(Tiểu luận) business ethics group assignment case studyis zara fast fashion or ethical and sustainable

NATIONAL ECONOMICS UNIVERSITY -*** - BUSINESS ETHICS GROUP ASSIGNMENT CASE STUDY: Is Zara Fast Fashion? Or Ethical and Sustainable? Instructor: Dr Nguyen Bich Ngoc Class: Advanced Accounting 63 Students: Nguyen Thi My Anh – 11210625 Le Chi Mai – 11219088 Hoang Thanh Thao – 11215372 Nguyen Hoai Thu - 11215540 Hanoi, 2023 Table of Contents A Abstract .2 B Company introduction .2 C Company’s ethics issue Green Washing 1.1 Situation 1.2 Danger of Greenwashing Fast Fashion .7 2.1 Situation 2.2 Ethical issue in Zara’s supply chain and labor abuse 2.3 Stakeholders relevant 10 2.3.1 Supplier .10 2.3.2 Employees 11 2.3.3 Community 11 2.3.4 Shareholders 11 2.3.5 Government 11 2.3.6 Customers 12 D People's awareness and Zara's reactions 12 People’s awareness 12 1.1 Protest .12 1.1.1 Extinction Rebellion activists 12 1.1.2 “Zara detox your fashion" campaign .13 1.2 Customers movement on fast fashion 14 Zara CSR (Corporate social responsibility) 18 Zara positive movements 19 E Our opinion 21 F Conclusion 21 G References 22 This is a preview Do you want full access? 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Log in A Abstract Zara is the leading fashion brand for children and adults of the Spanish company Inditex Zara isn’t just producing the most elevated overall revenues for association yet in addition, is the most renowned and perceived by clients in the market Zara is headquartered in La Coruña, Spain and was founded in 1975 by Amancio Ortega The marketing concept of Zara is to offer for sale, at prices typical of the mid-range, items of this same range in an environment resembling high-end shops Zara is able to successfully sell their brand by promoting fast fashion rather than high fashion, which allows them to quickly adapt to changing fashion styles and market their products more efficiently to their customers The collections are renewed every week In this project, we will also talk about ethics Ethics are the moral principles that govern a person’s behavior or the conduct of an activity We will first discuss the way to make the articles and then in the second part, analyze the ethical problems posed by this situation After a conclusion, we will discuss the solutions put in place by Zara to overcome these situations as well as what we could in addition B Company introduction Zara is a Spanish clothing and accessories chain based in Arteixo, Galicia The company was founded in 1975 by Amani Ortega and Rosalía Mera It is the main brand of the Inditex group, the world's largest fashion retailer The fashion group also owns brands such as Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe Zara has both men's and women's clothing, as well as children's clothing (also known as Zara Kids) Zara products are designed and manufactured based on consumer trends The highly responsive supply chain brings new products to the store twice a week After completing the design, the product will be delivered to the stores in about 1015 days The distribution center in Spain processes all clothes New products are inspected, sorted, labeled, and loaded into trucks In most cases, clothes are sent within 48 hours Zara produces more than 450 million products each year There are more than 2249 Zara stores located in 88 countries Zara often chooses the most prime locations and the most expensive locations to open its main store Zara has main stores on Fifth Avenue in New York, Oxford Street in London, Calle Serrano in Madrid, Via del Corso in Rome, Champs-Elysees in Paris, Corso Vittorio Emanuele in Milan, Nevsky Prospect in Saint Petersburg, GUM in Vladivostok, Shibuya and Ginza in Tokyo, Myeong dong in Seoul, and others Figure 1: Zara’ s stores global presence C Company’s ethics issue Green Washing 1.1 Situation Greenwashing is the practice of misleading consumers about the environmental friendliness (more natural, healthier, free of chemicals, recyclable, less wasteful of natural resources, etc.) of a product or company in order to increase sales Zara has been accused of greenwashing in the past due to lack of transparency about their supply chain and sustainability practices In 2019, Zara announced their sustainability goals, outlining plans to use 100% sustainable fabrics and achieve zero waste by 2025 For this clothing line, the brand used LanzaTech’s technology to create new fabrics from carbon emissions instead of using virgin materials Zara claimed that the capturing and using of carbon emissions would lower the release of these emissions into the atmosphere and also reduce the amounts of virgin materials But in fact, their current offerings still largely consist of fast-fashion materials like polyester, which is harmful to the environment With the use of LanzaTech’s technology around 20 percent of the polyester comes from carbon emissions So then does that mean that the collection is greenwashing? Similar to the other collections of Zara the collection still has a very short lifecycle, and it will end up in a landfill creating more pollution The brand is responsible for overconsumption and with this collection that does not lessen Conversely, collections like these can even lead to more consumption because consumers believe the products to be “good”, and thus feel like they can buy more Zara also has been criticized for making grand sustainability claims without providing evidence of their actions There is no evidence the brand minimizes textile waste when manufacturing its products And, although Zara has set an absolute target to reduce greenhouse gas emissions generated from its operations and supply chain, there is no evidence it is on track to meet its target For example, they claimed to have reduced their carbon emissions by 20% but did not share specific details about how they achieved that reduction It is also important to remember that Zara has fast fashion traits such as ontrend styles and regular new arrivals This business model is inherently harmful to the environment, and energy-efficient stores can’t change that This is a preview Do you want full access? 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Log in Zara’s Join Life Collection is all a big greenwashing lie Zara prints Join Life in some of its products, claiming that 25% or 30% of the polyester used in these garments is recycled Zara does not give any clear information about where this supposed recycled polyester comes from, what controls are established to verify the recyclable fibers, and does not give the customer the information to verify any of its supposed sustainable practices Though the retailer does show some progress towards sustainability, its entire business model goes against these sustainability goals An NPR article calling out Zara’s greenwashing efforts summarizes it perfectly: “When a business is built on a fast turnover of styles, making those products still swallows a lot of energy, regardless of whether it's using organic cotton or selling products in more eco-efficient stores” Figure 2: Zara’s Join Life tags claim they use “ecologically grown cotton” but offer no certifications to back up these claims Critics point out that Zara's parent company Inditex is one of the largest fast-fashion retailers in the world, and the fast-fashion industry itself is notoriously harmful to the environment due to the high volume of clothing produced, the use of synthetic and nonbiodegradable materials, and the exploitation of cheap labor Even though the company said it is planning to slow down production, critics feel Zara is still not doing enough to address its current business model and the consequent heavy carbon footprint caused by its supply chains Additionally, Zara has been accused of not being transparent about their supply chain, which makes it difficult to verify their sustainability claims In particular, they have not shared details about the working conditions in their factories or the environmental impact of their production methods While Zara has made some efforts towards sustainability, it is up to consumers to decide if they believe those efforts are genuine or simply a form of greenwashing no evidence that the brand minimizes textile waste when manufacturing its products And, although Zara has set an absolute target to reduce greenhouse gas emissions generated from its operations and supply chain, there is no evidence it is on track to meet its target It is also important to remember that Zara has fast fashion traits such as on-trend styles and regular new arrivals This business model is inherently harmful to the environment, and energy-efficient stores can’t change that Overall, Zara has made some attempts to be more sustainable, but they have been accused of greenwashing through vague or exaggerated claims, lack of transparency, and continuing to engage in practices that are harmful to the environment So, unless Zara and many other brands start actively working on reducing consumption it is not unlikely to assume that they are greenwashing As Orsola de Castro, co-founder and creative director of Fashion Revolution, said “brands need to address the root cause of its impact, not just its effects…” 1.2 Danger of Greenwashing • Toxic Profit: It is used to maximize profits by selling plastic or products and services that have an environmental footprint that is toxic • Huge Environmental Impact: It is a way to hide a non recyclable production, that pollutes the planet for centuries, creating an opposite storytelling, of the dramatic reality generated • Hiding Huge Environmental Impact: Greenwashing has become a business model itself, maximizing profits while polluting, and hiding real environmental impacts • Intoxicating Language And Messages: It has become a business as usual, with a more green showcase, intoxicating language and messages Making the consumer believe plastic is sustainable and eco-friendly material, while helping diminishing other natural materials and helping to erase the knowledge and real innovation of other biodegradable and cheap materials • Blocks Real Solutions With Less Profit: It hurts companies that offer products and services that are truly sustainable, inhibiting real solutions to the environmental crisis, acting as a carnivorous business environment The more profit plastic based fashion companies make, the more they invest to control logistics, communication and traffic, to destroy the traditional or/and sustainable sectors in the industry • Digital Greenwashing: Most of the greenwashing is made in the digital sphere, hiding environmental crimes reports, sick people, or environmental damage, while paying newsrooms and influencers to market toxic products and make the brands look cool, trendy, and elegant Great investments in all social media to make plastic based fashion brands look green companies Fast Fashion Different from the traditional fashion retail model, Zara operates its own "fast fashion" business philosophy with three perspectives: • Short Time: It takes Zara just two weeks to bring a design concept to the consumers So, Zara always keeps up with the latest fashion trends • Small quantity: Each model of Zara product will be produced in a minimum quantity This both avoids inventory risk and creates a feeling of "exclusivity" • Variety of designs: With a short lead time and small quantity, new Zara models always receive immediate response from the market with minimal inventory From there, more new designs will increase Zara's chances of success One of Zara’s main strengths is its agility in churning out new products based on consumer demand It can take just a few weeks for consumer feedback to reach designers and for the product to then make its way to the retail floor As trends change faster than ever with the prominence of social media and fashion influencers, fast fashion companies like Zara are forced to speed up its turnaround in order to keep up with everchanging demand As a result, the number of times a clothing item is worn to Detox Zara, and many tens of thousands of people emailed and tweeted directly to the company for an ambitious Detox commitment More than 700 Greenpeace volunteers in 20 countries were out at Zara stores on Saturday In the days before, climbers and other activists delivered the Detox message at Zara flagship stores and HQ buildings in Hong Kong, Budapest, Geneva, Hamburg and Madrid Photos and videos of the actions have been trending on Twitter for days for searches like “Zara” and “Fashion” Figure 4: Greenpeace climbers hang a huge banner in front of a Zara store in Geneva reading “Zara DETOX your fashion” 1.2 Customers movement on fast fashion Marketing research and surveys have found that most young consumers care about sustainability They are avid thrift store-goers and secondhand shoppers Gen Z wants similar commitments from the companies they buy from and aren't afraid to demand it This has fueled an oft-repeated narrative that Gen Z’s green habits have “killed” or significantly down fast fashion’s global expansion While fast fashion is a relatively 14