Analysis Of Sustainability Reporting By Forever 21: Issues And Practices

Current state of sustainability reporting

Discuss about the Journal of Retailing and Consumer Services.

This study deals with analyzing the sustainability reporting for the company named as Forever 21 (Forever 21, 2018). The term sustainability reporting means reporting of a business that majorly impacts the decisions made and activities conducted on society and the environment by use of transparent means of communication and ethical behavior. These actions remains consistent with sustainable development as well as welfare of the society by taking into considerations expectations of the stakeholders in compliance with applying law and remain consistent with international norms of behavior and integrated in and across business enterprise (Agrawal, Kumar and Rahman, 2017). There are different elements of sustainability reporting and this includes corporate governance, ethics, environmental impact, community involvement, environment impact, human rights, labor relations, employee relations as well as health and safety conditions of both employees and consumers. The present report explains the current state of sustainability reporting by highlighting the issues and practices adopted by Forever 21. The next segment deals with analyzing the implications of different stakeholders at the time of undertaking decision-making process. At the end of the study, recommendations had been drawn as to how Forever 21 should engage in improving in their operations and this can be done by acting ethically and responsibly within their activities (Williams, 2014). 

Forever 21 care about their employees and desire that all the employees are able to work in safe as well as healthy environments (Payne, 2014). The company had entered into a comprehensive agreement with each of the vendors as well as factories where they have promised to utilize legal qualified workers and pay those wages. The wages paid should be fair and legal as mentioned in the jurisdiction. The workers will be given an environment that need to comply by the legal requirements as well as covers range of issues such as environmental protection, non-discrimination, free association rights and restricts use of forced or slave labor (Agrawal, Kumar and Rahman, 2017).

Forever 21 had even engaged in abiding by the Vendor Compliance Standards that were developed in order to comply by the industry standards as well as local labor laws. The company has highly trained Vendor Compliance Team that aims at promoting as well as enforcing awful and ethical operations at third-party factory sites (Park, 2016).

Forever 21 believes in looking after the workplace injuries, working against unsafe conditions as well as finally results in bringing improvement in factor efficiency in Vendor selection and maintaining product quality standards. The company even conducts unannounced inspections of the Vendor factories that are used for monitoring as well as enforcing the policies in the most appropriate way (Park and Kim, 2016).

Issues

In order to understand the current state of sustainability reporting, it is necessary to have clear information about the benefits of sustainability reporting. Some of the benefits of sustainability reporting are transparency, meeting the demands of changing consumer, addressing and managing conflicts, keeping business competitive, building into frameworks within business enterprise (Agrawal, Kumar and Rahman, 2017).

Forever 21 is one of the companies that have failed to say anything valuable about their sustainability practices or policies. As a shopper, customers have the right to know about how their production practices impact upon the environment. Overall, this give rise to lack transparency of actions and it is not good enough by any means (Kurucz et al. 2017).

Forever 21 had received an overall score of D+ from 2017 Ethical Fashion Report that looks at the major criteria such as payment of a living wage as well as worker empowerment initiatives and transparency of actions (Agrawal, Kumar and Rahman, 2017). It was traced at that point of time that the company do have supply chain with Supplier Code of conduct, this being the only good news for the company. Furthermore, the company only audits tiny portion of their facilities for a period of 2 years as well as failed to render any worker empowerment initiatives as well. The company made no significant progress towards paying their employees in and across their supply chain with a living wage. This company is one of the fast fashion brands who refused to sign the Bangladesh Accord on Fire and Building Safety that is a legal binding agreement where it needs brands to ensure safe working conditions in the supplier factories (Henderson et al. 2015).

At Forever 21, they care about their employees and provide them vendor-manufacturing facilities where they work together in and across the world (Agrawal, Kumar and Rahman, 2017). The company aims at providing their employees to work in safe as well as healthy environments. The company had even shared same goals of eliminating child as well as adult forced labor. The company is engaged in aligning with the spirit as well as purpose of Responsible Sourcing Network activities. The company had even signed the cotton pledge that was effective in the year 2016. The company is committed to solve the issue and obtain their supply of cotton (Grant, 2016).

From the year 2007, the company had developed a Vendor Agreement that needs their vendors to conduct business, which adheres to safety as well as human rights standards (Agrawal, Kumar and Rahman, 2017). The company does not manufacture any of its own merchandise, instead they purchase goods from the vendors who in turn needs to abide by the policies as well as procedures as it restrict the use of child or slave labor to manufacture the sold clothing and accessories (Diddi and Niehm, 2017).

Practices

The company had established a permanent fur-free policy since 2004 and even worked together with PETA for meeting guidelines and avoiding cruelty to animals. The company even engaged in putting permanent ban on Angora in the year 2014 (Agrawal, Kumar and Rahman, 2017).

It is important to understand the fact that Animal welfare is one of the only areas where Forever 21 is doing well. The company does not use wool and fur. Rather, the company makes use of leather without specifying their sources (DesJardins and McCall, 2014). 

The company is committed towards conducting the business by using ethical means and expects that the suppliers should share the same level of commitment (Park and Kim, 2016). To this, the company had engaged in conducting global ethical program for preventing abusive, exploitative or illegal condition present within the workplace. The company aims at training some of the specific employees as well as manages the enforced procedures used against slavery and even human trafficking for that case (Kurucz et al. 2017). The company engages in maintaining internal accountability standards as well as certain procedures for employees and even contractors who had eventually failed to meet company standards on matters relating to slavery and human trafficking. The company needs direct suppliers for certification purpose so that the materials can be incorporated into products and how it can complies with the laws as well as company standards on matters relating to slavery and human trafficking. It is necessary for all the suppliers for participating in the program as a condition of conducting business with the company (Agrawal, Kumar and Rahman, 2017).

It is essential to identify the stakeholders that are present within a given business enterprise. Owners and employees are the internal stakeholders. Customers, government, suppliers and communities are the external stakeholders (Abeydeera et al. 2016). There are several advantage of stakeholder engagement that expands the potential ideas as brought in front of the company. It is needed to gather diverse cross-section of the community as well as aims at bridging the gap between the social capitals of the given community. Furthermore, it is needed to ensure a faire, ethical as well as transparent process that increases the credibility of the given company. It is required to plan the engagement process that includes involvement, learning as well as action. It is important to start and maintain the dialogue. Initially, the contact lies between focusing mainly on internal stakeholders (Agrawal, Kumar and Rahman, 2017). It is important to review the process on weekly basis by conducting meetings and by external communications.

On finding the case on Forever 21, it is noted that the company need to focus upon certain areas where they can bring improvement. Some of the activities are as follows with proper justification:

• Forever 21 need to focus more upon labor and employee relations
• To look after the health and safety of employees (Kurucz et al. 2017)
• To find ways where Forever 21 can improve working conditions of employees
• Regulations of Child Labor Standards (DesJardins and McCall, 2014)
• Forever 21 had not signed the Ethical Trading Initiative which need that the supplies meet a baseline code for the rights of the workers
• Forever 21 has also been criticized for its cotton sourcing
• Half of short corporate social responsibility of Forever 21 refers to charities where it suggests to treat the employees with basic worker rights as an optional charitable cause
• The environmental policy adopted by Forever 21 is shortest of all. The company engages in taking small initiatives such as installing LED in new stores, recycling all the shipment boxes as well as transporting product by sea rather than air for reducing carbon emissions (Park and Kim, 2016).
• Lack of overarching commitment that reduces overall environmental impact of the company (DesJardins and McCall, 2014)
• Forever 21 do not seem to approach corporate social responsibility as more than a publicity statement (Kurucz et al. 2017) 

There are several suggestions listed below as to how Forever 21 can proceed with their business or operations so that they can prove themselves ethically right in all means. Some of the recommendations are listed below with proper justification:

• Maintaining impact and needs of stakeholders
• Keeping low costs
• Maintaining relationships with the stakeholders
• Keeping profits up
• Driving efficiencies
• Share costs
• Reducing duplication effort
• Driving innovation
• Eliminating hazardous materials
• Encouraging continuous improvement
• Reducing supply chain risks
• Implementation of standard age requirements
• Conducting training sessions as well as stress management access to healthcare activities
• Implementing occupational health as well as safety standards
• Maintaining child labor regulations
• Implementing wage requirements
• Implementing standard work hours or overtime hour

• Forever 21 should care about improving ethical sourcing of their product. The company need to work together to implement organic cotton into its clothing so that they can reduce the amount of water it takes at the time of creating the products as well as decrease it participation in making products. These products altogether produces harmful toxins to the workers who are responsible to generate the cotton.
• It is recommended to Forever 21 for increasing level of domestic employment as well as pull away from foreign outsourcing as it deals with controlling the human rights regulations at the same time.
• Forever 21 need to engage in finding ways where they can reduce the waste created by the company. This can be done by collaborating with Council for Textile Recycling where the company can engage in recycling the merchandize that is defective or damaged so that they can reduce levels of discarded clothing
• It is suggested to Forever 21 to work together in order to reduce consumption of electricity and this can be done by utilizing the compact fluorescent light bulbs. Usage of electricity can be minimized by installing fewer lights in stores as well as using motion sensor during nighttime rather than leaving the lights on.
• Forever 21 need to find ways where they can reduce consumer waste as well as minimize the impact of fast fashion. The company should develop a program where they can donate unwanted clothing from consumers as well as unsold merchandize to Goodwill stores. By this, the company can select one of the top five most valuable as well as recognized non-profit that guarantee promised donation and aims at providing it to families for vibrant communities and strong families as well.
• It is suggested to Forever 21 for selecting Dress for success and donating their products that are more professional and formal. These products can be further donated to women with matching apparel and accessories.

Conclusion

At the end of the study, it is concluded that Forever 21 still have to improve over its sustainability practices. The above study or analysis properly discuses about the current state of sustainability for the company named as Forever 21. The company desire to implement new CSR plan where they can work upon certain issues that are briefly highlighted in the present report. By implementing the new CSR plan, Forever 21 can bring improvement in its product sourcing as it can be kept more ethical, by reducing the waste created by the company. The company can even engage in providing ways for the consumers for reducing the clothing waste. It is for this reason why Forever 21 still needs improvement in certain areas. The improvements that are highlighted in the above-recommended section will help the company to be more sustainable as a brand without even compromising its trendy reputation. 

Reference List

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