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GUEST BLOG: Responsible purchasing practices as a tool to promote ethical behavior 

Chana Rosenthal, Principal & Founder, reDesign Consulting and Ethical Denim Council (EDC) Consultant

“The goal for the EDC is to not exist.”

There is a sense of community and camaraderie that emanates throughout the denim trade show, Kingpins

There is nothing like it. The energy is electric. Denim-clad artisans and mills fill the rooms, each set up with the latest collections ready to show customers in hopes of winning and fulfilling orders. 

And while many of them do, establishing successful business partnerships, there are also plenty of untold stories that challenge the very “spirit” of the denim industry. 

As designers and their sourcing counterparts select qualities in preparation for fabric order booking (a vital part of the purchasing process), the Ethical Denim Council (EDC), an entity spurred out of the pandemic and a Transformers Report in 2020, works the denim show to promote its 8 ethical principlesHonesty and Transparency, Empathy, Promise-Keeping and Trustworthiness, Loyalty, Fairness, Reputation and Morale, Accountability, and Respect.

Ethical behavior should be a standard for how the industry operates and treats business partners, but it’s not always the case. Many aspects of business today often make it challenging with the system as derived.

Introduced in 1970, by the New York Times, The Friedman doctrine, “held that the social responsibility of business was to increase its profits”. Profits became a shareholder responsibility; and outsourcing followed as globalization created an ever-expanding base of low-  and lower-cost producing countries. And as underdeveloped and/or developing economies were built, shareholders’ fiduciary duty looked set to promote growth for all.

But as the apparel industry expanded, this new reality set in and “growth for all” soon exposed negative externalities for some; business models predicated on brand strategy and operations pegged to financial incentives – such as bonuses, promotions, and/or simply staying employed – became embedded into organizations, impacting the behaviors of generations of professionals. Profit-driven actions, from shareholders to assistants, became so deeply entrenched in the business cycles that it’s no surprise that the negative impacts went unnoticed for so long.

Or did they? 

This goal of increased profit maximization, as a shareholder responsibility, challenges the notion of behavior change; and we now know purchasing behaviors are directly linked to outcomes of the environment and workers. 

While this realization happened long before the pandemic, it became more apparent during the height of COVID, with the “VUCA”* period serving as a catalyst to change perceptions. Call outs from suppliers over order cancellations were magnified by the media, and industry MSIs (among other organizations) stepped in to turn the tide. The STTI White Paper, launched in September of 2021, was filled with much-needed recommendations in relation to purchasing practices such as payment terms, order changes, booking capacity, and the use of Force Majeure.  Then, in October of 2021, the Better Buying Institute (BBI) launched its 5 Principles of Responsible PurchasingVisibility, Stability, Time, Financials, Shared Responsibility, very much in line with STTI’s view. The EDC principles also overlap considerably with BBI’s principles of Responsible Purchasing –  with both similarly informed by data gathered from by suppliers. 

This post-Covid acceleration of collaboration by MSIs and other industry stakeholders to find solutions, exemplifies a new era where the normalization of profit maximization at the expense of workers is no longer accepted, and where the expectation instead is for ethical values to be embedded into organizations. 

“There is opportunity for brands to simultaneously profit and remain ethical, but it requires a shift in behavior centered around responsible purchasing practices.”

While defining responsible purchasing practices is a start, embedding them within companies’ business operations serves as the foundation to promote ethical behavior. Leveraging existing structures created by MSIs to foster responsible purchasing practices (RPP) certainly gives brands a leg up. After all, as brands adhere to RPP, they limit the risk of being unethical and are less likely to have interactions with the EDC. And while the EDC provides support to suppliers by giving them a voice in challenging brands’ unethical behaviors, such as order cancellations, the goal is for the EDC not to exist. 

There is opportunity for brands to simultaneously profit and remain ethical, but it requires a shift in behavior centered around responsible purchasing practices. For the “spirit” of the denim industry and others alike to remain intact, the work needs to be done.

*an acronym based on the theories of Warren Bennis and Burt Nanus to describe or reflect on the volatility, uncertainty, complexity and ambiguity of general conditions and situations. 

About the Ethical Denim Council (EDC)

The Ethical Denim Council is a non-profit organization established in 2022 to address the power imbalance and unethical purchasing practices in the denim supply chain. Through the promotion of their 8 ethical practices and accountability of brands, retailers, and importers’ actions towards suppliers, the EDC aims to make the world of denim a better place. 

Refer to the EDC website to learn more.

About the author

Chana Rosenthal is the principal and founder of reDesign Consulting, an apparel focused sustainable business advisory firm. She works with clients on thoughtfully created strategies and frameworks that shift internal business operations to be more sustainable and drive impact across the supply chain. She’s done extensive work with the NYU Stern Center for Business and Human Rights and the NYU Stern Center for Sustainable Business, as well as other organizations and businesses. Prior to consulting, she had an established career in apparel design holding positions at Ralph Lauren, Michael Kors, American Eagle/AEO, and more. 

She also serves on the associate council for Delivering Good, a non-profit that distributes excess inventory to those in need through a network of community partners. Chana has an Executive MBA from NYU Stern, specializing in Sustainable Business and Innovation, and Supply Chain Management, and is based out of Brooklyn, NY.