ASOS

Fashion with Integrity

Monday 6 June 2016, by John Fitzharris

2 inspired

A. The main facts about the activities of the company.

ASOS, an acronym standing for “As Seen On Screen”, is a British online fashion and beauty store that sells over 850 brands offering womenswear, menswear, footwear, accessories, jewellery and beauty products as well as its own line of clothing and accessories.

As a retailer, it ships to 190 countries- UK, Australia, USA, France, Germany, Spain, Russia, Italy and China among others- from their fulfilment centres in the UK, US, Europe and China. With a fashion focused on the people aged 16 to 34 years, ASOS attracts over 13.6 million visitors per month and, as of 2015, had 9.9 million active customers (customers having bought within the last 12 months). Their revenue for 2015 was £1,150 million with gross profits of £574.8 million and a net profit of £36.9 million.

Their vision is achieving growth in a way that adds social value and minimizes environmental impact, thus respecting people and the planet with products that customers can trust all while helping them to “look, feel and be their best”. What makes ASOS so unique is their commitment to not only providing consumers with the products necessary to be fashionable, but also guiding them and giving advice as to how to do so. This brings forth a sense of community among ASOS customers due to their eagerness to be more than just an online marketplace.

B. The Ethical challenges this company is addressing.

This company sustains their economic activity on three main pillars: ethical trading, sustainable sourcing and animal welfare.

They aim to be a responsible retailer, where every worker in their supply chain is respected and protected. With this purpose, they have created an entire department with the sole function of ensuring their commercial strategy remains within a sustainable and ethical framework. They work and introduce every intermediate in their supply chain into their Ethical Standards so to better understand the root causes behind poor working environments as well as address them if revealed.

ASOS knows that consumers have come to expect this from them and also acknowledge its huge importance in the long run for the health and welfare of the environment and communities where they operate. Using their growing global reach to promote and maintain manufacturing that is socially and environmentally responsible not only allows for the sourcing of sustainable materials, but also allows the average consumer who does not consider these things to make ethically conscious choices. ASOS’ popularity has an expansive reach and is bringing social responsibility into the spotlight for younger, fashion-concerned individuals.

Here are some of the initiatives ASOS have committed to:

- Supplier scorecards: assessments covering key ethical trade indicators; these enable buyers to quickly understand the relative ethical positioning of one supplier compared to others.
- Factory health and safety education: since 2014 they have been focusing on improving health and safety standards in their supply chain, especially those that have been outsourced by helping factory managers understand how health and safety management can benefit both them and their workers.
- Regular factory audits and continuous improvement plans: ASOS reviews their purchasing practices each year and in 2014 enlisted Impactt, a leading consulting agency specializing in ethical trade, human rights, and labour standards, to carry out an independent review that highlighted key areas of improvement.
- Living wage: they have joined ACT – ’Action, Collaboration and Transformation’ – a group of 14 retailers working with suppliers and the Global Trade Union, IndustriALL, on an agreed set of principles to address living wages through better purchasing practices, improved skills and productivity, freedom of association and collective bargaining, and positively influencing governments.

How is the company addressing the environmental issue?

- Eco Edit is a section of their website where customers can find sustainable fashion from around the world, as well as their own brand ASOS Africa which collaborates with the Foundation SOKO in Kenya, made with local fair trade textiles.
- All products sold that have a social or environmental benefit are tagged with a “Signpost” image. This not only facilitates informed purchasing but it also helps their buying teams choose sustainable fashion for next season’s clothing lines.
- ASOS Marketplace & Reclaimed Vintage. In addition to Eco Edit, ASOS takes unwanted clothing items and materials and give them a new lease of life, thus helping customers to consume less resources. This benefits consumers feeling secondhand guilt due to the unethical practices of the clothing company get rid of old clothing while also benefitting people who might want those clothes but do not want to support the original companies’ unethical practices. This is a great example of their combination of economic profitability - as they get commissions for that service - and transparency that allows consumers to remain ethically sound by not directly supporting companies committing human rights violations.
- The Sustainable Clothing Action Plan (SCAP): ASOS has been a member of this organization since 2012. Led by WRAP, the not-for-profit recycling and waste organisation, SCAP assesses clothing production across its entire lifecycle in order to find ways to make it less wasteful as well as to reduce its carbon and water footprints.
- ASOS firmly believes it is not acceptable for animals to suffer in any way in the name of fashion. When animal materials are used in products, suppliers must implement industry recognized best practice to ensure that animal welfare during rearing, transportation, and slaughter is safeguarded at all times. They enable their providers and suppliers to comply by putting in place measures to educate them on their Animal Welfare Policy.
- About Carbon Emissions: Out of an initial carbon footprinting exercise in 2008, they realized the majority of their emissions come from customer deliveries that can be reduced only to an extent. Currently, their carbon footprint is of 44,331 tonnes CO2 (2013: 42,014 tonnes). They have redesigned their packaging, reduced the size of boxes in which they send orders - which are now made with recycled and recyclable material - and are constantly innovating to improve this area of their business. To offset the emissions they can not avoid, ASOS has joined The Carbon Neutral Company that funds the following projects:
- The Kasigau conservation project in Kenya
- Danjiang river solar cookers in China
- Sind power portfolio in India
- Solar water heaters in India

Finally, in regards to their consumers, ASOS feels responsible to influence young fashion-lovers in a responsible way by promoting a healthy, positive body image without artificially adjusting photographs of models to make them look thinner. They also participate in government advisory panels to tackle body confidence issues and enable customers to post images of themselves wearing the clothes they have bought through the #AsSeenOnMe feature, among others.

Also, ASOS recognizes that many of their customers and employees have visible or underlying disabilities. Their awareness of this is evident by their launching of a partnership with the British Paralympic Association that aims to raise the profile of 20-somethings with disabilities in fashion during the 2016 Olympics in Rio.

C. What makes you believe this company is really ethical and why you trust it?

All of these practices mentioned above have given us faith in this proactive firm. ASOS is clearly handling a transparently responsible policy towards the environment and human wellness. We could, however, think that all this named actions are just a nice way of decorating the ASOS website or appearance without having any material nor observable result. For this reason a few proofs have been included concerning ASOS’ performance and their unsolicited enlistment with a multitude of organizations that can be seen as control implements.

The UN Global Compact is a voluntary initiative that seeks to foster responsible corporate nationality by mandating that every member commits to supporting basic human rights, labour standards, steps to safeguard the environment as well as anti-corruption measures. What makes us trust this membership is that it will not be granted without publishing the required communication on progress (COP) that is an annual report that guarantees their commands have been followed stringently.

The Ethical Trading Initiative (ETI) also plays a great role supporting ASOS’ ethical trade approach. ETI is an alliance of companies, non-governmental organizations, and trade union organizations that works to improve the quality of life for workers in global supply chains.

ASOS has received much recognition that supports our trust for the company. Regarding their environmental footprint control measures taken, we can, without a shred of doubt, conclude that their steps taken have brought about positive change. ASOS obtained its recognition for the quality of its initiatives for the reduction and compensation of CO2 emissions, making it the leading fashion retailer under the certificate of the Protocol Neutral Carbon, a globally recognized title. If that is not enough, many animal welfare organizations, such as the PETA, have crowned the British company during its second vegan awards celebration with the most desirable cruelty free clothes and accessories on the market in the Men’s category. They are also the proud recipient of SPAC’s Business Award for Innovation for ASOS’ robust employee training programmes.

Working with their suppliers and manufacturing sites who find difficult to meet their standards towards environmental and social responsibility helps ASOS improve these intermediaries within a fixed time scale that, if not fulfilled, ends their partnership. Whenever a supplier or a manufacturer breaks their most basic rules, it does not go unnoticed.

In the fashion industry is quite common to find eating disorders among the consumers, models, and also employees within. This is because the image that many brands are selling to customers promotes impossible ideals that lead to a negative perception of oneself. ASOS won the Beat Beacon award for providing online support to people with eating disorders and for raising awareness of these issues of body image within the industry. This is a feat that many companies attempt to reach but one that only true commitment can attain.

The trust comes from all these practices can be later observed in the products they retail as well as in every phase of the supply chain. Of course ASOS is not perfect, as there is likely no such thing, but their transparency and honest disclosure of the information they provide in order to give consumers fair purchasing power leads to a cult-like following from those pleased with the process and cements ASOS’ commitment to continue improving. What we can conclude from ASOS is that they want us to see that while they may not be flawless, they are willing to improve, step by step, and by doing so inspire the textile industry that continues to be embroiled in so many social and environmentally related scandals.

D.The possible challenges facing the company in the future and how you think this company may improve.

Due to their awareness of imperfections and based on the assumption that we can always make improve, we have some recommendations for ASOS that could be useful.
The ambition of ASOS is to become the world’s number one online fashion destination. Their strategy for the future is to be more than just an online retailer, as they wish to be “as synonymous to fashion as Google is to search”.

Their main objectives for the coming years are to achieve greater coherence and focus in their corporate responsibility. The eventual maturity of their Fashion with Integrity business model brings forth the hope that this can be standard in everyday business. By achieving this, their corporate responsibility programme will be better understood by their employees as well as their customers and will subsequently have a greater impact.
It is worth mentioning the fact that, due to their rate of growth and the complexity of fashion supply chains, improving the sustainability of their business isn’t easy. Much of their environmental impact comes through third-party partners that they do not have a direct influence over. However, they are finding different ways of solving or, at the least, improving this problem in the near future. One thing they can do is move their Ethical Trade and Product Sustainability Teams into the heart of their retail operations. This will help them to make real changes as to how they source and buy products in a way beneficial for everyone involved.

We believe that ASOS can improve their transparency by being up-front about the shortcomings of other brands that they retail. Although they cannot control the 100% of other brands’ actions, they can always show information about how all their items are manufactured such as the footprint and many other thing. ASOS will attempt anything and everything that helps them get closer to the objective of achieving more fair and unambiguous purchasing amongst consumers through their policy of total disclosure and transparency.

The key to success in improving labour conditions and control of the firm’s actions is to build trust and openness in supplier relationships while taking a critical look at their own internal practices. This requires real, interpersonal dialogue with the key players in the process that are workers, factory managers, and suppliers. This can only happen if their buyers are engaged in what they are trying to do. And, as the growth of the ASOS brand shows, they increasingly are.

We believe that transparency is the conduit that allows companies make things right while keeping customers informed of everything related to the firm. The top priority of Asos should be to build transparent supply chains and to promote a culture internally where it is 100% clear to everyone that they do not chase profit margins at the expense of workers in their factories. In regards to sustainability, ASOS needs to find a supplier with innovative environmental initiatives, great quality, and efficient production who also offers a fair, decent, and dignified place of work for the people that make their products. There is still much that must be done before ASOS can be truly ethically and environmentally sound but it is evident in their current practices and business model that they have the determination to make things right in an industry with so much wrong.

Bibliography

http://www.asosplc.com/corporate-responsibility.aspx
http://www.carbonneutral.com/
https://www.unglobalcompact.org/
http://www.servimedia.es/noticias/detalle.aspx?s=24&n=73846
http://www.asosplc.com/~/media/Files/A/ASOS/results-archive/pdf/2015-annual-report.pdf

Location: London NW1 7QP (UK)

Sector: Wholesale and retail trade

Official website: http://www.asos.com

Key figures:

2015 Revenue: £1,150.8 million
2015 Gross Profit: £574.8 million
2015 Net Profit: £36.9 million

2,038 Employees (Not including supply chain)

Operates in 190 countries

Nbr. visits: 964

Nbr. inspires: 2