As the fashion industry comes under scrutiny regarding social and labor rights, consumers and governments are pushing for companies to be legally required to undertake human rights due diligence.
According to the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, due diligence is a risk management process that companies carry out to identify and respond to current and potential negative impacts related to their own operations and throughout their supply chains. The OECD’s due diligence procedure has emerged as a pivotal reference point in this evolving legal framework, guiding companies on a more ethical path. The procedure is based on six points.
The first step is to develop, implement and communicate a policy on human rights due diligence and further incorporate policies and expectations in supplier and business relationships.
Identifying and assessing actual and potential adverse impacts associated with the enterprise’s operations, products or services is the second. A risk assessment is performed throughout the whole value chain.
Cease, prevent and mitigate adverse impacts is the third. Once identified, companies are expected to act on the most significant risks and develop and implement a remediation plan to cease, prevent and mitigate them.
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The fourth step is to track implementation and review results. Companies must establish a monitoring process to evaluate the effectiveness of due diligence procedures, working in a continuous improvement mode.
Communicating how impacts are addressed is the fifth step. Stakeholders shall be informed about human rights due diligence procedures, risks, activities, and findings.
The final step is to provide or cooperate in remediation when appropriate. Working together with other parties would be crucial to enable remedies and provide grievance mechanisms.
Awakening of legal changes: New global legislations
Upcoming legislation in Europe will be developed from the proposal for a European Union (EU) Directive on Corporate Sustainability Due Diligence Directive (CS3D), which will initially apply to large companies or those in high-impact sectors, including textiles, agriculture, extraction of minerals and more. Even though small- and medium-sized enterprises (SMEs)—which represent 99 percent of EU companies—are excluded, it’s estimated that around 16,800 companies worldwide will be directly affected, as they’re exposed to the directive through business relationships with companies in the scope.
Additionally, some European countries have already adopted their due diligence laws, including Norway, the United Kingdom, Germany and France. Countries such as Poland, Spain, Italy and Ireland are currently developing the law. Outside Europe, early developments in California and Canada as well as already-established legislation in Australia and New Zealand are underway. This is a worldwide push for private companies to ensure the human rights of people working for them and in their supply chain.
Recover’s responsible sourcing policy
Aiming to be a frontrunner in sustainability, fiber recycling company Recover™ is already working on compliance with the due diligence procedure, regardless of not being under the CS3D scope. As mechanical recyclers, our feedstock is textile waste. Therefore, the Recover™ supply chain is broad and complex as we source from different countries. Since every country has different social and economic structures, we must adapt to the needs of each culture, always ensuring human rights compliance.
To generate sound relationships with our suppliers, the Responsible Sourcing Policy has been launched. The idea of this policy is to ensure that Recover’s raw material is textile waste and that providers of these materials are improving their compliance with Recover’s help. This is a long process where both Recover™ and the supplier will work together day-by-day, building trusted business relations and pursuing compliance according to national and international standards.
The purpose of responsible sourcing is to use our purchasing power to influence suppliers’ business standards for the better. Therefore, when breaches of Recover’s Code of Conduct for Business Partners are detected, the company can assess their severity. The normal response to non-compliance should be to follow up with the supplier through requirements, dialog and guidance. We work in partnership with producers and suppliers to transform the way we source and create new values to be shared by all.
At Recover™, we truly believe in change for more transparent and traceable textile supply chains, enhancing workers’ rights and environmental protection across different players.
This article was written by Ana Rodes, head of sustainability at Recover™.
To learn more about Recover™, click here.