Investors call on Zara owner Inditex to come clean on supply chain

Investors want ZARA owner Inditex to make its full list of suppliers public for greater transparency, following in the footsteps of rivals H&M and Primark – which provide detailed lists including factory names and addresses.

Though none of the investors Reuters spoke to are considering divesting from Inditex, the call is to prove that there is no forced labour in ZARA's supply chain and that garment workers are being paid fairly.

Every year Inditex publishes the number of suppliers it sources from various countries, however, there is currently no information on individual factories, so Reuters asked shareholders what they want to see in terms of "improved disclosure".

In response, one such investor, Dutch asset manager MN, said: "In our engagement with Inditex one of the things we ask is if they could disclose a list of their suppliers and the geographical location.

"Even though Inditex assures us that they have this data available, up until now Inditex is not willing to disclose this information unlike some industry peers who publish extensive supplier lists."

MN is therefore keen for Inditex to show whether this information is actually available, for said reasons as well as "for its own due diligence".

Inditex, which is set to publish its annual results on 13 March, reportedly declined to comment on investors' demands for it to publish its full supplier list.

However, an Inditex spokesperson said: "Inditex has a deep commitment to maintaining high standards in its supply chain and believes that our industry leading traceability system, which gives us maximum visibility of the supply chain, is key to this."

Reuters said that the five Inditex investors who responded to its questions hold a combined stake of worth around $2 billion (£1.56bn) in the company, whose current valuation is approximately $140 billion (£109bn).

The call from Inditex investors comes as there is growing scrutiny over how fashion brands and retailers are sourcing clothes, with the likes of Boohoo and Shein being hit by allegations of forced labour in their supply chains in recent years.