Investors Push Inditex To Publish Full Supply Chain

Business

Investors Push Inditex To Publish Full Supply Chain

Investors want Inditex to follow rivals H&M and Primark in making its full list of suppliers public so they can better assess any supply chain risks. Inditex is an outlier among big clothing retailers in not publishing which factories it sources from. Regulators and investors want greater transparency and better disclosure from companies. Clothing retailers, in particular, are under pressure to prove that there is no forced labour in their supply chains, and that garment workers are paid decent wages.

Inditex publishes annually the number of suppliers it sources from in 12 core countries, but gives no information on individual factories.

Know The Chain, a benchmarking initiative for companies and investors to address forced labour in supply chains, gave Inditex a lower overall score in its 2023 assessment than its 2021 assessment.

Publishing its factories could bring more competition from Inditex rivals for the same suppliers, investors say. Swetha Ramachandran, portfolio manager at Artemis Investment Management in London, wants to know what share of Inditex revenues is manufactured in each different supplier country. "It would help us determine their supply chain resilience," she said.

Inditex's published supply chain figures since 2019 show the company has cut suppliers in China and increased them in Bangladesh and Morocco. But it gives no details on the amount of products it buys from those suppliers.