Environmental and human rights due diligence – Considerations for apparel companies as new law looms

Anna Triponel | 1 March 2021

This article was first published in Just-Style here

Having described the story so far in human rights and sustainability – and the new chapter starting in 2021 with consultation on an EU law on sustainable corporate governance – Anna Triponel now looks at how apparel companies can best prepare for the journey ahead, and how they can inspire others to join them.

Looking ahead: how can apparel companies best prepare?

The best place to start – in response to recent developments described in Part 1 – is to pause and reflect on what the business has in place already, and how it can build on lessons learned, both within the company as well as from peers in the industry. I see the following six questions as fundamental for anyone looking to embark on this journey meaningfully in the sector:

  • Transparency is key: What do I know about where the products my company relies on are made?
  • Walk a mile in their shoes: What do I know about supplier realities?
  • The voice of truth: How can we find out about worker realities on an ongoing basis? 
  • Vulnerability exposed: Are there some suppliers we should prioritise in our efforts?
  • No quick fix: How can we support an eco-system of respect?
  • Saving the planet in the future, at the expense of people today: How to bring human rights and environmental considerations together?

Let us delve further into what these six questions entail.

#1: Transparency is key – What do I know about where the products my company relies on are made?

Anyone who has worked on supply chain transparency knows it’s harder than it looks when reviewing the final results on a glossy supply chain mapping displayed on a corporate website. Suppliers may not be eager to disclose details about their own production practices and who they rely on, supply chains are fluid and can change rapidly, and the sheer volume of suppliers can be overwhelming.

It can help to think about how your company can incentivise transparency and embed these expectations into the process for garment production. What’s in it for the suppliers providing details to you? What gives them the confidence that they will continue to be valuable business partners once your company has gained visibility into their production practices? How can transparency become part and parcel of the expectation for doing business at the outset? Can there be specified trigger points for when suppliers disclose information, alongside other information, for instance related to quality?

#2: Walk a mile in their shoes: What do I know about supplier realities?

It can be tempting to resort to a compliance-based approach. This typically takes the form of a policy outlining expectations, changes to supplier contracts compelling these standards to be met, making clear that any infringements to these standards can be cause for termination of the relationship, and conveying that monitoring will take place in the form of audits.

While these measures may have a role to play, take a minute to place yourself in the shoes of a manager at one of your suppliers. How easy, or hard, is it to meet expected standards in practice? Is modern slavery prohibited, in a context where recruitment of workers is premised on the payment of high recruitment fees? Is child labour prohibited, in a context where children regularly support their parents and age verification systems are lacking? Is freedom of association requested, in a context where national systems crack down on trade union leaders? Is zero-discrimination the standard, in a location where discrimination against certain groups is culturally acceptable or enshrined in the law? Is excessive overtime prohibited, in a context where orders are changed frequently at the last minute?

The practice of companies looking to meet the spirit of these laws is to take an approach based on the realities their suppliers are in, while finding ways to push for meaningful change. This means exploring a path of change, rather than easy wins: creating open candid discussions with suppliers to discuss the challenges of tackling some of these issues, incentivising suppliers to make progress on tackling them, resisting the lure of ‘quick-fix’ solutions (such as requesting suppliers to take actions that focus on process creation rather than improving outcomes for people), and looking inwards to how your company’s business model – in particular when it comes to price points, forecasting and product changes – could make it harder for suppliers to live up to human rights and environmental expectations.

#3: The voice of truth: How can we find out about worker realities on an ongoing basis? 

Another tempting approach is to expand hotlines beyond employees. Let us reflect on the effectiveness here. In some supplier contexts, managers may not see the value of workers expressing grievances, seeing these at best as nuisances to be avoided and at worst as signs that certain workers may stir up trouble and are not welcome in the workplace. In others, workers may not be allowed by law to advocate for their rights, or prevailing culture may hinder the ability of workers to raise one’s voice and be seen to ‘complain.’ In other contexts, workers that are highly dependent on the income to support themselves and their families may not see it as a worthwhile risk to raise a concern, with the corresponding risk of losing a job.

The focus on voice, grievance mechanisms and enabling remedy is a focus on changing mindsets of managers, over time, to identify the value of hearing from their workers. This is about creating workplaces where people feel that they can raise their voice and see their concerns addressed, on an ongoing basis. This is about restoring the imbalance of power between apparel workers, often on low wages and in quite precarious situations, and their managers. Tick box approaches to grievance mechanisms are on their way out, and approaches based on culture change are on their way in.

#4: Vulnerability exposed: Are there some suppliers we should prioritise in our efforts?

Naturally, your company can’t do it all. Your company is already accustomed to prioritising suppliers for attention, maybe because they provide a valuable component of clothing for which there are few alternatives, or because the company’s spend is particularly high. This is all well and good, and apparel companies will continue to prioritise what they need for their businesses to run efficiently and at a profit. Due diligence laws add in a second category of suppliers to prioritise for human rights and environmental expectations: Where are the risks to people the greatest within my company’s suppliers? Where are there workers most vulnerable to exploitation and human rights harm, and where are there communities most subject to environmental degradation?

Prioritisation in a company’s supply chain might be by virtue of individual, or context-specific situations. It can help to think about where there are people most at risk. Where are the migrant workers? Where are the home-based garment workers? Where are the lower-income workers in state systems with weak social safety nets? Where are the workers in countries where workers are routinely retaliated against? It is acceptable to select a sub-group of suppliers and workers to focus on to get meaningful traction: indeed, in light of how challenging some of these issues are to tackle, it may be the only way.

#5: No quick fix: How can we support an eco-system of respect?

No one working on these topics will say that these issues are easily tackled. There is a reason why certain human rights and environmental challenges continue to be salient, even years after knowing about them: because they occur within an eco-system and are challenging to tackle. Modern slavery could also be called ‘how recruitment is done’ in some countries. Child labour could also be called ‘how communities get by to alleviate poverty’ in some countries. Water and pollution impacts could also be called ‘simply complying with environmental laws’ in some countries. One apparel company alone may simply be unable to tackle an issue at scale, in a sustainable manner – no matter how much it tries.

This explains why we have seen a growth in collective leverage initiatives, moving beyond individual corrective action plans with suppliers, that seek to tackle the root cause of the issues. The apparel sector was a pioneer in taking collective leverage seriously – in part due to the wake-up call from the Rana Plaza deaths. The resulting Accord on Fire and Building Safety in Bangladesh showed that companies could work together with other relevant stakeholders to improve working conditions. Subsequent initiatives are noteworthy, including in particular ACT, an agreement between global brands and trade unions that seeks to achieve living wages for workers through collective bargaining at industry level, freedom of association and purchasing practices.

In the environmental space, the UN Fashion Industry Charter for Climate Action provides an example of sector-led collaborative measures on climate change – with a specific focus on ensuring governments take actions that are needed to level the playing field when it comes to limiting average global temperature rise to 1.5 degree Celsius. And we have seen national initiatives push boundaries in terms of commitments made by apparel companies, including for instance 63 UK retailers under the aegis of trade association the British Retail Consortium (BRC) committing to an ambitious goal of every UK customer being able to make purchases by 2040 – in store and online – knowing that they are not contributing to climate change.

Collective creative leverage – with peers, but also across sectors and with governments, trade unions, civil society and other relevant stakeholders – will continue as the urgency to tackle certain challenges becomes clearer.

#6: Saving the planet in the future, at the expense of people today: How to bring human rights and environmental considerations together?

Human rights and environmental considerations tend to be treated in silos within companies – and yet, the upcoming EU law on sustainable corporate governance requests that both be considered together. This is absolutely right: the bridge between the two fields needs to be built. Creating synthetic fibres out of recycled plastics can help the environment, but also poses human rights risks to vulnerable waste pickers. Changing packaging to be more environmentally friendly is positive, but dropping suppliers overnight can lead to immediate impacts on their workers. A shift to renewable energy will help reduce a company’s carbon output, but may in turn link the company to land grab and eviction.

The push for a just transition is one in which workers, and neighbouring communities, are considered as part of a company’s environmental commitments. Being prepared now means asking some fundamental questions about how the company is organised. How can we create synergies between the company’s human rights and environmental work? How can a human rights lens be integrated into environmental work? How can consideration for the climate and longer-term impacts on people be integrated into human rights due diligence? How can my company consider how environmental measures and commitments may inadvertently harm people, and take appropriate mitigation steps?

We have had to face lots of uncertainty over the past year. But one thing is certain: 2021 will be a year of consolidation of all the human rights and environmental trends we have seen to date – with more teeth, benefits and opportunities for the apparel sector. No company can say they have it all covered, but every company can say that they are trying. And soon, the add-on consideration for human rights and the environment may simply become part of apparel company business models – just as the EU has envisioned it.

Click here to read Part 1, which looked at the story so far in human rights and sustainability and the new chapter starting in 2021.

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