Fast, cheap fashion has completely changed the way Americans spend their money. On average monthly clothing expenses are about $134 (that’s $1,604 per year). But each of those dollars are not created equally. Some fashion chains are very conscious of their environmental and social footprint, while others are not.
Specifically, in this post we are going to dive into the Ethically scores for Zara (parent company Inditex) and Urban Outfitters to see which deserves your support.
Why you should trust us
At Ethically, we compile scores from over 700 verified sources to create a granular profile of more than 10,000 companies and brands, evaluating their impact on the environment, society at large, and good business. You can learn more about Ethically’s process in our Methodology and you can see the scores yourself by downloading the Ethically browser extension.
Inditex, the biggest fashion group in the world, operates over 7,200 stores in 93 markets worldwide. The company’s flagship store is Zara, but it also owns a number of other brands such as Zara Home, Massimo Dutti, Bershka, Oysho, Pull&Bear, Stradivarius, Uterqüe and Lefties. The majority of its stores are corporate-owned, while franchises are mainly conceded in countries where corporate properties cannot be foreign-owned.
The company operates a unique business model: instead of committing a large percentage of production for the next fashion season, the company commits a small amount and uses customer feedback and an efficient production network to replenish stores with new and different products weekly, in order to be able to respond quickly. New styles are prototyped in just 5 days and 60% of the manufacturing happens locally to shorten lead-times. In Zara stores, it can take a new garment as little as 15 days to go from design and production to store shelves.
Urban Outfitters, Inc. (URBN) is a multinational lifestyle retail corporation headquartered in Philadelphia, Pennsylvania. It operates in the United States, Sweden, United Kingdom, Spain, Denmark, France, Germany, Ireland, Belgium, Canada, Italy, the Netherlands, Israel, Poland, and the United Arab Emirates. The Urban Outfitters brand targets young adults with a merchandise mix of women’s and men’s fashion apparel, footwear, beauty and wellness products, accessories, activewear and gear, and housewares, as well as music, primarily vinyl records and cassettes. Much of the merchandise is designed and produced by the company’s wholesale division on multiple private labels.
These two companies, while often compared side by side, are leaps and bounds apart when it comes to ESG measurements.
Overall, Inditex scored a 64/100 and Urban Outfitters gets a 47/100. This difference is most clearly highlighted in their environmental scores, but Urban Outfitters also gets beaten when it comes to their track record on human rights/supply chain as well as their community development and philanthropy.
Let’s dive in (Reminder, check out our Methodology for definitions on each of these subtopic scores)
Inditex outpaces Urban Outfitters handily in this category, with an edge of 65 to 42.
Double clicking on that score difference, Zara (Inditex) scored a 66/100 in community development, a 63/100 in Product and a 65/100 in Human Rights and Supply chain.
On the other hand, Urban Outfitters scored 46/100 in community development/philanthropy, a 40/100 in product and a 39 in human rights and supply chain.
While not as stark as the community and human rights differences, there’s still a lot to be desired in Urban Outfitter’s Employee rankings. Overall, Urban Outfitters garnered a 49/100 vs. Zara’s 63/100.
The biggest issue causing the discrepancy was the respective companies’ training, health and safety rankings (67 for Zara and 48 for Urban). Diversity and Labor rights were also a problem, Zara: 64 vs. Urban: 51), and finally compensation was the most closely related rating of them all with a Zara: 57 vs. Urban: 49 score.
By far the largest discrepancy in these ratings came in the environmental arena. Zara scored a 76/100 in their environmental policy vs. a 38/100 for Urban Outfitters.
Energy and Climate change was also a pretty huge win for Zara with an 83/100 vs. Urban Outfitters’ 58/100.
Resource Management also came in with a big discrepancy at 74/100 for Zara and 50/100 for Urban Outfitters.
Where did these scores come from and what does it tell us?
Ethically partners with CSRHub as a primary data source, which in turn, aggregates over 700 data sources, compiling them into simple, easy to digest grades.
One of the big takeaways with looking at Urban Outfitters is the lack of tangible proof that they have implemented any ongoing strategies to improve their human rights/supply chain policies, environmental policies or community standards. If you’re an Urban Outfitters advocate and want to see more evidence that they’re committed to these areas, email our CEO at email@example.com and let us know. We’d love to hear from you.
Especially with competitors like Zara and H&M, it’s definitely worth taking a second look before supporting them until they fix their policies and take a firmer stance on some of the areas listed above.
If you want to stay up to date on how Urban Outfitters is progressing with their scores, make sure you download Ethically. We pull data regularly to make sure our scores reflect how companies are doing today, not years ago.
As always, please check out our Methodology page for more details on how we get our ratings data.