Unpicking Fashion's Supply Chain Tiers & Their Risks

02 September 2022

Megan Doyle

Sustainable Fashion Journalist

Holding together the fashion industry is an intricate network of actors that span the globe. The complexity of fashion’s supply chains can’t be underestimated — a single product can involve potentially dozens of suppliers, from raw material producers, processors, and assemblers, to certifying bodies, logistics providers and retail outlets, before it reaches the end consumer. Each of these suppliers can be categorized into a tier, where they perform a specific function to transform raw materials into finished products. 

At TrusTrace, we believe in the importance of understanding your supply chain. Whether that means mapping out the location of each supplier or going a step further to trace individual batches of products and materials. Having visibility over your supply chain gives brands the ability to identify and act on environmental and social risks that may occur, such as the irresponsible use and disposal of chemicals and water, human rights abuses, and deforestation of ancient forests for farmland. 

The deeper into the supply chain, the higher potential there is for subcontracting, meaning that it can become easy to lose track of where your materials and components have been and who has contributed to making your products. The larger the brand, the more complex this can become.  

Let’s start with the basics. Below, we’ve outlined the tiers that are commonly found in most fashion supply chains and identified the potential risks involved at each level. 


Tier Zero

Tier Zero includes offices, distribution centres, and retail locations that are owned by a brand. They’re not involved in the production process but are worth mentioning in regard to impact reporting. Tier Zero is often where a brand will start when looking to reduce its carbon footprint. For example, they may run their distribution centre on renewable energy or have a no paper policy at their headquarters. Brands that do report on their carbon emissions will often report largely on their impact at Tier Zero because it is comparatively easier to calculate and implement changes than further down their supply chain. 


Tier One

Tier One suppliers are also known as direct suppliers because they’re the factories and facilities that cut, sew, package, and prepare a finished garment to ship to a brand. Fashion brands usually have a direct relationship with their Tier One suppliers. In recent years, campaigning by groups like Fashion Revolution has led to an uptick in brands disclosing their Tier One suppliers — in 2021 the Fashion Transparency Index found that 47% of 250 brands surveyed were making their Tier One supplier list public. We estimate that the majority of brands have not traced their supply chains beyond this tier.  


In this tier, the main risk that brands should be aware of is garment worker rights violations. The human impact of the fashion industry is immense. Brands that outsource clothing production to countries where there is no social safety net or minimum wage guarantees risk being complicit in human rights violations, including wage theft, physical and sexual abuse, unsafe working conditions, and union-busting. Brands should prioritize building a strong relationship with their Tier One suppliers to ensure that facilities abide by codes of conduct when it comes to garment worker rights and safety. This should include regular inspections and third-party audits of their Tier One suppliers. 


Tier Two

Tier Two suppliers produce the fabrics used by those in Tier One to make our clothing. It’s in this tier that processes like printing, ginning, spinning, embroidery and other embellishments, tanning, and laundering are performed. The 2021 FTI found that only 27% of brands surveyed published information about their processing facilities. Commonly, Tier Two suppliers have a direct relationship with Tier One suppliers, but it’s less likely that they work closely with a brand. This means if a brand wants to understand its supply chain beyond its direct suppliers, it will need to work collaboratively with its Tier One facilities to request information from Tier Two and beyond.


Many of the processes described above are chemical, water, and carbon-intensive in practice. Because Tier Two facilities are unlikely to be owned by the brand itself, they fall into the Scope Three emissions category. It’s believed that 80% of the fashion industry’s carbon footprint occurs in Scope Three (Scope One and Two refer to brand-owned facilities). The use of toxic chemicals in this tier has significant knock-on effects on the environment and on people. Factories have been known to dispose of hazardous chemicals and water waste into the local environment, which pollutes rivers and soil in nearby communities. This, in turn, has an impact on the health of those who work in these facilities, and those who live close to the facility. 


Tier Three

In this tier, raw materials are turned into fibers. For example, it’s where cotton lint is turned into yarn and where livestock are slaughtered for their hides. In this tier, fibers undergo spinning, dying, weaving, and other processes that prepare them to become materials in Tier Two. Most brands don’t have very much contact with or visibility over Tier Three suppliers, let alone report on them. 


There are a number of risks involved in this stage of the fashion supply chain. Much like Tier Two, high chemical and water use and improper disposal are concern areas in Tier Three. This tier can include a wide variety of facilities and factories due to its resource and labour-intensive nature. Subcontracting and informal work can be prevalent, so it is incredibly difficult for brands to investigate human rights, animal welfare, and environmental damage that may occur this deep into the supply chain.      


Tier Four

Tier Four refers to the raw material source, such as the farm that grew the cotton plant or raised the livestock. Fashion relies on agriculture for the production of cotton, wool, leather, the feedstocks for man-made cellulosics, silk, furs, hemp, linen, and many more materials. Because the cultivation and harvesting of raw materials rely heavily on the natural environment, its impact can be seen in everything from soil health to the biodiversity of natural ecosystems, the health of waterways and air quality. 


The risks involved with raw materials will be different depending on the material. Several factors must be considered, including the region that the material is sourced from and the processes it requires for cultivation. For example, conventional cotton involves high pesticide, insecticide, and irrigation use, and has a history of forced labor abuses in countries like China and Uzbekistan. Leather, on the other hand, has been linked to deforestation in the Amazon, where the rainforest has been destroyed to make way for farmland. Animal welfare abuses can occur in the farming of sheep, cattle, mink, and all other animals involved in fashion material production. 


Regardless of the complexity of your supply chain, it’s crucial that businesses of all sizes are implementing traceability solutions to ensure that social and environmental risks are being avoided and remediated if and when they arise. Only through traceability can businesses truly understand their impact on people and the planet, and use that to inform their sustainability strategies.  

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Take control of your supply chain risk, compliance, and impact with the world’s leading traceability platform for fashion, footwear and textile supply chains. Start by speaking with the TrusTrace team today.