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What: A global non-profit business association promoting open and sustainable trade.

Why is it important: The association empowers members with a network of producers and suppliers that are aware of the concerns department stores face and can simplify retail supply chain operations through audit standards.

In today’s world, organizations are held accountable not only by the government but even more so by consumers. It is becoming necessary for businesses, especially the fashion industry, to become transparent about the impacts that their supply chain has on workers and the environment and that they take responsibility for instances that happen in each part of the operation. Many businesses have turned to audits such as Amfori to create a channel of ethical transparency for all stakeholders.

What it is

Amfori was founded in 1977 as the Foreign Trade Association (FTA) to represent the foreign trade interests of European retailers, brands, and importers to European and international institutions.

Over the last 40 years, the company has rebranded and expanded its scope to social and environmental responsibilities to assure that goods sourced worldwide are coming from supply chains that respect workers and the environment. Amfori provides companies with a system to improve their social compliance within their supply chain on a global scale.

Amfori membership has grown in the past decade from 23 members in 2004 to over 2,451 in 2020. It has a combined annual turnover of over $1.5 trillion, making Amfori the largest social compliance initiative.

Vision 2030

In 2017, when Amfori celebrated its 40th anniversary, the association launched Vision 2030 which is a strategy to address the challenges that technological advancements and changes in political thinking could bring for sustainable trade. Vision 2030 is centered around 5 objectives: build the organization to be fit for the future, support the members through insight, expertise, and influence, inspire action around the world, grow high-performing people to become the leaders of a sustainable tomorrow, and prosper by contributing to the SDGs (Sustainable Development Goals) to increase human prosperity for all.

Through the guidance of the United Nations’ SDGs, the association hopes to make a social, environmental, and economic impact. Amfori promotes compliance and improvements within global supply chains leading to important discussions about social issues. The organization supports companies by increasing the supply chain visibility which helps address pressing environmental changes. Amfori’s objectives protect and improve international trade interests which is crucial to sustainable development, inclusive economic growth, and human prosperity.

How it works

The association offers three different products: Amfori BSCI, Amfori BEPI, and Amfori Advocacy. Through these product lines, Amfori hopes to enable businesses to succeed by providing world-class services and tools that allow them to trade openly and sustainably while helping shape the right policy environment for open and sustainable trade to flourish.

The Amfori BSCI (Business Social Compliance Initiative) platform provides a single place for all supply chain performance information which helps members make decisions about suppliers and measure improvements.  It aims to improve social performance in the increasingly complex global supply chains. An audit to ensure compliance involves a thorough on-site assessment of supplier facilities by professional social auditors which are executed every two years. Though Amfori BSCI does not provide a formal certificate, the factory profiles and audit results are kept in a database that members can use to make decisions on which suppliers to use.

The Amfori BEPI (Business Environmental Performance Initiative) platform provides data on environmental performance in supplying factories and farms worldwide. BEPI provides a practical framework that can support all product sectors in all countries to reduce their environmental impact, business risks, and costs through improved environmental practices. While no certification is awarded, the BEPI process is designed to give members a fair representation of their international supply chain performance and allow producers to improve their performance. With the help of a professional environmental consultant, the producer is coached on the production areas that need to be improved.

The Amfori Advocacy offering helps members shape a political, legal, and social landscape where they can drive equitable trade and advance human prosperity. The advocacy team works with a range of stakeholders to ensure trade is responsible, sustainable, and benefits everyone involved. Advocacy helps members satisfy customers’ expectations while helping them maintain their competitive edge. The service provides members with a network of local representatives, country-specific information, political, social, and legal insights, and expertise to be able to make informed decisions.

Why is it important

Amfori provides department stores with a database of producers and suppliers that accept and assume principles of ethical commitment. When the supply chain for retail is coming from various countries with differing labor laws and operational regulations, it can be hard to perform the proper due diligence of each region while meeting the demands of the consumer. Through Amfori, department stores can feel at ease by choosing to partner with providers that are connected through the same responsible vision towards the future of retail.

Amfori is attempting to address the chaos and unnecessary duplication of auditing efforts by providing a common code of conduct and a single implementation system. This will enable all companies that source products from various regions to collectively solve complex labor problems in the retail supply chain. As Amfori compliance is recognized by all participants, manufacturers do not need to repeat the inspection thus reducing workload and management overhead.

Amfori has a better understanding of the issues that department stores face and has even backed the Fashion Industry Charter Communique. This initiative is focused on driving the fashion industry to net-zero Greenhouse Gas Emissions by 2050. The Communique calls for cross-sector collaboration within the fashion industry and focuses on the role policy environments play in accelerating climate action both in fashion production and consumption countries. Members recognize that current business models are insufficient and support the adoption of systematic changes to achieve the goals of the Paris Agreement. The members are trying to make the fashion industry a model for other sectors to follow. Any company that is professionally engaged in the fashion sector can sign the letter of commitment to join in on the initiative.

Limits and Criticism

In September 2019, the Clean Clothes Campaign criticized the social audit industry in a report alleging that it prioritizes brands’ reputations and profits and fails to meet its mission of protecting workers’ safety and improving working conditions in global garment supply chains. The organization claims that there were auditing failures in the deadly 2012 Ali Enterprises factory fire in Pakistan and the 2013 Rana Plaza factory collapse in Bangladesh. In both situations, there were Amfori audits done by the testing service provider, TÜV Rheinland, that deemed the facilities safe just weeks or months before the incidents. In the report, German retailer, Adler, confirms that Amfori BSCI members rely on the database to make supplier decisions and that Adler had accepted products from a factory in Rana Plaza because the factory was able to prove BSCI compliance.

Though TÜV Rheinland remains on the approved list of Amfori’s audit vendors, in Amfori’s 2020 Year in Review report, they announced the Audit Assurance Programme as a priority in 2021, which is meant to implement trust and quality back into the audits.

The best choice for European department stores

Amfori’s members come from 45 different countries with 89% of the members having their headquarters in Europe. The majority of the members are importers which represent 66% of the members, with brands and retailers following at 19% and 11% respectively. The two major sectors of members are general merchandising and garment and textiles. Therefore, Amfori can benefit department stores in Europe by sharing best practices and market knowledge around sustainability and social responsibility.

Amfori has also helped members navigate the global pandemic by releasing a report called “Responsible Purchasing Practices in times of COVID-19” to help guide its members through the tough situations that lie ahead.

Though the Amfori audit may not replace other certifications, it reduces the chaos associated with sustainability standards by connecting the garment industry. Through its various members, initiatives, and involvement, Amfori might be the best option for European department stores to focus their efforts concerning sustainability standards.

Credits: IADS (Mary Jane Shea)