Zara

RATING

SECTOR

Retail

WEBSITE

CONTACT

Edificio Inditex Av. Diputación s/n 15143 – Arteixo A Coruña – Spain
Tel: +34 981 185 400

STOCK EXCHANGE

LISTING

  • Dow Jones Sustainability Index (DJSI) – Inditex elected most sustainable company in retail industry (2016) 
  • Inditex top score in the FTSE4Good Index (2011)

EMPLOYEES

152,854

CHIEF SUSTAINABILITY OFFICER

Luis Coloma

AWARDS

N/A

CONTENT SOURCE

FURTHER READING

Report created by Muge Acar

Zara

SECTIONS :  Sustainability    Evaluation  •  Progress  •  Watch  •  Overview

Company Activity

Zara is one of the largest international fashion companies. It belongs to Inditex, one of the world’s largest distribution groups. The customer is at the heart of their unique business model, which includes design, production, distribution and sales through an extensive retail network. 

The clothing retailer has nearly 3,000 stores, including its kids and home stores. It has stores in 96 countries and is the flagship brand of the Inditex Group. Zara is renowned for its ability to develop a new product and get it to stores within two weeks, while other retailers take six months. Spain is the biggest market with 547 stores (including Zara Kids and Zara Home), followed by China (229 stores), France (145), Russia (144) and Italy (134). The U.S. has 98 stores as of January 2019.

Company Sustainability Activity

Zara’s parent company, Inditex, is committed to the environment and is taking wide-ranging measures to protect biodiversity, reduce consumption of water, energy and other resources, avoid waste, and combat climate change.

Highlights

N/A

Targets

By 2020:

  • Zara is aiming to make its production chain sustainable over time
  • Zara has set the goal to be zero waste by 2020
  • Zara is committed to ensuring zero discharge of chemical products that do not comply with their environmental standards for the manufacture of their products for 2020
  • By 2020 there will be collection points for the clothes collection programme in all Zara stores across the world
  • Companies 2020 goal is to promote textile recycling
  • By 2020 Zara aims that their products will not contain fibres from ancient or endangered forests

By 2023

  • Zara is working towards to have all of their fibres produced from wood will be manufactured in accordance with strict environmental standards
  • Zara is working with the Green To Pack Project to redesign all of their packagings to make it more sustainable by reducing the number of raw materials they use and consolidating the materials to facilitate reuse and recycling. They are also aiming to not offer any single-use plastics
  • Zara is aiming to guarantee that all waste generated in their central offices, logistic centers and stores is reused or recycled

By 2025

  • Zara is aiming to have all their cotton a more sustainable origin: Better Cotton (grown by farmers accredited by the Better Cotton Initiative), Organic Cotton, Organic Cotton from Organic Cotton Accelerator or recycled cotton
  • Zara will have also all their linen have a more sustainable origin: Ecologically grown linen, European linen or recycled linen
  • Zara is set the goal to recycle all their polyester
  • Zara is working to ensure that the energy they consume in all of their facilities comes from renewable energy and have it be 80% by 2025
  • Zara has signed up to the new Plastics Economy Global Commitment 2025 to reuse or recycle all plastic they use in their commercial activity to reintroduce it into the cycle and reduce the amount of unnecessary packaging

Progress

Garments and Textiles

  • Zara classifies all garments produced using processes and raw materials that help them to reduce their impact such as organic cotton Tencel or recycled polyester under the Join Life Label.
  • Zara is using technologies that reduce water consumption in their production processes
  • Zara produces garments made with processes that allow them to reduce emissions and use of chemicals in production processes.
    • The use of technologies like the consumption of renewable energies or of tanneries certified by the leather working group allows them to perform washing, dyeing and tanning processes in a more sustainable way.
  • Zara uses recycled polyester, wool and cotton, they use more sustainable lyocell, viscose and modal.
  • Lenzing Modal is produced in Austria and is made from more sustainably managed Austrian beech tree forest. The use of wood from local certified forests and a production process accreted by the EU Ecolabel guarantees that the fiber complies with the most demanding EU environmental standards from the raw material stage through to manufacturing.
  • Zara has collaborated with Changing Markets and have signed their Road Towards Responsible Viscose and Modal Fiber Manufacturing to influence change in the textile sector.
    • Currently, the technology only permits recycling of garments made from 100% cotton, wool or polyester but Zara is working on research projects that will allow recycling of more types of fabrics in the future.
      • In collaboration with MIT Zara created MIT-Spain Inditex Foundation for Sustainability, a project that seeks to power initiatives from Spanish universities and research centers to help the advancement of a circular economy.
  • Zara has developed an Eco-efficient store manual that defines design, construction and management standards for their stores to reduce energy consumption.
  • They are implementing centralized systems that allow them to program lighting, heating and conditioning so they are able to adjust these at all ties to the needs of the store and reduce their usage of energy and CO2 emissions.
  • Zara is using the U.S. Green Building Council as a benchmark and working towards reaching the highest levels of eco-efficiency.
    • U.S. Green Building Council is an organization that promotes sustainability in building design, construction and operations.
    • LEED seal Is their leading certifications and Zara’s technology center in Spain and 4 of their stores are certified LEED platinum and 17 of their stores around the world are certified LEED Gold.
    • Zara is working to make its website and online store an eco-efficient website.
  • In 2019, 100% of the energy consumed by zara.com servers and offices came from renewable sources.
  • Zara is working on the Green to Pack Project to make their packaging more sustainable
    • The company is redesigning all of their packaging to reduce consumption of raw materials, increase the amount of recycled content and standardize the materials to facilitate reuse and recycling.
    • Cardboard boxes are reused up to 5 times.
    • They have changed the bags they provide to their customers in-store to have it be 100% recycled paper. 

Sourcing

  • Zara has collaborated with the NGO Canopy and with other companies in the industry to ensure that ancient and protected woodland is respected during the production of fibres such as rayon and viscose.
  • Zara has signed the Fashion Pact during the G7 meeting in Biarritz. The initiative promoted environmental sustainability within the sector based on the science-based targets in the key area of climate, biodiversity and oceans.
  • Zara uses ecologically grown cotton certified by organizations that monitor cotton from raw material through the final product
  • Zara is one of the founding members of Organic Cotton Accelerator (OCA), an initiative that supports producers of ecologically grown cotton to guarantee that the cotton industry grows in a sustainable way that benefits everyone, from the farmer to the consumer.

Recycling

  • As a part of Zara’s social and environmental commitment, they have developed a program for collecting used clothing
  • Zara is in collaboration with local NGOs and together they collect garments that are not being used anymore and give them a second life.
  • Customers can drop off their no longer used clothing into containers found in selected stores and they ensure it’s delivery to NGO that manages the garments and develops projects in the community
  • The clothes will be donated, recycled, transformed into new fabrics or sold to help finance the social projects of the local NGOs.

Health and Safety

  • Zara is working closely with suppliers to ensure they are following official guidance to protect the health of workers in factories during the pandemic.
  • Zara created the “Worker In the Center 2019-2022” programme which sets forth seven priority impact areas: worker participation, living wages, women’s empowerment, safety and health, protection of migrants, social protection and protection of labour rights in the production of raw materials.

Social Impact

  • Zara has been collaborating with the trade union “IndustriALL” since 2017 and has been developing initiatives for worker representation and training programmes.
    • In 2019, they renewed their Global Framework Agreement in a show of their commitment to cooperation.
  • Since 2005, Zara has been working with the Ethical Trading Initiative, an alliance between companies, trade unions and voluntary organizations that are committed to improving the working conditions of workers. Their Code of Conduct for Manufacturers and Suppliers and the methodology for developing it are based on their Base Code.
  • Zara has been collaborating with “Act on Living Wages” to transform the industry and improve wages in the sector through collective bargaining. They have been an active participant in its working since its creation in 2015.
  • Zara is in collaboration with Sustainable Apparel Coalition (SAC) to create a tool, “the Hig Index” that allows the environmental and social impacts of clothing and footwear to be evaluated and reduced since 2011.
  • Zara has been working with “Zero Discharge of Hazardous Chemicals” (ZDHC) to reach its goal of achieving zero waste by 2020.
  • Company has collaborated with Chinese Institute of Public and Environmental Affairs (IPE) on the preparation of the Green Supply Chain Map which makes it possible to demonstrate the commitment to transparency and monitor the environmental performance of their suppliers in China.

Community Involvement

  • Zara creates local workplaces in which workers, employees, entrepreneurs, NGOs, trade unions, governments and communities can cooperate and converse.
  • Zara is working with community development initiatives through social integration programs aimed at vulnerable groups and encouraging the development of various organizations throughout the world.
  • Since 2011, the company has supported Caritas with projects related to promoting employment and entrepreneurship in Spain. These programs encourage the creation and consolidation of Socio-Economic businesses in sectors such as tourism, graphic arts, restaurants, or agriculture.

Water

  • Zara has been working with Water.org since 2015 to facilitate access to water and sanitation for more than 1 million people.

Inclusivity and Diversity

  • Since 2015, Zara has collaborated with this organization on its assistance program for women in Bangladesh and the United States.

Education

  • Zara has launched various programmes aimed at promoting education as the driving force of social change in various countries.
  • In 2001, they began collaborating with the NGO Entreculturas in 11 countries in Africa, Asia, and the Americas with technical and professional education programs for those most vulnerable, primarily focusing on youth. Since beginning this collaboration, they have helped to implement educational projects, benefiting more than 1 million people.
  • Zara collaborates with the China Youth Development Foundation by developing teachers and building and renovating schools in rural areas.
  • Within the academic world, Zara collaborates with various universities to increase social research. They currently have a network of university chairs in collaboration with institutions such as the Massachusetts Institute of Technology (MIT), the University Pontificia de Comillas, the University of Santiago de Compostela, the University of A Coruña, the University Miguel Hernandez de Alicante, and the University of Dhaka (Bangladesh), and the company collaborates with the Beijing Normal University on a scholarship program specifically aimed at university students in China. Additionally, in 2019 they created the Tsinghua University-Inditex Sustainable Development Fund with the objective of offering financial support to initiatives and research that help resolve environmental challenges and encourage sustainable development.

Certificates

  • LEED Certifications (Zara Home Logistic Center)
  • PEFC or FSC stamps
  • ISO

UN Sustainable Development Goals

UN SDGs Compliance

SDG 4

  • Zara is working on projects to improve education in various countries as well as within their workforce

SDG 7

  • The company is working on using renewable energy as much as they can especially in their HQ and aiming to reduce their carbon footprint

SDG 9

  • They are promoting sustainable work ethics in their supplier businesses and aiming sustainable methods in their production and store management processes

SDG  12

  • Zara is improving the life-cycle impacts of their products by promoting recycling, reducing waste and reusing waste and clothing 

Secondary SDGs: 6, 8, 10, 11, 13, 15

Evaluation

Zara is a fast-fashion brand that produces thousands of clothes and hundreds of designs each year. Although they have made clear goals and steps to achieve sustainable practices their core value of releasing cheap clothes in a fast manner is not really allowing them to be sustainable. 

Zara is not contributing to circular economy and are damaging the environment more than they are preserving thorough their business activities.

They also lack important awards and certifications that could boost their rating. While Zara does comply with some UN SDGs, there is more the company can do to engage with he goals. Zara has been rated a D.

Analyst Outlook: Negative

As a leading company in fast fashion, the environmental impact of Zara’s waste is detrimental therefore earning a negative outlook.

Key Points

  • Zara has endorsed a call for action under the International Labour Organization in collaboration with the International Organization for Employees, the International Trade Union Confederation, the Industrial Global Union and more for support for manufacturers and workers through the economic disruption caused by Covid-19.
  • Zara is working with the International Labour Organization (ILO) on their Better Work programme an initiative created to permanently improve socially responsible production processes in countries in Cambodia, Vietnam and Indonesia.
    • In 2017, Zara signed a public-private agreement between ILO and Inditex aimed at fostering respect for fundamental labour principles and rights within the cotton sector.
  • Zara is a part of the United Nations Global Compact programme in which organisations undertake to develop and comply with 10 principles relating to human rights, workers’ rights environmental rights and good corporate practices.
  • According to Refinery29’s article, Zara could spot trends and create products based on them in less than 15 days and they can get items out within 2-4 weeks which for most companies in the industry takes about 40 weeks. It has been stated that in 1 particular factory in Tunisia produces 1200 pieces per day which makes it to 150 pieces in an hour. Their workers are on time and are expected to finish one shirt in 38 minutes. If it takes longer than their products need to be sold for more money. They also reward employees who perform well with 45 Euro bonuses at the end of the year.
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