The global denim industry continued to grapple with unethical business practices and a lack of buyer accountability, according to a latest global report.

The Ethical Denim Council (EDC), a US-based non-profit organisation, released its 2024 State of the Denim Industry report this week, titled ‘An Unchanging Landscape of Change’ highlighting persistent ethical challenges and stresses the need for systemic reform within the denim supply chain.

Building on last year’s examination of supplier struggles, the second edition expands its focus to include insights from over 1,500 factory workers in Bangladesh and Pakistan, 49 consumers, and seven brand employees.

The findings reveal significant gaps between ethical commitments and real-world business practices, underscoring the urgent need for greater accountability and transparency across the industry.

The survey revealed considerable differences in awareness among factory workers.

In Bangladesh, 100 per cent of workers understood supplier requirements, while nearly 58 percent of workers in Pakistan lacked awareness.

Despite this gap, most workers in both countries agreed that brands should be held accountable once an order is approved. However, brand employees remained divided on the issue.

Order cancellations emerged as a major concern, with 66 percent of workers in Bangladesh and 50.4 percent in Pakistan stating that cancellations put their livelihoods at risk.

EDC noted that such disruptions often have severe consequences for workers, stressing the need for greater transparency and safeguards against unethical purchasing practices.

Though all groups expressed strong support for ethical practices, EDC found significant gaps in how these values are applied consistently in daily business operations.

The report highlighted four key themes: awareness of buying practices, buyer accountability, impact on workers, and collaboration to create a fairer industry.

According to the report, factory workers and consumers are pushing for clearer, enforceable rules to hold brands accountable for their purchasing practices.

While progress has been made in consumer awareness and advocacy for ethical practices, the challenge remains in translating these values into consistent, industry-wide standards that protect workers and ensure fairness across the supply chain, it added.

Though regional differences suggest that factors such as workplace conditions, economic pressures, or operational stability may influence how risks are perceived, EDC stated that supplier data indicates these disruptions can lead to adverse outcomes for workers.

‘Across both countries, the findings emphasise the need for a deeper understanding of how such risks are managed within factories and the ripple effects of order disruptions on worker welfare. Addressing these challenges requires greater transparency and systems that mitigate the impacts of cancellations and other unethical practices,’ the report said.

‘The majority of workers in Bangladesh and Pakistan believe the industry should unite to stop unfair buyer requests.’

Brand employees, however, view buyer requests differently. The survey found that most take pride in their company’s operations and expect a degree of flexibility from suppliers.

The report said that four out of six brand employees believe their company expects suppliers to accept purchase order changes as part of normal business operations.

The disparity between brand values and operational reality underscores the challenges of translating ethical ideals into concrete actions, EDC said.

The report also found that consumers want to shop ethically, as 55.1 per cent said they were extremely unlikely to purchase from a fashion brand that engages in unethical purchasing practices.

However, the affordability of ethical and sustainable fashion remains a challenge for consumers, even those who express a strong interest in ethical practices, it added.

The survey revealed that 71.4 per cent of consumers are unaware of buying practices such as cancellation policies, and 53.1 per cent are unfamiliar with brands’ and retailers’ rules of engagement with suppliers.

However, 77.6 per cent of consumers agreed that buyers should honour payment terms even for cancelled orders.

The report also found that consumers lack full awareness of the complexities of garment manufacturing, highlighting opportunities for greater transparency and education within the industry.

The EDC also outlined its plans to tackle ethical challenges, starting with securing support for the Non-Cancellation Compliance Clause, developed in collaboration with the Responsible Contracting Project.

The clause aims to protect suppliers from financial instability caused by order cancellations and changes.

Additionally, the council is preparing for a conference that will bring together brands, suppliers, workers, advocates, and government officials to discuss actionable solutions and policies.

‘Listening to those whose livelihoods are directly impacted by unethical practices within the denim industry is critical to driving meaningful change,’ the EDC stated, adding that engaging workers and suppliers in this process ensures that the changes pursued are effective and address the root causes of these issues.