Tesco clothing chief Terry Green has warned that fashion retailers must make the provenance of their product transparent because offering value is not enough for today’s customers.

Green, who addressed the Retail Week Conference on Wednesday, said the industry faces a “new value equation”.

He said: “In the past it was good enough to have the right stock and provide value for money. But now retailers need the right stock with the right provenance.”

Green - who this week unveiled a six-piece collection made from recycled materials in partnership with ethical label From Somewhere - said retailers need to make their ethical credentials clear.

He said: “The new value equation means offering value with the right ethical background. Customers are saying to the industry: ‘Don’t make me feel guilty for buying your merchandise’.”

He advised retailers to work harder with suppliers to ensure transparency. “The ethical issue has never gone away in the recession and retailers can’t just pick up the mantle and then drop it because times get tough,” he said.

Tesco’s recycled range, called From Somewhere to F&F, is made from obsolete jersey stock, damaged end of rolls and textile waste. The range is priced from £16 and is available online initially, but is expected to be in stores later in the year.

This week Marks & Spencer also bolstered its ethical stance by adding 80 commitments to its Plan A programme in order to become “the world’s most sustainable retailer” by 2015.

Every one of M&S’s 2.7 billion items sold will incorporate at least one sustainable or ethical quality, and the retailer pledged that clothing suppliers in Bangladesh, India and Sri Lanka will pay a “living wage” to workers.

M&S head of sustainable business Mike Barry said shoppers increasingly expect big companies to address ethical and environmental concerns. He said the switch to a living wage would carry no extra cost for consumers because a pilot scheme showed ways of improving productivity and management practices.

Barry added that Plan A overall has already saved M&S £50m, illustrating that corporate social responsibility also makes commercial sense.