Cotton certifier used by Inditex, H&M finds no evidence Brazil farms breached standards (updated)

SLC Agricola SA

23/04/2024 20:29

(Changes headline)
       MADRID, April 23 (Reuters) - A group which certifies
sustainability and working practice standards on cotton used by
Zara owner Inditex said on Tuesday an independent audit had
found no breaches by three Brazilian farms accused by an NGO of
deforestation and land-grabbing. 
    The allegations by Earthsight against Better Cotton had
raised concerns for firms such as Inditex  ITX.MC  and H&M
 HMb.ST  after the NGO said they were using some cotton from the
farms, bought through suppliers in Asia, in their products.  
    Inditex had asked Geneva-based Better Cotton, the world's
largest certifier of more sustainably farmed cotton, for clarity
on its certification process and progress on its traceability
practices, in response to information received from Earthsight.
    Fast fashion retailers face pressure from consumers and
activists to sell products with less environmental impact.
    Better Cotton, which was created by companies and several
non-profit groups including the World Wildlife Fund, says it
aims to support improved practices in areas such as water and
soil stewardship and to promote better working standards.
    The group said that an independent audit by advisory firm
Peterson found that three farms in the state of Bahia, which
were licensed to sell Better Cotton, had not breached its
standards and would not be suspended.
    Inditex declined to comment on the results of the audit,
which were published by Better Cotton on Tuesday.
    H&M told Reuters it is in close dialogue with Better Cotton
to follow the results of the investigation and gain more
understanding of its action plan. 
    "Together with other brand members, we are engaging with
Better Cotton in conversations to further improve their
standard," H&M said.
    Better Cotton said the audit by Peterson had concluded that
a review of satellite images confirmed that the three farms had
not contributed to deforestation since at least 2008.
    Alan McClay, Better Cotton's chief executive, told Reuters
that the audit found no evidence of non-compliance by the three
farms and no legal cases involving them since 2008.
    Better Cotton said it was now considering carrying out
direct due diligence on large corporate owners of cotton farms
given the wider impact of these businesses.
    "We have an opportunity and probably an obligation now to
enhance that due diligence and to strengthen it," said McClay,
adding that some companies could be at risk of losing their
licences if they do not keep up with evolving standards.
    Better Cotton's strategic partner in Brazil gave the farms
their cotton certification, which the group recognises as an
equivalent standard, he said. Brazil contributes about 40% of
the cotton certified by Better Cotton.
    The focus of the investigation was on farms owned by SLC
Agricola and Horita Group companies, Better Cotton said.
    SLC Agricola told Reuters it "remains fully available to
collaborate with any new verification that may be necessary".
    Horita Group welcomed the result of the Peterson audit,
which it said was in response to "unfounded accusations".
    "We agree with the audit's conclusion and are open to
implement the improvements that have been proposed. We continue
to strive for transparency, the primary value of governance that
we embrace in our group," Horita said in an emailed statement.
    Abrapa, the Brazilian Cotton Growers Association, said in a
statement it is reviewing with Better Cotton the auditor's
suggestions to help make standards more robust and increase the
reliability of certification. 

 (Reporting by Corina Pons; Additional reporting by Helen Reid
in London and Ana Mano in Sao Paulo; Editing by Charlie Devereux
and Alexander Smith)
 ((corina.pons@thomsonreuters.com; 0034 690725854; Reuters
Messaging: corina.pons.thomsonreuters.com@reuters.net))