-ability reports of fast fashion companies to analyse their SSCMimplications using the theoretical framework derived from Seuringand Müller (2008). The study sample was chosen from companiesoperating in the textile and apparel sector in Europe whose sus-tainability reports are prepared in accordance with the guidelinesof the Global Reporting Initiative (GRI). The study tries to exploreand measure the leniency of the overall practical implications inthis industry with reference to the dimensions of the theoreticalmodel. In doing so, it contributes to the literature by combiningtheory with practice through evidence derived from real fast fash-ion supply chains.

The first section presents a theoretical review of the fast fashionindustry, its supply chain strategies, and prominent practices. Thissection ends by introducing the study’s theoretical framework. Thefollowing section explains the methodological steps followed toconduct the study before the findings are presented in relation tothe study’s proposed framework. The article ends with a discussionof the implications of the study, with some conclusions for bothpractitioners and scholars.

Literature review

Fast fashion supply chains and sustainability issues

Current organizational changes in the fashion industry startedapproximately 30 years ago when the traditional luxury fashionindustry’s long-established stable structure was challenged by sev-eral environmental changes, particularly globalisation, changes inits customer base, and the entrance of competitors into previouslyprotected markets (Djelic & Ainamo, 1999). Until then, the fashionindustry had followed a fixed calendar of trade fairs and showspresenting the forthcoming season’s trends (Birtwistle, Siddiqui,& Fiorito, 2003). This made it possible to forecast demand as longas a year before the time of consumption based on previous salesdata (Guercini, 2001). Under the impact of specific factors, thisstable situation has evolved towards a new model called ‘‘quickfashion’’ (Guercini, 2001), ‘‘street fashion’’ or fast fashion Doeringerand Crean (2006).

Fast fashion is characterized by the transformation of trendydesign into articles that can be bought by the masses (Sull &Turconi, 2008). This industry aims to attract customers into storesas frequently as possible in order to increase the frequency thatthey purchase fashionable styles (Barnes & Lea-Greenwood,2006). This is achieved through low cost and low price apparelthat remains on the shelves for a shorter period of time thanthe traditional clothing industry (Bhardwaj & Fairhurst, 2010).This leads to shortened market cycles, more seasons and severalorganizational buying requirements, such as highly flexible man-ufacturing and design capabilities, blending trendy clothing rawmaterial and supplies, at very short lead times (Barnes &Lea-Greenwood, 2006).

As consumers of clothing industry products became more fash-ion-conscious (Bailey, 2001), the simple standardized designs pro-duced for the masses were rendered useless, leading to theelimination of mass production in the fashion industry and achange in fashion supply chain structures (Doyle, Moore, &Morgan, 2006). Until the 1980s, the fashion supply chains had beenstrongly protected by large retail stores to competition out of themarkets (Barnes & Lea-Greenwood, 2006). However, they thenstarted to be replaced by buyer oriented, strategically linked,highly responsive, low cost supply chains with shorter lead times(Tyler, Heeley, & Bhamra, 2006). Such structural changes wereachieved through the utilization of just-in-time strategies, agilesupply chain structures (Bruce et al., 2004) and information drivenstrategies, such as quick-response systems monitoring real-timedata at sales points, and responding quickly to current marketinformation (Christopher et al., 2004). Bruce and Daly (2006) arguethat even established supplier-buyer relations in the fast fashionindustry should have a short-response nature in order to applyboth lean and agile supply chain strategies, while their internalfunctions should be integrated in order to expedite a smooth buy-ing process. However, these changing circumstances and new waysof doing business in the fast fashion industry have had negativeimpacts on both environment and society. In order to respond tothese increasing environmental and social problems, fast fashioncompanies have started to adopt sustainable strategies andpractices.

One of the most important factors stimulating the rise of sus-tainable practices in fast fashion supply chains has been globaliza-tion of both sourcing and distribution. According to MacCarthy andJayarathne (2010), in the last 30 years, textiles manufacturing hasshifted significantly to less developed countries. For example, 42percent of the EU27’s clothing imports were supplied by China in2012, with Bangladesh and Turkey accounting for a further 13%each (EC, 2013). The list of countries exporting textiles to Europeis interesting for the wide range of locations of the top ten importpartners. Although the EU’s overall textile imports are dominatedby faraway countries, there are also close trade partners support-ing the changing pace in the industry. However, even companieslike Marks & Spencer and Zara, which used to depend on domesticsourcing, have expanded their sourcing strategies to countries suchas China, India, Bangladesh, Morocco or Turkey to find manufactur-ers that can comply with new flexibility and design requirements(Tokatli, 2008; Tokatli, Wrigley, & Kızılgün, 2008).

The globalization of the industry has affected supply chains intwo different dimensions. Firstly, the relocation of manufacturingsites had a negative impact on traditional European industries likespinning and weaving, resulting in unemployment for Europeantextiles and clothing industry workers (De Brito et al., 2008; Taplin,2006). Although companies in Western countries still own majorfashion retailers and the brands (MacCarthy & Jayarathne, 2010),the number of workers in these countries employed in the sectorhas declined according to EURATEX (2013) statistics: for example,– it declined by 3% from 2011 to 2012.

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 839

The second important impact of the extended fashion supplychain is the heavy environmental burden it imposes from in-creased transportation mileage. This is exacerbated by the timepressure on fast fashion industry orders, which means that themajority of shipments are delivered by air, significantly increasingCO2 emissions (Saicheua et al., 2012).

Apart the impact of globalization, the nature of the industry itselfimposes further environmental and social burdens. Production pro-cesses in the textiles industry use chemicals and non-renewablenatural resources that harm the environment (De Brito et al.,2008). Increased time pressures on the order cycles of the fastfashion industry result in employee abuse and other unethicalworking practices at manufacturing sites (Barnes & Lea-Greenwood,2006). The majority of fashion industry labour is located in offshorecountries and composed of young, poorly educated people, since themanufacturing process in this sector does not require high skills.Women and children make up the majority of the workforce indeveloping countries, since these disadvantaged people accept workat lower wages. In addition, there is a significant amount of forcedlabour in certain countries, such as Bangladesh (Viederman, 2013).Within this employment structure, the workforce is highlyvulnerable to discrimination, bad treatment, low wages and longworking hours (Ichimura, 2011).

De Brito et al. (2008) divide fast fashion companies into twomain groups. The first group is composed of those companies thatresist sustainability practices and simply try to survive in a highlydemanding environment. The second group is composed of compa-nies trying to adopt and improve sustainability through theirsupply chains by the utilization of tools such as eco-labelling, man-agement systems, environmental and social audits, communities ofpractice, fair trade and clean transportation modes. However, con-sidering the negative environmental and social impacts of thisindustry, there is a need for a sector-wide recognition of the lattergroup’s strategy. In order to take strategic action, fast fashionretailers take different measures and communicate these throughtheir sustainability reports.

For example, the global fast fashion retailer H&M states thatthey are implementing intensive sustainability practices in theirprocurement, stakeholder management, human resource manage-ment and environmental processes (H&M Conscious Actions.,2012). Similarly, Inditex Group lists a series of strategic actionswithin their environmental plan for 2011–2015, covering actionssuch as eco-efficient design of stores, reduced environmental im-pact of logistics activities, eco-friendly products, etc. (InditexGroup, 2013). In accordance with their Code of Practice principles,Next states that they conducted 1647 audits in 570 suppliers thatthey worked with in 44 different countries during 2012 (Next CSRReport., 2013).

The theoretical framework

Existing SSCM research on the fast fashion industry has focusedon the introduction of qualitative and quantitative sustainabilityindicators that apply to both internal and external supply chains(De Brito et al., 2008), the study of consumer perceptions andbehaviour towards sustainable fashion supply chains (Bhardwaj& Fairhurst, 2010), and the use of awareness-raising practicesthrough celebrities for the slow fashion movement to involve con-sumers in building a more sustainable supply chain (Pookulangara& Shephard, 2013).

Despite these various and increasing efforts to integrate sus-tainability into fast fashion research, a wider perspective on theindustry seems to be missing regarding the existing applications.The annual reports that companies use to communicate their sus-tainability practices through corporate reporting schemes annuallycan be invaluable sources for exploring industrial practices. To

bridge the gap in the literature regarding effort wider perspective,this study draws on an SSCM framework to conduct a frequencycontent analysis on the sustainability reports of leading fast fash-ion companies to measure the leniency of these practices.

The SSCM framework employed in the study is developed fromSeuring and Müller’s (2008) theoretical approach towards the con-ceptualization of SSCM. After reviewing the existing literature onSSCM, Seuring and Müller (2008) develop a conceptual frameworkwith three main parts. The first part identifies the triggers andincentives stimulating the focal company to adopt SSCM practices.These generally come from overall stakeholders, customers andespecially governments. The focal company then passes these sus-tainability pressures onto its suppliers through two normstrategies.

Seuring and Müller (2008) build their framework on Bowenet al.’s (2001) division between ‘‘greening the supply process’’and ‘‘product-based green supply’’. They propose supplier evalua-tion for risk and performance and SCM for sustainable productsas the other two parts of their framework. These are two comple-mentary norm strategies, with the adoption of one able to lead tothe achievement of the other in certain cases. The sub-dimensionsof the two norm strategies have been schematized for a systematicexploration of SSCM applications in large manufacturing compa-nies operating in Turkey (Altuntas & Turker, 2012). Fig. 1 showsthese sub-dimensions.

According to Seuring and Müller (2008), supplier evaluation forrisk and performance focuses on associated risks and barriers alongthe supply chain as well as performance concerns from an internalperspective. This is connected to a supplier assessment plan wheremonitoring, auditing and evaluation take place. This assessmentprocess has two objectives: improving the overall performance ofsuppliers, and avoiding risks in the supply chain. Dependency, flex-ibility, quality and speed are the important criteria for measuringimprovements in supplier performance, while the possible risksare evaluated according to the dimensions of the triple bottom line.

On the other hand, life cycle assessment is a widely used tool toachieve SCM for sustainable products ‘‘to comprehend all kinds ofproducts that have or aim at an improved environmental and socialquality, which can be related back to the already mentioned imple-mentation of environmental and social standards’’ (Seuring &Müller, 2008, 1705). It demands various minimum criteria require-ments from suppliers when designing or producing the products.In addition, sustainable products require intense communicationwith suppliers while improving their sustainable practices. Toemphasise that management systems play a crucial role withinthe entire system of SSCM, they are placed at the heart of theoret-ical framework in Fig. 1. By integrating all these factors within atheoretical framework, it is important to analyse fashion compa-nies with reference to their actions regarding these factors in orderto evaluate how they cope with the fast fashion-sustainabilitydilemma.

Methodology

Sample selection and data collection

The population for the study includes firms operating in the fastfashion sector around Europe. In order to obtain a comparable dataset, the sample was chosen from firms preparing their sustainabil-ity or corporate social responsibility (CSR) reports in accordancewith the guidelines of the Global Reporting Initiative (GRI). Devel-oped through a multi-stakeholder process, this framework helpsorganizations assess their economic, social and environmental per-formance and impacts (GRI, 2013a; GRI, 2013b). The GRI databasewas searched for reports of firms operating in Europe’s textiles and

SCM for Sustainable

ProductsSSCM

SCM for Risk and Performance

Supplier Assessment Plan

Product Life Cycle Assessment

Avoding risks

Improving supply chain performance

Speed

Dependency Flexibility

Quality

Economic

Environmental

Social

Improving Suppliers

Training

Communicating with Suppliers

Criteria for Suppliers

Environmental Social

Management System

Fig. 1. The theoretical framework. Note: Supply chain management (SCM); sustainable supply chain management (SSCM). Source: Altuntas and Turker (2012) adapted fromthe study of Seuring and Müller (2008).

840 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

apparel sector within the last 3 years (GRI Database, 2013a;GRI Database, 2013b), providing a total of 20 reports; however,some of them were reports from the same companies in previousyears, while others were non-English so were excluded due totranslation difficulties. This left 9 reports for the analysis. Although3 of these companies (Oberalp, Puma and Switcher) focus specifi-cally on sportswear, they were included in the analysis becausethey operate under similar conditions to other companies in thefast fashion industry. That is, the shortened seasonal cycle, marketpressures and similar globally-dispersed supply chain structuresmean that sportswear brands can also be taken as part of the fastfashion sector. Today, many sportswear brands focus on shorteningtheir lead times in order to meet the challenge of quick responserequirements in a fiercely competitive market (Taylor, 2008). Sincethe reports analysed in this study cover the period 2011–2013,they were prepared in accordance with the old versions of GRIguidelines. GRI has launched its most current generation of guide-lines (G4 Guidelines) in 2013 while continuing to recognize reportsprepared before based on previous versions of G3 and G3.1 till theend of 2015 (GRI, 2013a; GRI, 2013b).

Analysis method

Content analysis is used for making ‘‘replicable and valid infer-ences from texts (or other meaningful matter) to the contexts oftheir use’’ (Krippendorff, 2004, 18). In the current study, the re-ports were analysed and interpreted with the particular intentionof exploring the corporate sustainability of companies along theirsupply chains in the face of increasing pressures of fast fashiontrends in order to determine whether this sustainability focusmatches the theoretical framework of Seuring and Müller (2008).Therefore, the relevant texts in the reports were connected andconceptualized with this main research question to reveal the exis-tence or not of various patterns through the use of some specificwords, concepts, themes, etc. The main categories and sub-codingswere provided by the dimensions of SSCM identified in the frame-work of Seuring and Müller (2008) within the twofold strategies of‘‘supplier evaluation for risk and performance’’ and ‘‘SCM for sustain-able products’’ (Weber, 1990) More specifically, the contentanalysis relied on five main concepts drawn from the frameworkof Seuring and Müller (2008), as shown in Fig. 1: (1) avoiding risks,(2) supply chain performance, (3) criteria for suppliers, (4)

communication with suppliers and (5) improvement of suppliers.First, texts (sentences, paragraphs, and sections) related with thecompany’s overall SCM approach were recorded on a separatesheet from the main reports for further analysis. In the next step,sentences that included these 5 sub-codes were identified and as-sessed as to whether they are actually used in accordance with theframework of Seuring and Müller (2008) and how they are articu-lated and practiced by the company. That is, the coding processaimed to provide both quantitative and qualitative informationabout the on-going SSCM approach of the 9 companies. In doingso, while the existence and frequency of each category was mea-sured throughout the texts (Bailey, 1994), new categories werealso identified to explore new trends and changes in SSCM. In orderto ensure the reliability of the coding process, each text was inves-tigated independently by two researchers. In the case of disagree-ment during this process, the dispute was resolved through theinvolvement of a third researcher (Weber, 1990, 17).

Overall findings

Table 1 presents the overall information about the companiesand their reports. Such reports are usually named as sustainabilityor related terms, with sustainability in the supply chain being acore activity for almost all companies. For instance, in Calida’s2011 report, supplier management was the primary activity duringthe reporting period. The content percentage of supply chain issueswas between 10.34% and 34.42%, measured as frequency count ofthe keyword ‘supply chain’ across all reports. Once the keywordswere detected, the number of words in relevant sentences wascompared to the overall word count of the analysed report. Notonly large companies, like Inditex, H&M, and Puma, but also somerelatively small companies (Calida and Switcher) elaborately ex-plained their practices during the reporting period. Based on thequantitative results of content analysis, it can be stated that SSCMis becoming a critical issue for almost all companies in the sector.

The positioning of SSCM within the report is also an indicator ofthe priority given to the issue. Most companies directly provide anexplanation about SSCM under a separate title within their reportsand 6 companies mention their suppliers as partners with whomthe company wants to establish long-term relations. Dependingon the continuity of trusting relations, while H&M, Inditex andPuma called some suppliers strategic partners, other companies

Table 1Overall information on company reports.

Firm Headquarter Title of report Period Totalpages

Content%a Supplierdefinition

Supplierpositioning

Number ofsuppliers

Geographical distribution ofsuppliers

Calida Sursee/Switzerland

Corporatesocialresponsibility

2011 33 29.28 Partners Direct [Corporatesocialresponsibility/suppliermanagement]

N/A [90% of itsproduction iscoming from 5producers]

Production: Europe 66%[Hungary (own factory) 40%;Hungary (sub-contractors)14%; Other countries(Bulgaria, Romania, Poland,Italy, Turkey) 12%]; Asia 34%[China 32%; India 2%]Procurement: Europe 63%;Asia 37%

Mango Barcelona/Spain Sustainabilityreport

2012 58 10.34 Member intheir groupof interest

Direct [Oursustainabilitypolicy andmodel/the supplychain andsuppliers]

264 suppliers ofgarments andaccessories

Purchases: China 41.66%;Turkey 12.4%; Morocco5.87%; South Korea 9.38%;Spain 7.69%; India 5.42%;Bangladesh 5.81%; Vietnam3.88%; Italy 3.70%; Taiwan1.33%; Pakistan .89%;Portugal .84%; Indonesia.31%; Others .82%

C&A Brussels/Belgium

Actingsustainably.C&A 2012

2012 156 20.38 Partners Indirect[Mentionedunder relatedtitles]

785merchandisesuppliers

Procures: China 30.30%;Bangladesh 25.10%; India7.8%; Turkey 6.5%; Indonesia4.2%; Cambodia 3.9%;Vietnam 2.9%; Sri Lanka2.8%; Pakistan 2.6%; Romania1.5%; Others 12.4%

H&M Stockholm/Sweden

Consciousactionssustainabilityreport 2012

2012 93 31.18 Partners Direct[Commitments-2. Choose andrewardresponsiblepartners]

785 suppliers[148 strategicpartners make53% of products]

N/A [The list of supplierswere given in the companyweb site/; but the share ofeach country is not provided]

Inditex A Coruña/Spain Annualreportb

2012 61c 34.42 One of itsmostimportantstakeholders

Direct[Challenges andperspective/sustainablesupply chain]

1434 [During2012, 474suppliers areexcluded, 418are includedinto chain]

Purchases: Africa (Morocco)112; America (Argentina,Brazil) 68; Asia (Bangladesh,China, India) 672; Non-EUEurope (Turkey) 136;European Union (Spain,Portugal) 446

Marimekko Helsinki/Finland Yearbook2012

2012 40 12.74 Long-termpartners

Direct[Responsibleprocurement]

N/A [70% of theproducts aremade by the 25biggestsuppliers]

Manufacturing: EU countries(Finland 34%, the Balticcountries 31%, and Portugal11%) 79%; Non-EU countries(Thailand, China, India) 21%

Oberalp Bolzano/Italy Sustainabilityreport 2013[TheIndividual inFocus]

2013 87 11.49 Long-standingpartners

Direct[Implementationof sustainability/suppliers]

82 [38 Apparelsuppliers inSalewa group]

Apparel (Value in Euro) inSalewa: Bangladesh .34;China 26.32%; Germany.05%; Greece .38%; Indonesia4.96%; Italy 1.5%; Lithuania.24%; Myanmar 1.31%;Mauritius .30%; Turkey .29%;Vietnam 3.82%.

Puma Herzogenaurach/Germany

Business andsustainabilityreportb

2012 86c 27.90 [Strategicpartners]

Direct [Undersafe ecology, safehumanity]

500 Activefacilities in 42countries[Approximately47 of Tier 1factories arestrategicpartners]

N/A [Sourcing countries bynumber of audited Tier 1facilities are China (174),India (36), Vietnam (34),South Korea (12), Turkey(13), Bangladesh (11),Cambodia (11) and Argentina(8)]

Switcher Lausanne/Switzerland

Report 2011[Social,Environment,Economy]

2011 56 23.67 Stakeholders Direct [Undertraceability,social issues,environment]

21 suppliers Production Factories: India70.9%; China 14.3%; Romania7.4%; Portugal 5.7%; Turkey0.9%; Taiwan 0.8%

a The percentage of SSCM related content in the report is found through the word counts.b The report includes the disclosures on both business operations and sustainability issues based on GRI framework.c The number of page for only the sustainability related part of the report.

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 841

reported being proud of having such a long-term relationship. Forinstance, Calida stated that the company ‘‘relies on a small numberof long-term relationships with its suppliers. This means that 90percent of its products come from just five producers’’, whileSwitcher ‘‘favours a long-term partnership with its suppliers in

order to establish a relationship of trust and co-operation. Our rela-tionships last 6 years on average’’.

The number of globally dispersed suppliers varies based on thesize of companies. The most important suppliers are in developingcountries in Asia (China, India, Bangladesh, Cambodia, and Vietnam

Table 2Content analysis.

Firm Objective Performance Risks Improvement Communication Criteria (Compliance system,monitoring, auditing)

Calida Ensure the good manufacturingconditions, same quality, sameknow-how along the value chainand set long-term relationshipwith suppliers

Quality, continuity,monitoring andreporting, ecology,ethics, know-how

� Social: good manufacturingconditions� Environmental: product safety,

ecology, ethics, recycling, cross-docking system� Economic: quality, local eco-

nomic development, fair procure-ment prices and living wages

Training, know-howtransfer, helping suppliersto develop solutions,support

� Long-term cooperation withsuppliers on a partnership basis� Supplier visits, personal cooper-

ation, production rooms, con-sidering cross-culturaldifferences

� Mandatory/compliance to BSCIand Oeko-Tex Standard 100 [Thesuppliers showing no progress inspite of checks are excluded] [5of them signed conduct]� Due to a change of supplier or

late renewal of certificates only4 out of 13 suppliers have cur-rently been audited

Mango Maintain the compliance of Codeof Conduct and ‘‘made in Green’’certification among suppliers;Creating synergies throughout ourentire manufacturing chain

Quality, safety(laboratory tests),monitoring andreporting

� Environmental: cross-dockingsystem (reducing consumptionand costs), quality and safety inthe use of chemicals, networking(joined the Detox initiative beingpromoted by the Greenpeaceorganisation, which consists ofthe banning or substitution)

Training (CSR teams),technical support,exchanges of ideas

� Long-term collaboration/rela-tionship of mutual trust� Supplier visits

� Mandatory/Company’s Code ofConduct (Based on UN GlobalCompact, Universal Declarationof Human Rights, UN Rights ofthe Child, ILO)� First, the supplier’s written decla-

ration of the use of products andsubstances in manufacturing.Then, laboratory test on theselected samples. (Not apply – ifthe manufacturers provide theOeko-Tex certification for thefabrics) (Internal and ExternalAudit)

C&A Provide fair and honest dealing;Offering long-term prospects to itssuppliers and the greatest possibledegree of safety for all employees

Monitoring andreporting

� Social: good manufacturing con-ditions, child labour, discrimina-tion, migrant workers, CSR (TheC&A Foundation’s sustainablesupplier programme in Asia toimprove the well-being ofpeople)� Environmental: product safety,

hazardous chemical, organicfarming� Economic: contributing local

economy

� Training, advice andsupport, knowledgetransfer (forcompliance)� SOCAM held 7 work-

shops for buying office,38 in C&A’s own buyingcenters, 5 in-depth sem-inars for groups ofsuppliers

� Long-term, trusting businessrelationships with its contractpartners� C&A Fairness Channel (Direct

contact with top management),announcements, posters, valuechain conferences on organiccotton, using GIN in-housecommunication platform� 77 individual coaching sessions,

37 counselling meetings wereheld in 2011

� Mandatory/Compliance to Codeof Conduct for the Supply of Mer-chandise; Monitored by SOCAMteam; Oeko-Tex Standard 100� Quality Assurance System: Three

stages of Sampling inspection,Quality conformity check, Struc-tured quality checks for allsuppliers� SOCAM conducted 1724 audits in

25 countries

H&M Ensure high social andenvironmental standardsthroughout the value chain; setlong-term relationship and mutualgrowth

� Sustainability,quality, speed(lead times),prices, monitor-ing and report-ing, rewarding� Supplier sus-

tainability per-formance index(ICoC)increased from76.5 to 78.4during 2012

� Social: Wages, gender equality,worker’s rights, reduce overtimespromoting social dialogue, gen-der equality, CSR [Extended Allfor Children collaboration withUNICEF to include Bangladesh:5 year support one million peoplearound Dhaka (8 million USD)]� Environmental: Product safety,

working on taking the Ginetexcare label standard; R&D Collabo-ration with chemical manufac-turers to find water-basedalternatives in leather produc-tion; Engaged 154 supplier facto-ries in energy efficiencyprogrammes; monitor water effi-ciency in factories

Training (for workers inBangladesh about theirrights/fire safety), empowersuppliers

� Close collaboration; long-term/strategic relations based ontrust and transparency� Clear communication, supplier

visits, providing the full list ofsuppliers, research [SupplierSatisfaction Survey (423) andInterviews with garment work-ers (9815)]

� Mandatory/Compliance to Com-pany’s Code of Conduct (Sustain-ability Team work directly withsuppliers to support them incomplying it)� Initial Assessment: New partners

must comply the minimumrequirements, after training ifthere is a progress, a compliancescreening process starts, then anin-depth head audit is conductedby company auditors; Meetwastewater quality of Businessfor Social Responsibility WaterGroup� Conducted 2646 audits and 1588

management system analyses atsupplier factories/485 audits atpotential supplier factories

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� Economic: contributing to eco-nomic growth, jobs and stability,CSR [Together with IF Metal(Sweden’s largest union), startup a project on labour relationsand trained 179 human resourcepersonnel in Cambodia]; net-working (CEO met the Banglade-shi Prime Minister about wages)

Inditex � Strengthen and ensure a sus-tainable supply chain, but alsostriving for a positive impacton the communities where thisis located� Following the framework of

the strategic plan, SustainableInditex 2011–2015

Competency,monitoring andreporting

� Social: child labour, fire preven-tion, networking (Signed a letteraddressed to the Prime Ministerof Bangladesh calling attentionto fire prevention)� Environmental: water manage-

ment, networking (A member ofthe ETI)� Economic: Creating a positive

social and economic impact thatcontributes to the developmentof the communit; networking(Signed with IndustriALL ‘‘Proto-col to specify the role of tradeunions in the enforcement of theIFA within Inditex’s supplychain’’)

Training (113 externalauditors were trained usingthe procedures carried outby Inditex)

Aid direct communication with itssuppliers and multilateral dialoguewith the bodies and institutionsthat work in these areas

� Mandatory/Compliance to theCompany’s Code of Conduct forManufacturers and Suppliers(The Ethical Trading Initiative,the UN Global Compact and theFramework Agreement withIndustriALL Global Union); Indi-tex’s Chemical Substances Guide� Updated the Code by incorporat-

ing best practices� Pre-assessment (113 audits);

Social audits based on Code ofConduct and the Tested to Wearmethodology (3513); The Correc-tive Action Plans (from 6 to24 months)� Auditors were accredited by SAI

as SA8000 auditorsMarimekko � Objective: Ensure the high

quality of products as well asresponsible operationsthroughout the supply chain(strategic suppliers in riskcountries covered by BSCI andaudited by the end of 2015)� Following corporate responsi-

bility strategy for the period2011–2015

Audits, suppliercertification

� Social: working conditions,human rights, the transparencyof the supply chain, child labour,fair pay, working hours; network-ing (Joined the ResponsibleSourcing Network Initiativeagainst child/forced labour inUzbekistan)� Environmental: networking

(Joined the Nordic InitiativeClean and Ethical project coordi-nated by the Nordic FashionAssociation)

N/A N/A (Overall communication withstakeholders)

� Mandatory/Company procure-ment contract (BSCI’s Code ofConduct); Use certified suppliers(the ISO 9000 and ISO 14000, SA8000, Öeko-Tex Standard 100,BSCI Audited)� Joined BSCI and committing itself

to increasing supplier factoryaudits� Marimekko aims to use certified

suppliers and to invite suppliersto join the BSCI auditing system(18 suppliers-ISO 14000; 4 sup-pliers-SA 8000; 10 suppliers-BSCIAudited)

Oberalp Establish a stable and well-functioning supplier network thatpursues common aims andengages in a continualcollaborative exchange with itsmembers

Compliance,monitoring,auditing

� Social: social aspect/socialresponsibility [One of the fourCSR project team’s working groupfocus on supply chain (5 people);CSR Projects in Bolivia for livingconditions], corruption, labourconditions, child labour, discrimi-nation, wages, overtime,transparency� Environmental: safety,

environment

N/A Regular contact andcommunication, meeting (SupplierConventions in every 2-3 years),involving suppliers into companymanagement information system

� Mandatory/Company’s Code ofConduct (Based on ILOConvention)� Updated the Code of Conduct� CSR Supplier audit: Regular

checks by management and qual-ity assurance team; After factoryself-assessment form, productionfacility inspection (audit-docu-mentation), the preparation ofCorrective Action Plan to ensurecompliance with requires stan-dards (Till April 2014, completingaudits on 60% of production),CSRteam involved in supplierselection

(continued on next page)

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Table 2 (continued)

Firm Objective Performance Risks Improvement Communication Criteria (Compliance system,monitoring, auditing)

Puma � Objective: Improve the social,working and environmentalconditions both at our supplierfactories around the world andwithin PUMA’s own operations� Following Puma Environmen-

tal Policy

The PUMASustainabilityCharter – PUMA’s2015 Scorecardperformance target,Compliance,monitoring,auditing

� Social: working conditions,wages, health and safety, net-working (Engaged with the Gar-ment Manufacturing Associationof Cambodia and the AAFA inCambodia); CSR for improvingwages in Asia (e.g. The HumanResources Management SystemsProject)� Environmental: sustainable prod-

ucts, consumers’ environmentalfootprints, energy efficiency, net-working (In Vietnam, PUMAcooperated with the GermanDevelopment Cooperation toensure environmental andefficiency)� Economic: CSR (Play Fair Cam-

paign had its third re-launch inthe Olympic Year 2012, high-lighting problems in the globalsupply chains of sporting goodscompanies)

Training on environmentalperformance (ConserVproject in Vietnam, 58PUMA suppliers weretrained by resourceefficiency), Seminars andtraining for 292 staff, 58factory

Environmental performance datacollection (semiannually);Presentations, open discussions,trainings and best practice sharingin Bangladesh, Taiwan, Vietnamand China were organized as aplatform for exchanging andstrengthening our joint expertiseand communication aboutsustainability

� Company Code of Conduct andmanuals of standards (Based onILO); Higg Index (assess environ-mental sustainabilityPerformance)� PUMA.Safe monitoring; monitor-

ing program that continues to beaccredited by the FLA� A member of the Sustainable

Apparel Coalition since 2011. In2012, PUMA tested 13 apparelproducts under the HIGG Index� 422 factory audits covering 380

facilities [62 percent of allaudited facilities globally wererated A or B+]� Finalization of the Standard Oper-

ating Procedure and the forma-tion of the National FOA ProtocolCommittee

Switcher � Objective: to improve theworking conditions and livesof workers throughout theworld

Compliance,monitoring,auditing,Managementsystems,traceability (labels),transparency

� Social: wages, working hours andovertime, health and safety, net-working (FWF developed a web-based tool in 2011 to help brandsand factories gradually improveworkers’ wages; the Max Have-laar label legitimises Switcher’ssocial approach on wages), CSR[Switcher Foundation weregranted to projects in the Tirupurand Burkina Faso (schools, clinic,fresh water, etc.)]� Environment: water saving,

waste management

Training (Compliance Days– meetings)

� A long-term partnership for arelationship of trust and co-operation� Open dialogue, meeting (Com-

pliance Days), providing the fulllist of its suppliers

� Mandatory/Suppliers’ Code ofConduct (Based on ILO Conven-tion/UN’s Human Rights, FWF’sCode of Conduct); Oeko-Tex Stan-dard 100; SEDEX/SMETA auditreport; self-assessment ofsuppliers� The CSR department is involved

in the decision-making processwhen choosing new suppliersand audits� The company was audited by

FWF (Local FWF teams audited 3units in India)

Abbreviations: AAFA, America Apparel and Footwear Association; BSCI, Business Social Compliance Initiative; CEO, Chief Executive Officer; CSR, corporate social responsibility; ETI, Ethical Trading Initiative; FLA, Fair LaborAssociation; FWF, Fair Wear Foundation; IFA, ILO, International Framework Agreement; International Labour Organization; R&D, Research and Development; SOCAM, Service Organisation Compliance Audit Management; SAI,Social Accountability International; SEDEX/SMETA, Supplier Ethical Data Exchange; UN, United Nations; UNICEF, United Nations Children’s Fund.

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SCM for Sustainable

Products

SSCM- Core objective: Ensure high social and environmental conditions along supply chain (9)- Strategic Approach on SSCM (3)

SCMfor Risk and Performance

Supplier Assessment Plan

Product Life Cycle Assessment

Avoding Risks (9)

Improving supply chain performance (9)

Speed (1)Dependency Flexibility

Quality (3)Economic (5) Environmental (9) Social (8)

Improving Suppliers (7)

Training (7)

Communicating with Suppliers (8)

Criteria for Suppliers (9)

Environmental Social

Compliance to the

System/ Monitoring/

Auditing (9)

Emphasizing Benefits(3)Networking (6)

Code of Conduct

(Based on BSCI, Oeko-Tex

Standard 100,UN Global Compact, Universal

Declaration of Human Rights, UN

Rights of the Child, ILO

Convention,ETI, the

Framework Agreement with

IndustriALL,Global Union,FWF’s Code of Conduct etc.)

Supportive activities[e.g. Empower, help,

support, techical support, advise] (5)

Knowledge transfer[e.g. Know-how, knowledge on compliance/ environment] (3)

Methods [e.g. Seminar, workshops, meetings]

(3)

Long-term relationship(5)

Methods [e.g.Visits, personal cooperation, production rooms,

announcements/posters, value chain conferences, in-house communication

platform, research] (6)

Other components [e.g. Continuity/ ecology/ ethics/ know-how, safety, sustainability/ prices/ lead times, competency, traceability (labels), transparency] (5)

CSR (5)

Fig. 2. A Map of sustainable supply chain management in textile and apparel sector. Note 1: The new categories that are proposed as a result of this analysis are shown in darkshapes and their links to the original theoretical model are shown by dashed lines; the numbers assigned to each shape indicate the number of companies that are activelydoing this activity; the categories that are not observed during the analysis (e.g. Dependency, Flexibility) are exhibited with a dashed box on the figure Note 2: Business SocialCompliance Initiative (BSCI); corporate social responsibility (CSR); Ethical Trading Initiative (ETI); Fair Wear Foundation (FWF); International Labour Organization (ILO);supply chain management (SCM); sustainable supply chain management (SSCM).

D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849 845

etc.), some new EU members (Bulgaria, Hungary, Romania, Poland,etc.) and candidate states (Turkey). Besides these, some companieslike Inditex, Marimekko, and Calida have suppliers from Europe aswell. Due to the bad reputation of working conditions in develop-ing countries and the positive environmental impact of proximitysourcing, working with European suppliers can become a distin-guishing feature within a company’s SSCM approach.

Analysis and mapping

Table 2 presents the analysis of reports based on the five dimen-sions of Seuring and Müller’s (2008) framework. Based on thesefindings, the theoretical framework (shown in Fig. 1) was also re-vised and reconfigured for the sector (Fig. 2).

Objective of SSCMIn parallel to the increasing importance of supply chains in sus-

tainable development, most companies pay special attention toSSCM. As stated above, in Calida, supplier management was theprimary activity during the reporting period (2011). The mainobjective of SSCM was to ensure good manufacturing conditionsthroughout the value chain to reduce the environmental, laborand social impacts of business operations. In doing so, while somecompanies underline the importance of standardization along thechain (in Calida, for example, it is about ensuring the same workingconditions, quality and know-how) through compliance and certi-fication (Mango, Marimekko), some others emphasise the creationof a long-term relationship (Calida, C&A, and H&M), or collabora-tive exchanges with a well-functioning these companies (Inditex,

Marimekko, and Puma) mention the adoption of a long-term stra-tegic perspective in their SSCM approach.

RisksAnalysis of the reports shows that this component of SSCM is

critically important for the companies. Due to the labour-intensivenature of this sector, most organizations have expanded their oper-ations into developing countries but, as stated in H&M’s report,‘‘the challenge is that garment production is often located wherehuman rights are at risk and environmental awareness is lessdeveloped’’. It can be seen from the map in Fig. 2 that, while allcompanies mention environmental risks, 8 of them mention social,and just 5 indicate the economic risks in those countries. Somecompanies give specific examples of these risks and explain theirresponse to the problems. For instance, C&A discusses the prob-lems for working people in different contexts, from migrant work-ers in China to the sumangali system (a form of forced femalelabour to earn a sum of money as a dowry) in India, or the childlabourers and environmental problems of Uzbekistan’s cotton har-vest. Some of these problems are also on H&M’s agenda. In their re-ports, both H&M and C&A state that they are actively involved inthe solution of such problems in these countries. For instance, bothjoined a forum and project of the Ethical Trading Initiative (ETI)against the sumangali system in India. C&A is also a member ofthe Brands Ethical Working Group and funds a ‘terre des homes’project that aims to provide employment to 9000 young womenin the next 4 years. Regarding the child labour problem inUzbekistan, H&M (together with 60 other brands) signed a pledgefacilitated by the Responsible Sourcing Network. However, C&A,with deeper knowledge about the problems in this country (not

846 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

only child labour, but also the case of the Aral lake, pesticide andchemical use, etc.), decided to refuse to accept any cotton fromUzbekistan for its goods ‘‘until the situation is solved and transpar-ency of the entire process is given’’.

When reporting their presence in these developing countries,some companies try to explain the benefits of their operationsfor these countries. For instance, in their report, C&A claim that‘‘jobs created by the textiles and clothing industry secure theincomes of thousands of families. The ensuing economic growthincreases the standard of living in many regions by providingmarket access to manufacturers there’’. Similarly, Calida states that‘‘[s]ince the majority of Calida suppliers are located in economi-cally weaker regions, Calida is making a contribution to localeconomic development with its transfer of knowledge’’. H&Mstates that ‘‘contributing to economic growth, jobs and stabilityin our purchasing markets’’ is key for their existence in those coun-tries and ‘‘more than that, our strong presence in these countriesprovides us with the great opportunity to improve the lives ofhundreds of thousands of people and (to) help develop entire com-munities’’. However, some stakeholders may consider such men-tions of their contribution to local communities as a cynicalapproach considering how much these companies gain from theirpresence in developing countries in terms of decreased productioncosts and increased.

In sum, all these examples indicate that the companies usuallyuse three strategic tools to minimize the impact of threats andrisks in developing countries. The first one is networking activitiesthrough collaborating with other organizations in the same sector,joining international or national campaigns and projects, orgenerally following an accepted set of standards. Secondly, thecompanies try to reduce the negative impacts of such social, envi-ronmental or economic risks through corporate social responsibility(CSR) projects. The third important tool is to convince stakeholdersand legitimate current activities in developed countries throughemphasizing how the companies’ presence in these countries canbe beneficial for the local community. As Table 2 and Fig. 2 show,while 6 companies were involved in networking activities, 5 en-gaged in the CSR project.

Besides these strategic responses to risk, the companies heavilyconcentrate on the standardization of economic, social and envi-ronmental working conditions among suppliers through the lat-ter’s compliance in individual systems to monitor and audit theirinvolvement in the process. Recalling the original framework(Fig. 1), it can be seen that environmental management systemshave evolved into more diverse compliance systems (Fig. 2) forthese companies; that is, they usually develop their own codes ofconduct derived from various international standards, such as theInternational Labour Organization (ILO) Convention, United Na-tions (UN) Global Compact, Universal Declaration of Human Rights,etc., sector-specific organizations and guidelines (e.g. Oeko-Tex100 standards, Fair Wear Foundation), and other initiatives (EthicalTrading Initiative (ETI), Business Social Compliance Initiative(BSCI)) to try to increase the adoption of the company’s code ofconduct among its suppliers. As summarized in Calida’s report,

[a]bout a third of Calida’s finished products come from coun-tries which are riskier in terms of quality, working and environ-mental standards. Calida aims to ensure that the basic rights ofemployees are also protected in these countries and that dueconsideration is given to the environment. To this end Calidahas developed a Code of Conduct which deals with issues suchas child labour, discrimination, voluntary labour, working hoursand fair pay.

Thus, developing and updating a code of conduct and monitor-ing its adoption by suppliers have become the major activity in

SSCM for all companies. A significant part in each report is devotedto explaining this compliance system, and this is not only becausethese systems are used to avoid risks; rather, companies usestandardization in order to improve the overall supply chain per-formance and set significant sustainability criteria for their suppli-ers. For this reason, Fig. 2 locates compliance, monitoring andauditing activities in SSCM at the heart of all three dimensions inthe model.

PerformanceAs stated above, requiring compliance with a code of conduct

and then monitoring and auditing whether suppliers operationsalign with these principles is also the main focus in improving sup-ply chain performance. In their reports, companies mention theneed to reach a standardized performance along the chain to in-crease quality (3) and speed (1) of operations, as well as someother issues (5) like continuity, ecological and ethical consider-ations, know-how, safety, sustainability, prices, lead times, trace-ability and transparency. Regarding performance indicators, thecompanies usually provide environmental data for energy andwater use along the supply chain, waste reduction activities, etc.,while some companies, namely Calida, C&A, Mango, Marimekkoand H&M, briefly mention environmental performance, Inditex,Switcher, and Puma provide detailed information on the issue.

In its report, H&M repeatedly states that it rewards suppliersbased on their sustainability involvement, which is certainly a un-ique approach to the improvement of supplier performance.Although it seems that suppliers’ improved performance is re-warded with more business, the company explains that ‘‘as a result,our some 150 strategic partners make more than 50 percent of ourproducts’’. Thus, although it is presented as a reward, demandingmore from a good performer is not a reward at all – it is just thenature of doing business. In order to call something a reward, thesupplier should gain something more than usual.

Although all companies accept the importance of compliance toa system, their responses breaches identified during audits vary.For instance, while Calida reports that it can exclude non-compliantcompanies immediately, Inditex replaces its former ‘‘D’’ rating witha new ‘‘CAP’’ (Corrective Action Plan) to improve factories thatreceived a ‘‘D’’ rating in 2012 since ‘‘Inditex believes that the bestway to improve a factory is to support it during the process at alltimes, leaving the possibility of suspending the relationship as alast resort’’. Although improving and revitalizing the relationshipwith an existing supplier (instead of finding a new one) might bein line with recent trends in the fast fashion sector, companiesshould determine minimum acceptable standards and endrelations when performance below threshold values. Consideringaccidents due to poor workplace safety standards, particularlyduring the last year, companies could adopt a stricter approachto their supply chains.

Criteria for suppliersAs explained in the previous section, the compliance and the

commitment of suppliers to a code of conduct is viewed as the ma-jor task in SSCM to reduce risks and improve supplier performance.The code of conduct can also function to set social and environ-mental criteria for suppliers. For instance, Calida expects its suppli-ers to comply with Oeko-Tex Standard 100 and BSCI’s Code ofConduct to ensure product safety and environmental and sociallyresponsible manufacturing conditions, covering the issues likerespect for national laws, non-discrimination, collective bargainingrights, fair wages and working hours, health and safety at work,prohibition of child or forced labour, environmental and safetymanagement systems etc., In contrast, Mango has developed itsown code of conduct to ensure adequate compliance with all

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labour, social and environmental standards on the part of manu-facturers of its garments and accessories, while Switcher hasadopted the Fair Wear Foundation’s Code of Conduct, which pro-vides guidelines for its textile suppliers in areas such as labourrights and conditions. According to C&A’s report, since it can be dif-ficult to prove certain infringements and irregularities, like briberyand corruption, such companies impose monitoring and auditingprocedures on their global suppliers to encourage a genuine com-mitment to ethical behavioural norms.

CommunicationIn their reports, almost all companies emphasise the impor-

tance of establishing long-term relationship with suppliers; someof them particularly mention their desire to create mutual trust(e.g. C&A, H&M and Switcher) and build up specific know-how be-tween the parties (Calida). Communication is the key to create andsustain such a relationship with suppliers. Therefore, all companies(except Marimekko) indicate their focus on supplier communica-tion, with 6 of them briefly listing their communication methods.For instance, since 2005, Switcher has organized biannual Compli-ance Days to provide its suppliers with training and updates, whileOberalp Group has organized Supplier Conventions every2–3 years to inform its suppliers about new developments. Onthe other hand, Calida and H&M use a wide range of tools to com-municate, including visits, personal cooperation, production roomsand research. Of these companies, C&A gives significant attentionto supplier communication, using an in-house communicationplatform called General Information Network (GIN) to inform sup-pliers about quality assurance standards; it also uses communica-tion to uncover ethical misconduct in suppliers operations. Basedon its First-to-Know policy, C&A has created a communicationchannel for whistle-blowing, the C&A Fairness Channel, which pro-vides direct access to a top management team in Europe to notifythem about critical issues concerning the company’s economic andethical integrity. The company use also announcements like no-tices and posters to inform suppliers about misconduct, such asbribery, fraud, nepotism, exploitation, discrimination and sexualharassment.

Since suppliers in the sector are now widely distributed acrossmany countries with different cultures, companies may need toadopt a cross-cultural perspective in their communication ap-proaches. This is particularly important considering cases whereinternational operations have failed due to culture clashes. To pre-vent such problems, Calida, for example, informs its suppliers inChina and India about its product quality standards in the face of thechallenge of cross-cultural differences regarding know-how transfer,while trying to understand the suppliers’ point of view in Asia.

Communicating information about supply chain operationswith other stakeholders has become important for a number ofcompanies. In order to ensure transparency in communicating onsupply chain issues, some companies, such as H&M and Switcher,have started declaring the name of their suppliers, while otherslike Oberalp have begun preparations to provide all informationabout their suppliers and individual factories. This policy of trans-parency is seen in several reports. For instance, both H&M andInditex give their reaction to the tragic fires in Bangladesh garmentfactories. Inditex specifically gives details of the recent fire inDhaka, Bangladesh on January 26, 2013 at one of its supplierfactories and the company’s response to the accident. It cancelledits relationship with the supplier concerned. According to mediareports, after the Rana Plaza building collapse on April 24, 2013in Bangladesh, various companies, including H&M, C&A and Inditexstarted work on an agreement concerning fire and building safety(Ek & Kane, 2013). Puma reported details of a strike for improvedbenefits at its supplier in Cambodia (Kaoway Sports Ltd) onFebruary 20, 2012. As the report explains, although ‘‘the factory

management agreed to meet the workers’ demands’’, the protest-ers brought down the gates of the company and, as a result, threefemale workers were injured by gun shots of the military authori-ties. In its report, Puma describes how these wounded workerswere recovering, stating that ‘‘throughout the year, Puma workedwith industry peers and local stakeholders as worker unrestcontinued to become increasingly violent’’.

ImprovementsAs with the previous category, improvements are explained

very briefly or not at all in the reports. Marimekko and Oberalp,for example, provide no information about supplier improvements.For other companies, training becomes the main activity forinforming suppliers and improving their performance. Beside this,the companies state that they support their suppliers (5) throughempowerment, helping them develop solutions, advising and pro-viding technical support, and enabling knowledge transfer (3) oncompliance and environmental issues.

Conclusion

As H&M’s report puts it, all companies today want to be ‘‘a lea-der in terms of innovation, sustainability, and of course, great fash-ion’’; however, as product ranges and the need for externalsuppliers grow, it is becoming increasingly difficult for companiesto manage and monitor their supply chain activities and ensurequality standards along the chain. In the fast fashion industry,companies usually procure their raw, semi-finished and finishedmaterials from developing countries in order to take advantageof low input costs. However, this opportunity turns into the mainchallenge in the current state of SSCM because the social and envi-ronmental conditions of their suppliers in developing countries arenot as good as those in developed countries. This means there is al-ways a risk for the company, and it seems that all these companieshave calculated possible return and initially decided to accept thisrisk. However, considering the increasing social and environmentalconcerns among consumers and society at large, the risks involvedin supply chain operations have increased so that they are startingto threaten their reputations, and financial returns. Therefore, mostcompanies today in the fast fashion industry have started to focuson SSCM activities. This study attempted to conceptually map theircurrent SSCM approaches using a theoretical model to reveal theiroverall approaches to sustainability.

The results of the study reveal that the companies pay signifi-cant attention to reporting their sustainability activities in SCM.Using Seuring and Müller’s (2008) model, the study shows thatthese companies particularly focus on integrating suppliers intotheir system so that they adopt their sustainability approach ade-quately. In doing so, they have developed their own codes of con-duct based on generally accepted principles of the world businesscommunity or society at large, and expect significant commitmentand compliance from their suppliers. Additionally, the companiescarefully review the progress of these suppliers through monitor-ing and auditing activities during the reporting period. Therefore,it can be claimed that compliance, monitoring and auditing arethe main component of current SSCM to avoid risks, improve sup-ply chain performance and set clear criteria for suppliers.

Although these independent initiatives have significantly im-proved sustainability practices in the sector, it seems that thereis still a lot to do for the concept to be internalized by companiesthroughout the supply chain and embed them into the core philos-ophy of the triple bottom line. There is a need to adopt a macroperspective and implement sector-wide strategies that lead to adeep restructuring along company supply chains that wouldenable a performance paradigm change in the industry (De Brito

848 D. Turker, C. Altuntas / European Management Journal 32 (2014) 837–849

et al., 2008). For instance, companies in the sector could integratetheir code of conducts into a single sector-specific framework anddevelop an overarching set of principles on SSCM. This would notonly be important to provide a coherent and consistent compliancesystem for existing and potential suppliers in all countries, butwould also help overcome the problems caused by the fragmentednature of current compliance systems. In the long run, increasingcooperation and collaboration among the actors in the sector canalso help in the transition to a sustainability paradigm (Pookulang-ara & Shephard, 2013) and to disseminate the main idea of sustain-ability to all relevant stakeholders.

Companies can also develop various strategic responses to re-duce risks. While actively communicating their contributions tothe local public and workers in the suppliers’ countries, companiesare involved in CSR or networking activities. Considering theincreasing demand for suppliers, it might be expected that compa-nies can proliferate and enrich their activities and find new ways ofbeing sustainable along the chain. For instance, following thesuggestions of Saicheua et al. (2012), they might actively involveconsumers as the final step in the supply chain through macro-marketing strategies. As a long-term strategy for all companies inthe sector, changing consumer preferences and creating positiveattitudes towards sustainability can ultimately increase the overallsustainability performance of sector. Particularly those companiesproducing luxury fashion products can take a leading role in initi-ating such a change in the sector (Joy, Sherry, Venkatesh, Wang, &Chan, 2012).

Power in the fast fashion industry has shifted towards consum-ers from retailers (Barnes & Lea-Greenwood, 2006), so if they de-mand sustainability, it will supposedly have a strong impact onindustry practices. For instance, the recent trend for slow fashion(Fletcher, 2010; Johansson, 2010; Pookulangara & Shephard, 2013)aims not to eliminate fashion and clothing from consumers’ livesbut to change the way it is realized today. However, consideringthe increasing demand of consumers for fashion products andthe desire of producers to obtain better financial results, it mightbe expected that the slow fashion concept cannot be widely recog-nised by the sector’s leaders. Given the sustainability challenges ofthis sector due to the expansion of its operations throughout thedeveloping world, companies might try to find new solutions andtake other measures to remain sustainable yet still fast.

This study is subject to several limitations. The first is the sam-ple size. Although it provides useful insights for both scholars andpractitioners, there is a need for new studies that deepen the re-sults of this study by analysing more company reports and othercompany documents. Second, since the study relies only on com-pany reports, it shares the limitations of similar studies analysingcompany publications, namely that words might speak louder thanactions. Siegle (2013) states that ‘‘fashion brands are peculiarlygood at constructing their own reality and narrative. After all,that’s why millions of consumers love them with slavish devotion’’.Therefore, qualitative research like the current study should bebacked up with further quantitative studies. Studies based on realdata about suppliers or measurements of actual sustainability per-formance can further the discussion in the literature and help prac-titioners determine their own weaknesses in order to improvetheir performance.

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