A group of leading apparel suppliers have launched An Apparel Supplier’s Guide 2.0: Key Sustainability Legislation in the EU, US & UK.
- The Guide has been launched in the backdrop of the increasing and urgent need for suppliers in the Global South and other manufacturing regions to understand the implications of new laws on their operations.
- The version 2.0 of the Guide includes revised factsheets for the 12 legislative initiatives covered in the 2023 edition of the report, besides three new ones that address additional legislative efforts not previously included.
- These updates provide an overview of the evolving legal landscape and offer valuable insights into the potential impacts on suppliers.
- The Guide was commissioned by: Crystal International Group Limited, Diamond Fabrics Limited (Sapphire Group), Lenzing Aktiengesellschaft, Pactics Group, Poeticgem Group, Shahi Exports Pvt Ltd, Simple Approach, Sourcery.
- The research was also supported by Transformers Foundation and GIZ FABRIC.
HIGHLIGHTS AND TRENDS: Four highlights and trends feature in the 213-page document:
- Responsible purchasing practices and shared responsibility requirements in CSDDD will foster more balanced trading relationships and integrating brands' purchasing practices into the risk equation.
- Multiple interpretations will lead to duplication of work for suppliers. This will be due to different brands interpreting legislations into different requirements and programmes for suppliers, and varied interpretations of EU Directives for EU Member States.
- Increasing reporting requirements and data requests including full supply chain traceability and involvement in textile processing to meeting requirements of legislations such as ESPR.
- Potential legal implications for suppliers through UFLPA, EU Forced Labor Act, and German Supply Chain Due Diligence Act. Further, where suppliers are not legally liable, their customers/brands might seek to create this liability through contractual documents.
RECOMMENDATIONS: The document also includes a host of recommendations:
- Suppliers can demand for fairer practices, through their collective voice, and learn from legislation in allied sectors like agriculture on unfair purchasing practices.
- Proactively discuss with your customers how they will implement legislation in the supply chain and prepare for requests to adopt third-party grievance tools. Aligning with OECD Due Diligence Guidelines and UN Guiding Principles may minimize some risk for suppliers.
- Advocate for industry bodies to drive commonality in audit requirements, and advocate for harmonization across Member States
- Map your supply chain and ensure you have documentation for orders as per UFLPA and EU FLA to prepare for potential detentions by Customs Authorities.
- ESG teams should engage and educate HR, legal, sourcing to shift mindsets from “compliance” to “due diligence”
- Develop stronger data gathering and management capacity (e.g. LCAs) and digitize where possible.
- Seek/onboard competent legal counsel, proactively prepare documentation in case of detentions by Customs Authorities.
- Push back on fines and penalties being offloaded by brands onto suppliers.
