Fast fashion giants H&M and Zara have used cotton from farms linked to massive deforestation, land-grabbing, corruption and violence in Brazil, a report by the environmental group Earthsight said Thursday.

Based on satellite images, court rulings, shipment records and an undercover investigation, the report, titled “Fashion Crimes”, found the companies sourced “tainted cotton” farmed in the fragile Cerrado savanna by two of Brazil’s biggest agribusiness firms, SLC Agricola and the Horita Group.

Despite abuses linked to its production, the cotton had been labelled as ethical by leading certification scheme Better Cotton, exposing “deep flaws” in the oversight program, said the British environmental group.

The Cerrado, the most biodiverse savanna on Earth, has been disappearing at an accelerating rate as Brazil’s massive agribusiness industry has increasingly turned to the region in recent decades.

Earthsight traced at least 816,000 tonnes of cotton exported from 2014 to 2023 to farms run by SLC and Horita, which “have a long record of court injunctions, corruption rulings and millions of dollars in fines related to clearances of around 100,000 hectares of Cerrado wilderness,” it said.

The cotton in question was farmed in the northeastern state of Bahia and shipped to eight Asian clothing manufacturers whose clients include Sweden-based H&M and Spain-based Zara, the report said.

Brazil, the world’s top exporter of beef and soybeans, has also emerged as a major cotton producer in recent years, now second only to the United States.

But that has contributed to environmental destruction in the Cerrado, where “a ruinous mix of corruption, greed, violence and impunity has led to the blatant theft of public lands and dispossession of local communities,” Earthsight said.

Better Cotton said in a statement it had conducted an independent audit of the “highly concerning issues raised” in the report, and that it would provide a summary of the findings.

Zara parent company Inditex and H&M said they took the allegations seriously, and urged Better Cotton to release the auditors’ findings.

The Brazilian Cotton Producers’ Association (ABRAPA) said it had worked with the growers in question to provide records and evidence countering the report’s allegations.

“Unfortunately, these were largely disregarded,” it said in a statement.

“ABRAPA unequivocally condemns any practices that undermine environmental conservation, violate human rights or harm local communities.”