Investors Demand Zara Owner Inditex Disclose Supplier List

Investors urge Zara owner Inditex to emulate peers like H&M and Primark in unveiling their full supplier list to enhance the assessment of supply chain risks. The demand for transparency stems from Inditex's anomaly among major apparel retailers for not disclosing its factory sources.

Industry Pressure and Regulatory Demands

MSN noted that within the clothing sector, companies face mounting pressure to verify fair labor practices and wage standards within their supply chains. The spotlight on supply chain ethics has intensified, with Chinese fashion giant Shein encountering scrutiny from U.S. lawmakers as it plans a U.S. listing.

In the European Union, proposed regulations mandating environmental and labor impact disclosures have hit roadblocks. The potential sanctions for non-compliance, including fines up to 5% of revenue, underscore the growing emphasis on corporate responsibility.

Leading Brands Set the Transparency Bar

Fashion powerhouses like Adidas, Nike, and H&M have taken proactive steps by publishing detailed supplier lists and providing visibility into factory details. Meanwhile, Inditex discloses the number of suppliers by country annually but refrains from divulging specific factory information.

Shareholder Advocacy for Disclosure

Reuters reported that Dutch asset manager MN, representing institutional investors with significant assets, spearheads the call for enhanced disclosure from Inditex. The dialogue aims to push for supplier transparency to assess the company's information availability and due diligence practices.

MN, managing Dutch pension fund assets, underscores the significance of supplier insights in evaluating Inditex's data accessibility and operational transparency. The group leads the Inditex dialogue within the Platform Living Wage Financials initiative.

Inditex's ownership landscape, dominated by founder Amancio Ortega and daughter Sandra Ortega, reveals a substantial family stake. The investors engaging with Inditex collectively hold a significant share in the company, emphasizing the need for accountability and transparency.

Financial Influence and Market Valuation

The investors interacting with Inditex command a substantial financial footprint, adding weight to their calls for improved disclosure. Inditex's current market valuation underscores the significance of addressing investor concerns regarding transparency and supply chain ethics.

Photo: Samsung Newsroom