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