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What: A standard industry approach to measuring and evaluating sustainability impacts.

Why it is important: Both an opportunity and a threat, its soon-to-be open database can make it a potential game changer.

While every brand and retailer today is trying to figure out how to stay in the sustainability game, we have seen in the first IADS Exclusive article dedicated to sustainability that there are many different ways to become more sustainable. However, for a company to develop its own sustainability programme is becoming increasingly complex and expensive, and common initiatives like the Higg Index seem to be a silver bullet.

The Higg Index - playfully named after the Higgs Boson elementary particle - is an indicator-based assessment tool for apparel and footwear products that aims to create a single industry approach to measuring environmental and social sustainability throughout the supply chain. Launched in 2011, it was developed by the Sustainable Apparel Coalition (SAC), a non-profit organization founded by a group of apparel brands, retailers, the U.S. Environmental Protection Agency and other non-profit entities.

The Sustainable Apparel Coalition (SAC)

The SAC started in 2010 from an unexpected partnership between Walmart and Patagonia. The two companies joined forces with the mission to rally peers and competitors from across the apparel, footwear and textile sector, and develop an index to measure the sustainability performance of their products. A dozen leading apparel companies and retailers (including Target, Gap, Kohl’s, Levi’s, Nike, JCPenney, and H&M) joined the project, and the SAC rolled out a first version of the Higg Index in 2012, further developed in December 2013. This new index was actually a spin-off of an already existing tool, the Eco Index from the Outdoor Industry Association (OIA), supplemented by the Nike Considered Index, a design tool and database analysing the environmental impact of materials.

Today, the SAC represents more than 250 members across the industry, from 35 different countries, including Amazon, de Bijenkorf, Farfetch, Inditex, Kering, Macy’s, Nordstrom and the Selfridges Group, and there are nearly 20 000 active users of the Higg Index. The SAC also collaborates with organisations like the OIA and the Sustainable Trade Initiative, and small or medium business that are not members but Higg Index customers. Last year, Higg Co. spun off from the SAC as a for-profit technology company responsible for hosting the Higg Index, and the SAC is still the main manager of the standards and methodology for the Higg Index.

How it works and why it is important

The Higg tools includes different modules for products, facilities and brands. The product tools help brands, retailers and manufacturers to understand the environmental footprint of a material or product by assessing its potential impact on global warming, water pollution, water scarcity, fossil fuel depletion and chemistry. The facility modules inform manufacturers, brands, and retailers about the environmental and social performance of their individual facilities. The Brand & Retail Module (BRM) enables businesses of all sizes to measure the environmental and social impacts of their value chain, from materials sourcing to a product’s end of use.

![the higg index chart

The Index asks practice-based qualitative questions about the brand and facility practices, looking at the entire supply chain, to gauge sustainability performance, drive improvement and help the user standardise how they measure and assess environmental and social impact of apparel and footwear products across the supply chain. It is a learning tool that shows what to focus on, and both collecting and measuring data can help support supply chain optimisation. The new user may start with a high score (the lower the better), but the Index’s section-by-section comparison allows the brand to demonstrate to the C-level management how far behind they are compared to leading peers, and where to initiate swift changes and significant improvements.

Another upside we can expect from a standardised approach might also be for the company to save money by cutting down its need to spend on audits or consultants. Some Higg users report measurable financial benefits from asking all of their main suppliers to complete the same Higg facility module, and suppliers selling to many brands can then avoid dealing with as many different audit processes, and the amount of paperwork that comes with it.

Transparency and independent verification

According to new insights from sustainability-focused transparency platform Compare Ethics, only 20% of shoppers trust brand sustainability claims. Transparency increasingly becomes key and the best way to respond to that distrust is to open up comparable and credible data that anyone can look at.

So far, data and scores have only been shared among the SAC members and Higg users, but Jason Kibbey, CEO of Higg Co., announced in October 2020 that the Higg Index would finally enter the public domain next year. The plan is that anyone, be it a consumer, a regulator or an NGO will have access to the Higg Index’s new Open Data Portal, which is being “designed to fast-track apparel industry transparency globally, empowering consumers and third-parties to validate brands’ sustainability claims”.

However, despite the product page tool scheduled to launch in 2021, brands will only be required to publicly disclose all of their sustainability performance data in the portal by 2025. Questioned on the occasion of the announcement by the WWD about the timeframe for the requirement, Kibbey pointed out that there is basically a long way for brands to go to have all of the process to be complete: “First, they have to have their entire supply chain not just identified, but measured.” Besides the supply chain mapping itself, he underlines that integrating foot printing into all of the processes takes time. Probably a lot, and that also means a cost.

Additionally, we can expect that most of the companies might not be confident to release information that has not been independently verified. They might be reluctant to share improvements with everyone until a complete system of third-party verification has been set up. Also, the push to full transparency may not be fast enough to offset recurrent issues about Higg’s methodology and reported bias.

Limits and criticism

In July, a report published by the Institute for Multi Stakeholder Initiative Integrity, titled “Not fit for purpose”, surveyed several multi-stakeholder initiatives and put the Higg Index under accusation for failing to focus on workers’ rights and to provide measurable transparency.

In August, researchers at the University of California, Berkeley released a report that questions the validity of sustainability tools to transform the industry. The four-year study, which focused on the Higg Index (its Facility Environment Module in particular) and had access to the SACs complete data set, acknowledged how the “Higg Index has laid an important foundation for factory measurement” but concluded that “its effectiveness in driving real action has been limited by slow progress on transparency and a lack of incentives between buyers and factories”, adding “the SAC and the industry need to include public transparency and meaningful incentives to drive greater changes”.

Central product of the Higg tools, the Higg MSI (Materials Sustainability Index) has also been under growing scrutiny, with reported criticism saying that the methodology is biased. Lately, critics came from natural and animal fibres representatives including the International Wool Textile Organisation, the International Council of Tanners and the International Sericultural Commission (silk). The groups have challenged the MSI ’s aggregated material score on the efficiency of its scientific methodology, pointing out some “huge inconsistencies” and “an inherent bias against natural producers”. Additionally, wool groups like The Woolmark Company echoed concerns with the methodology omitting microplastics and other factors in circularity.

In November, the SAC eventually announced that it would retire the criticized aggregated single score used in the MSI, effective January 2021. “Our decision to move up the planned retirement of the MSI single score reflects not only our intended evolution of our focus from materials to the product level, but also to address some of the concerns among materials stakeholders”, said Amina Razvi, SAC executive director, in a statement.

Trying to bring together all the areas for sustainability improvements into a single score makes the Higg a unique and very ambitious undertaking. It is also a very difficult exercise with a subjective part in it, and the single approach might still have a long way to better fit the variety of different interests among the industry. In the meantime, the Higg suite of tools keeps a test-and-learn approach and is continuously updating an adapting to better meet the need for a full transparency in the supply chain.

Conclusion: an opportunity or a risk?

Regardless how fair the scepticism and criticism, the outstanding potential of the Higg collaborative tool to unite the complex segments of the apparel and footwear industry remains. It is at the same time a unique opportunity for every operator to improve their sustainability performance along the supply chain, and for all of the industry to fast-track transparency globally.

However, there might also be a risk for brands in offering more transparency, and the Higg data and metrics entering the public domain next year could be a tipping point. Older Higg users and front runners will put their lower score and better rating forward to outperform, but what about the ones left on the back seat in the back row? Isn’t there a risk of widening the gap between smaller and bigger businesses? Between the ones that are still late with digitalisation and the ones that are way ahead? Also, the Higg initiative started from a not-for-profit coalition and is now being developed and marketed by a for-profit technology company which sells products to clients. Isn’t there a major risk for the sustainability and transparency gap to get even wider, this time between the top clients and the others?

Credits: IADS (Renaud Pillon)