A new report outlines the key takeaways from 15 legislative initiatives, with the hopes of giving suppliers a voice as the landscape evolves.
August 5, 2024
Brands are facing the reality of upcoming legislation that requires them to be transparent about the inner workings of their supply chain, including decarbonisation, forced labour and raw materials sourcing. Legislation is widely acknowledged as a step in the right direction for sustainability — but for suppliers, gathering this information can be a lot of extra work.
Yet the work of reducing the fashion industry’s impacts falls to them; brands make ambitious public promises for sustainability, but depend on suppliers to be able deliver on them. What do suppliers need to know, and how can they navigate the evolving legislation landscape?
That’s what a new report, ‘An Apparel Supplier’s Guide: Key Legislation in the EU, US & UK’, seeks to answer. Published on 31 July, it’s the second edition by a group of apparel suppliers working together to tackle shared challenges.
The fashion industry has long had a top-down approach to supplier relations, which means that the time, effort and resources required for supply chain reporting often disproportionately falls on suppliers over brands. In an effort to transition to stronger sustainability legislation and climate neutrality, Global North countries have put the burden to invest time and resources to comply with legislation on suppliers often based in producing countries in the Global South, which are sometimes more economically vulnerable. The report calls for supplier input to be taken into account as upcoming legislation continues to develop, so that the requirements are more actionable and equitable.
“Though well-intentioned, much of the legislation we looked at relies on a top-down approach to sustainability, which creates significant hidden work for suppliers who, in most cases, already disproportionately bear the burden of sustainability/due diligence relative to their margins,” the organisations behind the report tell Vogue Business collectively over email.
Crystal International Ltd, Diamond Fabrics Ltd, Lenzing Aktiengesellschaft, Pactics Group, Poeticgem Group, Shahi Exports Pvt Ltd, Simple Approach and the Sourcery teamed up to analyse the changes that are coming down the pike and to develop pathways to navigate them. They had support from sustainable development agency Giz Fabric, and denim industry non-profit Transformers Foundation, which noted the significance of competitor collaboration and hope the project inspires more suppliers to work together to create solutions in the future.
The report noted four main trends across its analysis of 15 legislative initiatives. Firstly, the report says some upcoming legislations (such as EU Corporate Sustainability Due Diligence Directive) have a focus on responsible purchasing practices, which the organisations encourage. This focus would improve the power balance between brands and suppliers, allowing suppliers to advocate for themselves.
Secondly, the report expects an increased burden of work on suppliers as brands may interpret legal requirements differently and, in some cases, different markets interpret requirements differently. As such, the report encourages suppliers to discuss implementation with customers and collaborate with each other to call for commonality.
Thirdly, suppliers are likely to face an increase in data requests, so the report stresses the importance of suppliers having their documentation ready (particularly on forced labour) and allocating resources for due diligence.
Finally, certain legislations pose a direct legal implication for suppliers, and brands may try to embed legal liability into their supplier contracts. The report recommends suppliers hire legal advisors, and to push back on any penalties that brands offload to them.
“This resource is intended to support suppliers — who, for the most part, have not been included in the development of the legislation itself — to understand what will be expected of them, and, where possible, ensure shared responsibility,” the organisations say.
The report has implications for brands and legislators, too. “[The report is] a voice for [suppliers] to help influence the legislative process and to help them get a seat at the table,” says Kavita S Dass, head of sustainability and fabric at Poeticgem Group. “The aim is also to make the legislators and brands aware of the challenges faced by the suppliers and manufacturers and that a collaborative approach that includes the supply chain will help ensure better delivery and a fairer playing field for all stakeholders.”
Last year’s report mapped 60 legislative initiatives with the potential to impact suppliers, and covered 12 legislations specifically. This year’s report includes updates to fact sheets on 12 legislative initiatives covered in last year’s edition. Each fact sheet contains an overview (including the status, scope and political context) of the legislation, recommendations for how companies should prepare for compliance and how it could impact suppliers. The fact sheet also highlights how the legislation is enforced (including the disclosure requirements) and what the penalties are for brands that don’t comply. Crucially, each fact sheet includes information for suppliers on how to participate in the development of each legislation, coupled with third-party resources for further research.
Gauri Sharma, general manager of ESG and innovation at Shahi Exports, notes there is a “need to recognise the efforts that suppliers need to make to comply and work with brands, industry bodies and their own leadership” to do this work. “[Brands] must show a level of flexibility to consider valid and fit-for-purpose certifications and audits that exist within the facilities to reduce supplier fatigue and use common platforms rather than creating their own audits,” adds Dass.
Major updates were made to five of the 12 legislations that were featured last year — including the EU Corporate Sustainability Reporting Directive, the EU Corporate Sustainability Due Diligence Directive and the EU Forced Labour regulation and guidance. Others, such as the New York Fashion Act and US Uyghur Forced Labour Prevention Act received minor updates.
This year’s report features three new fact sheets, too: for the German Due Diligence in the Supply Chain Act, the EU Strategy for Sustainable and Circular Textiles (which is not a legislation itself, but drives much of the emerging legislation in the EU) and the EU Directive on Unfair Trading Practices in the Agriculture and Food Supply Chain (which has lessons for fashion due to the similar asymmetrical relationships between suppliers and brands, the organisations claim).
As the legislative landscape continues to evolve, the organisations involved in the report stress the need to prioritise a just transition and a shared responsibility model — both of which have been missing in most of fashion’s sustainability efforts to date, and which will not become a reality without deliberate effort.
“What we don’t want is that legislation further exacerbates existing inequalities between brands and suppliers and risk continues to be passed down to suppliers,” says Sharma.
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