what environmental issues Primark has been facing and their implications for its business

Case study -

What Primark is doing to produce clothing with the least amount of harm to the environment

Outside of its sustainable cotton programme, Primark has been working hard on what good guidance looks like and is searching for ways to decrease its overall water usage, chemical usage, waste production to help protect the environment. As part of one ABFs five pillars of corporate responsibility looking after the environment manufacturing its products with as little harm as possible to the environment remains one of the Primarks key sustainability goals.

Our aim is for all our stores to be as sustainable as possible with the technology and infrastructure thats available at the time (Katharine Stewart, Primarks Director of Ethical Trade & Environmental Sustainability)

Primark is committed to reducing the impact of our operations on the environment and has implemented a number of sustainability initiatives across the business, including environmental health and safety audits, energy audits, central building management system to optimize energy consumption, LED lighting, extensive employee training, extended producer responsibility measures and waste recycling programmes, explains Katharine Stewart, Primarks Director of Ethical Trade & Environmental Sustainability. For example, Primark has a team of specialist auditors who conduct audits in all of its stores across 11 countries. The team works together to make sure each location is fully compliant with the regulatory requirements and that the value retailer continues to meet accepted good practices within the retail industry. The audits include onsite waste management practices, review of store emissions and ensuring all equipment is properly maintained.

Primark also conducts energy audits in all its stores and reviews how much energy each store consumes. The value retailer was even awarded the Carbon Trust Energy Standard 1 in recognition of its continued commitment to energy efficiency in its stores in 2014. Thanks to its energy-efficiency projects, Primarks store energy intensity, which is measured by kilowatt-hour (kWh) per square foot, has been reduced by 11 percent since 2015. Primark has saved approximately 30 million kWh of energy through its bespoke software system called ERICC (Energy Reduction Information and Control Console). The ERICC system offers real-time information on the primary energy drivers within any store and indicates how a store should be performing from an energy management point of view. All Primark staff complete online training as part of their induction on Environmental Health and Safety, adds Stewart. This includes guidance on onsite environmental health and safety issues, as well as waste and energy management.

In addition, Primark has also achieved the Carbon Trust Standard for Waste for its waste management systems in store and is working to assume direct control over as much of its recyclable materials used during packing and transport as possible. For example, Primark established a resource recovery unit in its German depot centre in July 2015, where cardboard, plastic and hangers are collected from its Northern European stores to be reprocessed and sent for recycling. The value retailer has had a similar system in place in the UK for a number of years now, which ensures all recyclables are collected from its stores via its delivery trucks and transported back to the central distribution centre. As Primark has become more actively involved in the recycling process of its materials, it has been able to significantly reduce the volume and frequency of waste collections at each store and aims to expand this system to additional regions. Last financial year, 94 percent of waste generated by all of Primarks stores and warehouses was recycled or beneficially reused, points out Stewart.

What Primark is doing to cut down its use of chemicals

Outside of energy, waste and water management, Primark has also begun to look further down the supply chain on how it can help fabric mills decrease their chemical usage. This way the value retailer can manage its chemical usage before the material even arrives at garment factories. Part of Primarks chemical management requirements includes two restricted substance lists 12 - Product Restricted Substance List (PRSL) and a Manufacturing Restricted Substance List (MRSL), which detail the limits for chemicals usage in the materials used to make its products, including dyeing and washing. In 2014 Primark signed up to Greenpeaces Global Detox Campaign 13 and committed to phase out the use of certain harmful chemicals by 2020. In 2015 the value fashion retailer was recognised as a Detox leader by Greenpeace and joined the Sustainable Apparel Coalition (SAC), committing to use SACs sustainability tool, the Higg Index, to help drive sustainable improvements across its supply chain. Apart from joining SAC and the Greenpeace Detox Campaign, Primark also joined the initiative Zero Discharge of Hazardous Chemicals (ZDHC) together with 22 global apparel retailers. Together the group has created a list of restricted manufacturing substances, developed audit protocol tools and waste-water quality guidance and are in the process of creating a common training tool on chemical management. By encouraging mills to use less chemicals in the dyeing or processing of the fabrics, Primark is driving sustainable change further down the supply chain to lead to sectoral change.

Our objective is to have full traceability from all Primark supply chain partners of upstream manufacturing, product and chemical inventory information for every point in the supply chain (Primarks Chemical Management Programme Roadmap, 2015/2016)

Primark also supports the Partnership for Cleaner Textile industry (PaCT), a holistic programme which supports the Bangladesh wet textile processing factories in adopting cleaner production methods. Twelve factories have already benefited from the programme to date, and an additional seven are currently benefitting from the PaCT training through Primarks nominations. The training focuses on denim and jersey production, paying attention to the environmental impact of the main technologies used during the dyeing and washing processes. We actively engage with our suppliers, chemical experts, other retailers and organisations to help bring about sustainable change, states Primark in its Corporate Responsibility Report 2016. We provide suppliers and their factories with formal training, tools and support to enable improvements to be made throughout the manufacturing process.

However, in spite of the numerous initiatives Primark has undertaken to combat its chemical usage, the value retailer may not be able to reach its Detox commitment to Greenpeace by 2020. Please note, Greenpeace no longer recognized Primark as a Detox Leader, says FitzGerald. The most recent report released in July 2016, ranks Primark in Evolution Mode, with Greenpeace stating that although the brand performs well on the elimination of perfluorinated chemicals (PFCs) and transparency, it fails to take individual responsibility for the main tools it needs to meet its Detox 2020 plan. The report notes that Primark chooses to rely on the ZDHCs flawed methodology, which means the retailer is not selecting new target chemicals for eradication, or ensuring when it does test for their elimination, it is as close to possible to zero. Greenpeace encourages Primark to adopt a clean factory approach, which sees chemical elimination targets applied to suppliers entire factory floor and not just to Primarks own production lines.

The steps Primark is taking to improve garment workers wages

As a leading member of Ethical Trading initiative (ETI), Primarks Code of Conduct is founded on the ETI Base Code which stresses that wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmarks, whichever is higher. In any event, wages should always be enough to meet basic needs and to provide some discretionary income. Primark states it requires all its suppliers to adhere to this definition for all workers within its supply chain. For the value retailer, a living wage is seen as one which includes the total cost of living, healthcare, food, education and housing. Primark adds that it does acknowledge the inherent challenges in defining and calculating a living wage, but it believes that a negotiated approach remains the most practical and sustainable move and supports the development of all industrial strides taken to achieve this.

For example, Primark is a founding member of Action, Collaboration, Transformation (ACT) 9, an initiative consisting of other retailers, manufacturers and trade union IndustriALL which aims to improve wages by establishing an industry collective bargaining power in key sourcing countries such as Cambodia and Bangladesh. ACT aims to uphold world class manufacturing standards as well as responsible purchasing practices. Primark stresses that its programmes aim to help its workers have better livelihoods. At the moment Primark is developing a holistic strategy aimed at improving wages, which includes country-specific approaches. The strategy aims to build on its current pilot programmes while building on key areas of focus, such as factory improvements, worker empowerment and benchmarking supplier performance. Another key initiative to help its workers manage their finances sees Primark partnered with banking service Geosansar in India.

Acting as an agent and intermediary between banks and customers, Geosansar and Primark have aided workers in opening a bank account for the first time. In order to ensure garment workers can have easy access to their bank accounts, Geosansar bank kiosks are located close to factories and worker communities. The partnership, which sees Primark and Geosansar also provide financial education, as well as access to banking, has helped over 400 workers.

But is Primark doing enough to boost wages for garment workers?

While Primarks work does show that the retailer is committed to improving wages for its garment workers, the value retailer seems to be stuck at the strategy level and research stage and has yet to begin developing long term building blocks to paying liveable wages. For example, Cambodia was the first country in which the ACT initiative began its first process to develop an industry-wide collective bargaining for higher wages. In September 2015, an ACT delegation, which consisted of IndustriALL and leading representatives from Primark, H&M and Inditex travelled to Cambodia to meet with suppliers, garment unions, the Labour Ministry and the Ministry of Commerce and the garment manufacturers association of Cambodia. However, since then there have been no further updates or concrete outcomes on record of what exactly has been done to date. Work is in the early stages, notes Stewart, so it has yet to be seen what, if any achievable impact, the initiative has on the wages of garment workers.

So while Primarks work does show that the retailer is committed to improving wages for its garment workers, the retailer seems stuck at the strategy level and research stage and has yet to begin developing long term building blocks to paying liveable wages. Brands should take wages out of the competition and start working together on payment of a living wage, stresses Tara Scally, Dutch Campaign Coordinator Clean Clothes Campaign. Fair Wear Foundation has done interesting research revealing the possibilities. Brands could also work together on other labour rights issues, such as supporting labour unions, setting up worker committees, setting realistic workloads and working hours...Primark should be more transparent in their sustainability efforts. Publicly showing their wage calculations would be a good start.

One brand cannot single-handedly raise wages for the workers who make their clothes (Lotte Schuurman, Communications Officer at the Fair Wear Foundation)

Other Non-Governmental Organisation (NGOs) agree that the key to implementing fair, liveable wages within the industrys supply chain lies within collaboration. One brand cannot single-handedly reduce overtime or raise wages for the workers who make their clothes, says Lotte Schuurman, Communications Officer at the Fair Wear Foundation. Brands can work very hard on improving their purchasing practices on forecasting, on production planning all of which can reduce their risk of causing overtime but if they are a small player and other brands have poor management practices, the results on the factory floor can still be disappointing. Thats why collaborative action is so important. Where possible we encourage our members and all other garment brands to increase leverage. Hence whenever we see that there are more member companies sourcing from the same factories, we encourage them to exchange information on audits, remediate together and cooperate on further improvement plans.