Apparel, Accessories & Footwear

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The Apparel, Accessories & Footwear industry includes entities involved in the design, manufacturing, wholesaling and retailing of various products, including adult and children’s clothing, handbags, jewellery, watches and footwear. Products are manufactured primarily by vendors in emerging markets, thereby allowing entities in the industry to focus on design, wholesaling, marketing, supply chain management and retail activities.

Relevant Issues (3 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Apparel, Accessories & Footwear

Product Quality & Safety
  • Management of Chemicals in Products

    Chemical safety regulations demonstrate regulatory and stakeholder concern surrounding the use of harmful or potentially harmful substances in consumer products, including apparel, accessories and footwear. Finished apparel and footwear products have been found to contain traces of chemicals that have been banned or regulated. Depending on the chemical, the amount present in a product and the type of exposure, specific substances can be carcinogenic and can disrupt hormone activity in humans and other organisms. Failure to manage this issue may generate increased regulatory oversight and affect an entity’s social licence to operate. The presence of harmful chemicals in products can result in recalls, litigation and reputational damage. Entities in this industry can examine the design, manufacturing and end-of-life phases to manage the creation, use and disposal of products containing chemicals of concern, develop safe alternatives and eliminate banned chemicals. Given the industry’s reliance on outsourced manufacturing, this involves proactive partnerships with suppliers. In managing this issue, entities must balance the hazards posed by some chemicals against the quality of a product and its costs of production.
Supply Chain Management
  • Environmental Impacts in the Supply Chain

    The Apparel, Accessories & Footwear industry’s global supply chain contributes significantly to adverse environmental externalities through water consumption and various forms of pollution. Water pollution results from the discharge of chemicals during water-intensive dyeing and tanning processes. Air pollution stems from the industry’s energy use and some manufacturing processes. These impacts have the potential to damage an entity’s reputation and to affect cost structures over time. The scale of this issue has been intensified historically by the industry relying on manufacturing partners in emerging markets with limited environmental regulations and oversight. However, enhanced stakeholder and consumer scrutiny, coupled with increasingly stringent regulation in some regions, has encouraged entities throughout the industry to work with suppliers to reduce their environmental impact. Apparel, Accessories & Footwear entities that leverage their market power to influence suppliers to improve operational efficiencies and resource consumption and limit pollution can mitigate the costs associated with increased resource scarcity and regulation. Further, those that engage with suppliers through monitoring, auditing and strict standards may better preserve shareholder value over the long term.
  • Labour Conditions in the Supply Chain

    The treatment of workers and the protection of worker rights in the Apparel, Accessories & Footwear industry’s supply chain is of growing concern among consumers, regulators and leading entities. Critical aspects of this issue include employee health and safety, fair pay, child labour and forced labour. Although many entities strive to improve supply chain labour conditions, the industry’s reliance on a multitiered system of suppliers, subcontractors, labour recruitment firms and part-time workers makes these issues difficult to manage. Because entities in the industry typically contract with suppliers in countries with the lowest direct costs, the industry’s products often are manufactured in countries with limited regulations or enforcement protecting workers. This dynamic can increase an entity’s exposure to reputational risks. Effects on short- and long-term costs and sales can arise from increasing regulation and enforcement in response to high-profile safety or labour incidents, production disruptions because of strikes and other labour-related work stoppages, or through a shift in demand away from entities associated with such incidents. Entities with strong supply chain standards, monitoring and engagement with suppliers to address labour concerns may better preserve shareholder value over the long term.
Materials Sourcing & Efficiency
  • Raw Materials Sourcing

    The Apparel, Accessories & Footwear industry relies on many raw materials including cotton, leather, wool, rubber, and precious minerals and metals, as inputs for finished products. Sustainability impacts related to climate change, land use, resource scarcity and conflict in regions where the industry’s supply chain operates affect the industry’s ability to reliably source materials. The ability of entities to manage potential material shortages, supply disruptions, price volatility and reputational risks can be more difficult when supply chains lack transparency. Failure to effectively manage this issue can delay shipments and depress earnings, reduce margins, constrain revenue growth or increase costs of capital. The types of risk associated with sourcing different materials can require different solutions, including engaging with suppliers, enhancing transparency by using certification standards, using innovative alternative materials, or introducing circular economy practices. Entities that are proactive may reduce their exposure to price volatility and potential supply disruptions, while improving their brand reputation and developing new market opportunities.

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Current Industry: Apparel, Accessories & Footwear

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