Inditex and Zara: the secrets behind the popular fashion retailer.
Our world is evolving and becoming increasingly connected and interdependent. From our privileged western perspective, it’s easy to see the benefits of globalisation. It’s allowed us to learn more about other people and cultures, travel more and try and see new things. Of course, it has also had negative effects. The consequences of globalisation can be seen in the damaging changes in our physical environment. It could be seen that globalisation has simply allowed the rich to get richer and those in charge to become more powerful, with no thoughts for our planet. Given these issues, are we right to embrace globalisation so enthusiastically, or should we be more skeptical?
TNCs, or transnational corporations, have played a huge role in the rapid globalisation that we have seen over the last decades. Globalisation, to the extent that we have seen it happen, would not have been possible without them.
A TNC, is ‘a company that is controlled from its home country but has large operations in many different countries.’ This, by definition, increases globalisation as it connects people and places, and increases flows of capital, raw materials and produced goods. It does of course, come with challenges, including ethical ones.
TNCs typically have a much worse impact on the environment than local, smaller businesses, due to the large carbon footprint of their products and the cheaper materials they tend to use, which are not usually the most ecologically friendly option.
Inditex is probably Spain's most visible and successful TNC and analysing its impact can help us to understand globalisation better. You may not have heard of Inditex but you probably have some of its products. It is a TNC, headquartered in A Coruña, and is the holding company for a group of fashion brands that we know and love including Zara, Oysho, Bershka, Massimo Dutti and Pull&Bear. The company has stores in more than 400 cities, over five continents. In 2021 the textile giant had a staggering 165,000 employees.
As it turns out, Inditex is not such a giant on the ethical front. The following points will be focusing on Zara, as it is the biggest retailer that Inditex holds.
Zara is causing detrimental environmental impacts. Despite its recent ‘Closing the loop’ program, which allows buyers to return used clothes once they’re done with them, and the company setting target to reduce greenhouse gas emissions, Zara is not doing enough.
There is no evidence that it is on track to meet the reduced emission target or attempting to reduce textile waste either. Inditex reported €3.2 billion in profits in 2021. With such enormous gains, the company should be making use of more environmentally friendly practices, such as using eco-friendly materials or more energy efficient machinery.
However, we must consider our role in all of this too. As easy as it is to criticise companies like Zara, and demand that they do better, really, it is up to us to solve the problem. It’s easy, in our privileged western societies, to buy the clothes, oblivious, or at least happy to ignore the consequences. The reality is though, that as long as we continue to buy the company will continue to destroy more vulnerable societies. This poses the question; can we really blame TNCs, or do we have to look in the mirror for the culprit.
With respect to animal welfare , Zara is also lacking. It has strictly banned the use of fur, angora (a particular type of rabbit fur) and stocking products that have been tested on animals. They do, nevertheless, use leather, down (duck or geese feathers used as insulators) and exotic animal fur.
Inditex and more specifically, Zara, is not the only company like this. It’s one of the many that we see and interact with in our everyday lives that is making decisions that damage the environment and people on a daily basis.
The question we have to ask is; are these damaging actions justified?
Ultimately, the consumer decides whether or not it’s ethical. You might argue that, through the purchase of products provided by TNCs, consumers make this decision about whether their practices are ethical or not. However, we make knowingly unethical decisions daily. The enormous success of Inditex suggests that most people are choosing to ignore the ethical challenges.
Economically, Inditex plays a vital role to millions, especially with economic struggles like the ones that we are currently facing. Zara’s pricing structure, and that of Pull&Bear or Bershka is at the mid to lower end. This makes it readily available for people from almost all socio-economic backgrounds.
Globalisation has made the growth of companies like Inditex possible, and this has been very positive for many, including us who enjoy buying its products. However, it poses ethical questions that cannot be ignored. We must consider our part in this too, and push for the change we want to see.