We recognize that the purchasing practices of global companies can affect what happens in the supply chain, including excessive overtime, issues related to wages and benefits, and unauthorized subcontracting to facilities with poor or unsafe working conditions. Better purchasing practices can help reduce these issues, supporting compliance with responsible labor practices and the protection of human rights in the supply chain.
We have taken steps to improve our purchasing practices, including through our participation in Better Buying, an initiative that helps us understand the impact of our purchasing decisions and practices, as well as other aspects of the design and development process. We have used this information, for instance, to help our sourcing teams develop systems that can more appropriately place orders depending on our suppliers’ capabilities to fulfill them.
We work to align sourcing decisions and accountability with our social sustainability goals, resulting in improved supplier performance in adhering to international labor standards. In 2019, an independent study by researchers at the University of Oxford and the University of Toronto confirmed that our approach is an effective model to improve supplier performance against our COVC criteria.
In 2020, we further integrated sustainability into our purchasing decisions by including sustainability-focused scores on our vendor scorecard, including Code of Vendor Conduct (COVC) compliance, Higg Index and P.A.C.E.— while some of these programs are voluntary, the vendor scorecard integration incentivizes our facilities to participate in these programs to increase their score.
In 2020, several apparel brands faced criticism from public campaigns for failing to pay in full for goods that were in production when the COVID-19 crisis hit. As clothing stores closed their doors and sales declined, some brands canceled orders or did not pay for orders made, which affected cashflow for suppliers and led some to halt payment to workers. Gap Inc. honored its commitments by repaying in full for any orders that had been canceled, agreeing not to cancel orders or require discounts, and by offering low-cost financing to suppliers.
Looking ahead, we will continue to seek feedback on our purchasing practices through initiatives such as Better Buying. Based on findings, we will seek new approaches in consultation with stakeholders to improve our purchasing practices, taking into account the impact on workers in our supply chain.
Our top priority for the people who make our clothes.
Improving working conditions to benefit people and our business.
Holding ourselves accountable.
Protecting people and our business.