ESG Mena interviewed Khaled Arnaout, Director of Audit and Compliance with the BFL Group, to discuss sustainability within consumerism and how to avoid products going to waste in a growing demand for fashion and lifestyle products.
- In terms of ESG, what is the status of the fashion industry currently?
Everyone realised that whatever we are doing harms the environment, from the food we are eating and how they process it, to the animals that they are killing to get the leather for bags and the clothing that they are producing – or overproducing, I should say – and then throwing it or dumping it in landfill.
Questions are asked such as; okay, what is the cost of this overproduction? What is the cost of the material that we are using in the production? What is the cost of labour? How much labour abuse am I doing when I am producing my products? Am I producing it in certain. countries where they work below the standards that are assigned or defined by the EU or other regulators?
So now there is a lot of pressure from everyone, on all the companies, on all the brands, in terms of sustainable products. Some people know what sustainable products are, and some people do not know. Some people do not want to know. That’s why my role and your role of educating people is very important.
If we believe that we cannot continue in the way that we are, first of all we should all agree that continuing at the same pace as we are now, by producing and overproducing, by killing animals, by the child labour, and by abusing the labour force, we should ACT on why it cannot continue.
- What would be the outcome of these things continuing to happen?
All these seminars, all these workshops, all these meetings, COP28, COP29… all these for what? If we continue at the same pace in 2050, we will not live – we cannot live. Maybe not 2050, maybe 2030, maybe we will not reach 2050 because maybe the temperature of the world will go higher than we can live in.
- What is BFL Group doing to try and incorporate ESG principles into its practice?
Whenever we deal with new suppliers, we have a checklist or questionnaire, we have an inspection of the factories and the supplier, warehouses as well, before we buy these products. We call them licensed products or private labels, so the factories we deal with, they have to attain a certain score.
They have to achieve a certain score, and they have to be in compliance with sustainability. We produce in India, Pakistan and Turkey. We recently moved to Turkey because in India, they almost get that passing score, and ethics is very important in business.
My definition of ethics is, I tell people to do the right thing, even if no one is watching them. That is when you go and visit, and do an inspection. When we plan a visit, we make sure that it is a surprise visit, we make sure that they comply with the sustainability standards.
We buy leftover stock, so ‘Brands for Less’ is an initiative towards sustainability. How? By proving a new life cycle to the product, because if I’m not buying this product, someone else will dump it. The product is sold for a lower price, I’m giving it to a person who may not be able to buy it otherwise.
Some brands prefer throwing it into landfill, to not sell the products for a lower price, which is unethical.
Some of the products we receive might be damaged, so we have created an asset recovery department, in order to resell.
We also sell some products to partners such as Clear Earth, who can recycle them into threads. We also sell some items to PPi, who create shrink wrap plastics for packaging. When we buy from a supplier, the products come in cartons. We purchased a machine that transforms the cartons into material used to wrap fragile items when we send them to the stores.
We have solar panels across all our warehouses, connected to the grid – 40 per cent of our power is through solar, our aim is to achieve 100 per cent by 2035, but because it’s connected to the fried, we can’t reach 100 per cent so far.
- What about labour rights and proactive management?
We are ranked the number one retail company in the GCC, the happiest place to work. Instead of being the police and catching mistakes, we protect the employee. I don’t punish employees, I protect them.
We are working on a proactive basis with all departments to prevent and mitigate risks, rather than find risks later on. In my department, all the managers visit me on a daily basis. I credit and listen, we discuss what we think we have to do, rather than let them do it and make a mistake.
We do monthly meetings with all the staff, whether office staff or warehouse staff, and do lots of surveys. We have surveys where you can scan a QR code and write it, no one knows who you are. We have a whistleblower policy to listen to what’s happening – in case someone might be abusing tor taking advantage of lower-level employees.
We have a monthly incentive programme for warehouse employees and store staff. You achieve targets on a monthly basis, and we have employee of the month, manager of the month, and all these incentives in order to improve the wellbeing of our employees.
We have medical programmes, every month or two months, you will see a medical consultant, they inform our awareness for a heart check. We have an eye check, heart check and a blood test.
We also have a department responsible for the health and safety of our employees, they inspect the warehouses and stores to ensure our employees are working in a safe environment.
We offer free transportation to all our employees and we have installed our first EV charger in our office.
- How do you incentivise customers to recycle unwanted products?
We have added boxes to our stores for customers to bring the unwanted clothing and toys, and we take these items and donate them to certain organisations. In the UAE, the customer will take loyalty points in exchange for these items.
- How do you see the future of sustainable fashion in the Middle East?
The awareness across customers is increasing. It’s at a very low rate, but it’s increasing. I believe that the governments in the UAE and KSA are doing a lot of initiatives to help increase awareness. This is very important.