Trenchcoat warfare: Burberry’s bad press on stock incineration

The Times sparked something of a furore when it reported earlier in the month that Burberry deliberately incinerates millions of pounds worth of unwanted stock each year. The story found its way onto the agendas of many other newspapers and broadcasters. Outrage abounded on Twitter, as it so often does, with people petitioning for the practice to be outlawed – even though it is already of questionable legality.

That’s because in 2011 the government placed legal obligation on everyone in England and Wales involved in the production or management of waste to take “all such measures available to it as are reasonable in the circumstances” to apply the waste hierarchy. The hierarchy is a well-known rule of thumb to guide waste management, which gives waste prevention the highest priority, followed in descending order by reuse, recycling, energy recovery and disposal.

Burberry appears to be consigning for energy recovery material whose waste might reasonably have been prevented – whether through less production, selling at a discount, or charitable donation. If these options were not open, alternatively, many of the products seem suitable for recycling.

Target practice

Burberry admitted its questionable practice in a rather oblique statement on p165 of their 2017-18 annual report, which states:

“The cost of finished goods physically destroyed in the year was £28.6m (2017: £26.9m), including £10.4m of destruction for Beauty inventory.”

But elsewhere the report shows that the company has quite a good story to tell about its environmental and social credentials. They can point to solid achievements and stretching targets across their operations – from the sourcing of materials, through the management of their supply chain and the operation of their stores – and even on waste management. These include:

• Procuring 21% of their cotton through the Better Cotton Initiative, with the aim of reaching 100% by 2022 – by which time they also plan to source all their leather from tanneries with environmental, traceability and social compliance certifications;
• Conducting hundreds of audits and training programmes with international suppliers, with the aim of supporting them to build stronger human resource management;
• Sourcing 48% of their energy from renewables, double the previous year’s figure, with the aim of reaching 100% by 2022;
• Achieving a 4% reduction in overall energy consumption through behaviour change and switching to more efficient technologies such as LED lighting – with the aim of eventually becoming net zero carbon; and
• Recycling 52 tonnes of damaged garments into geotextile materials and 51 tonnes of pre-consumer textile waste into regenerated yarns, fabrics and automotive insulation materials, as well as giving their leather offcuts to a company called Elvis and Kresse, which uses them to make ‘lifestyle accessories’ (mostly handbags, it would appear).

Off brand

Though Burberry’s handling of its ‘deadstock’ appears reprehensible, it is very much the tip of the iceberg. In some ways, the company can count itself as unfortunate that it has become the focus of media attention. Burberry courted trouble simply by being one of the few fashion firms to actually disclose how much stock they waste and what happens to it. When a company that is so clearly working hard to do the right thing doesn’t appear to have regard to the waste hierarchy, it is not surprising that similar practices are rife elsewhere in the industry.

Less prominently, articles mentioned that other high-end brands, including Louis Vuitton, Chanel and even watchmaker Cartier have destroyed deadstock. The practice isn’t limited to the top end of the market. According to Danish TV, H&M has incinerated 12 tonnes of deadstock since 2013; Nike is reported to have slashed holes in unsold trainers before disposing of them; and Urban Outfitters are said to have poured green paint on surplus clothes, ensuring that they cannot be reused or recycled. None of these practices appear to be consistent with the waste hierarchy.

Bag to rights? Burberry’s deadstock management practices appear to breach their legal obligations. Photo: j_10suited (CC BY 2.0), via Flickr.

Nor should we come away with the impression that such problems are restricted to the fashion sector. Walk around any city centre in the UK and you will see businesses with just a single residual waste bin outside their premises. They don’t take straightforward steps to recycle, even though doing so would probably reduce their waste management costs.

Scotland and Northern Ireland have legislated to specifically require businesses that produce large amounts of food waste to separate it for recycling; in England and Wales the waste hierarchy would appear to give rise to a similar obligation, but many businesses don’t bother.

Café chain Boston Tea Party has recently decided entirely to stop using single use cups: if it can do so without unacceptable consequences for its business, does that make banning single use cups a reasonable measure for all cafes?

Similar logic can be applied to local authorities. Almost half of English councils find it reasonable to collect food waste separately from households; yet the majority do not despite its being the greatest single stream of potentially recyclable material in their residents’ bins.

Prima facie breaches of the waste hierarchy are commonplace, notwithstanding that every business is required to produce waste transfer notes covering all of the waste they generate – and to declare on each note that they have applied the waste hierarchy. A potentially powerful piece of legislation appears to have been reduced to a tick-box exercise.

Duty calls

That’s why I’ve called on the Environment Agency to investigate whether Burberry has breached the waste hierarchy. They’re based in England, and enough of the facts of their deadstock management practice are in the public domain to give rise to concern that they have not followed the law. They’re also an organisation that might well be minded to change their practice if they recognise that they’re failing to do what the law requires.

Because the story has gained so much prominence, were Burberry to change their practices as a result of the Agency getting involved, it would help draw other businesses’ attention to their legal obligations, as well as giving rise to greater expectation that a failure to apply the law might have negative consequences.

I should add that the waste hierarchy allows for exceptions. Businesses can depart from the normal priority order where doing so is justified – but the justification is supposed to be that departing from the hierarchy will help to:

“achieve the best overall environmental outcome where this is justified by life-cycle thinking on the overall impacts of the generation and management of the waste.”

Devious means

Four considerations are supposed to feed into the lifecycle thinking:

• the general environmental protection principles of precaution and sustainability;
• technical feasibility and economic viability;
• protection of resources;
• the overall environmental, human health, economic and social impacts.

There is no detailed guide to how organisations should work through these considerations. However, Defra’s statutory guidance on the topic discusses only one justified deviation: the use of anaerobic digestion (classed as energy recovery) to treat food waste, in preference to composting (classed as recycling). It does justifies this solely on grounds of overall environmental outcomes, which perhaps indicates that this is the form a justification should take.

Burberry has said that it did apply the waste hierarchy, which presumably means they must believe their decision to depart from it was justified – but they have not made their reasoning public. I think it would make the position clearer for businesses if Burberry was to publish its thinking, and if the Agency was to reach a view on whether their rationale is satisfactory.

So far, though, I have not heard back from the Agency regarding my request. Coincidentally, I’ve been looking into the way the Agency has approached enforcing the waste hierarchy over the last few months, and – whatever happens with my request – I will update Isonomia readers regarding its outcome and how this sits alongside the Agency’s wider approach to enforcement.