24 July 2024
Digital Product Passport: The New Era of Transparency and Traceability
- Production
The EU legislation and policy framework
Do experts deem new laws feasible for implementation?
The dominant business model in fashion is a linear model which is characterised by low production costs and high environmental damage. This needs to change. Laws and policies are an important tool to do so.
On our Fashion Community Night, we sat down with several experts to take a closer look at the laws and policies in the fashion industry, on several decision making levels. Together with Sara Ceustermans (Cleaner Clothes Campaign), Jo Van Landeghem (Creamoda), Bruno Van Steenberghe (Kalani) and Koen Van Troos (Fairtrade Belgium), we talk about new legislations, human rights due diligence laws and how to hold companies accountable for their actions.
Why are laws and policies important?
Still no consequences for polluting companies today
Sara Ceustermans kicks off the panel by informing us that ‘all the sustainable initiatives and guidelines that are out there are still voluntary’. A company can still choose to not adopt sustainable measures at the moment. It’s up to the willingness of a company to be sustainable. Soft laws don’t have consequences for companies who are not taking responsibility or climate action. Companies will not be motivated to take care of the environment, because there is still no punishment if they don’t. However choosing to produce in a sustainable way, will not only benefit the workers and the planet but also the industry itself as the sector will be less dependent on fluctuations in prices.
Unfair competition between companies
Soft laws and voluntary initiatives are really problematic for the fashion industry because the companies who invest in a sustainable supply chain will have to compete with companies who don’t. The transition towards a more ethical and circular business model required financial measures. Today, the most polluting companies are still able to gain lots of profit at the expense of the workers and the environment.
‘Legalization will create a level playing field and create more legal certainty for businesses who want to become more sustainable’ concludes Sara Ceustermans. In order to further avoid competition, legislation should be applicable to all companies, not only for the Belgian companies but for all companies active on the Belgian market. Today Belgian retailers are often unable to compete with the low prices given on online international platforms.
SME’s can not follow the same rules as multinationals
Laws and policies dictate the rules for the industry and can help to navigate companies towards ethical choices. Companies will need to take action depending on their size, business model and position in the supply chain. This way an SME (Small and medium-sized enterprises) will not have to take the same actions as a big international company. This is logic, because SMEs and big multinational companies will face different challenges and have a different environmental impact.
Jo Van Landeghem elaborates that ‘99% of the fashion industry are SME’s, not multinationals’. However most of the negotiations on legislations are held with international companies. It’s important to have actors such as Creamoda who look from an SME perspective on how legislations can translate throughout the whole industry.
Types of legislations
Human Rights Due Diligence
Human rights due diligence is a way for enterprises to proactively manage potential and actual adverse human rights impacts with which they are involved. Through these frameworks, the EU hopes to ensure a safer work environment for the workers.
After 7 years of talks, the new due diligence laws are finally here, explains Bruno Van Steenberghe (Founder of Kalani). These laws will make all the companies responsible for their social and environmental impact. Bruno continues that the broad scope of the new due diligence laws are still unclear. Will they focus only on large corporations or only SME’s?
On Belgian level, however, nothing has moved yet. Our neighbouring countries (France, The Netherlands) have already made progress with some laws to meet the Due Diligence framework. In order to take action, Kalani and several other companies such as The Shift (Sustainability Network of Belgium), Oxfam Belgium and other associations and federations have all written a letter to request a law for mandatory due diligence for Belgian companies. This letter had been signed by 60 companies. Bruno Van Steenberghe elaborates that many companies are in favour of the laws, and would like for the Belgian government to take action.
The letter was handed over to the governments, although there is some willingness to move forward it’s still unclear what the outcome will be.
Together with the signees of the letter, we at COSH! also hope that the Belgian government will take the willingness of the companies seriously and make the due diligence laws mandatory for the Belgian companies. This way we can create a level playing field, where there is no unfair competition between companies. We believe that making the laws mandatory can create a huge shift towards a more ethical fashion industry.
Global frameworks to holding companies accountable
How can we hold companies accountable for their actions? From Jo Van Landeghem we learn that there are several existing frameworks. On the global level there are a lot of actions:
- UN Sustainable Development Goals (SDGs) present 17 goals to aim to end poverty, protect the planet and ensure prosperity for everyone by 2030. These goals are applicable for companies, governments and consumers.
- UN Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability principles and to undertake partnerships in support of UN goals.
- International Labour Organisation (ILO) is devoted to promoting social justice and internationally recognized human and labour rights.
- OECD guidelines aim to encourage the positive contributions multinational enterprises can make to sustainable development and to minimise the difficulties to which their various operations may give rise.
- EU Green Deal is a common plan to make the EU’s economy sustainable
- EU Economic Action Plan targets how products are designed, promotes circular economy processes, encourages sustainable consumption, and aims to ensure that waste is prevented and the resources used are kept in the EU economy for as long as possible.
- EU Revision of the Non-Financial Reporting Directive lays down the rules on disclosure of non-financial and diversity information by certain large companies. It ensures corporate sustainability reporting.
- EU Textile Strategy will help the EU shift to a climate-neutral, circular economy where products are designed to be more durable, reusable, repairable, recyclable and energy-efficient. It aims to ensure that the textile industry recovers from the COVID-19 crisis in a sustainable way.
These types of legislation show that a lot will be happening in the next few years. However the level of action will not be the same for a multinational company compared to an SME. SMEs are too small to align with huge international frameworks, which are often nog adjusted to their supply chain needs.
bAwear: a solution for SMEs
To tackle the challenges for SMEs, Creamoda has been working for the past 3 years to set up a system to support transparency and sustainable action on the level of SMEs. This framework is also applicable for a sewing atelier in Antwerp who has only 3 employers. This solution is called bAwear.
Besides environmental criteria, bAwear now also is implementing social criteria.
bAwear is a corporation between multiple technologies, which has been trial tested multiple times and will be further tested in Belgian by Creamoda. A solution for SME’s to also take environmental and social action, but on a level which is feasible for them.
Workgroup transparency & traceability – United Nations Economic Commission for Europe
Euratex is the voice of the European apparel and textile industry. Through this European Confederation, Jo Van Landeghem, Quality, Safety & Sustainability officer at Creamoda, has subscribed to a call of the UNECE to create solutions for more traceability and transparency. The working group has been launched in 2019 and looks at the needs of the supply chains, available technologies and other risks that need to be taken into account.
In 2020 the UNECE has launched a toolbox and a recommendation of how to make the value chain in the garment and footwear industry more transparent. Companies who are interested in this recommendation can read it here on the website of UNECE.
Laws and policy alone will not save the world
Companies need to have an intrinsic motivation
We at COSH! are happy to see how many laws and policy recommendations are being made to ensure a sustainable supply chain. We agree a legal framework is crucial for the future, however we also believe companies and governments will need to adopt an intrinsic motivation to support more transparency, a local supply chain and recycling schemes. This intrinsic motivation is needed to guarantee direct climate action. By choosing for a sustainable production with more local supply chains, the sector can reinvent itself while also safeguarding environmental and social boundaries.
More transparency needed
Jo Van Landeghem explains that we used to have more transparent supply chains in the past. Due to internationalisation, the supply chains got more and more complex with fever transparency.
According to Sara Ceustermans ‘It’s crucial for a company to communicate on the initiatives that they are taking’. Jo Van Landeghem agrees and take it further that more transparency is needed throughout different sectors such as the food industry of the car industry. Transparency is much needed.
COSH! hopes companies will communicate in an honest way with their consumers in order for them to be able to make a conscious decision when shopping.
It’s a shared responsibility
Jo Van Landeghem emphasized the crucial role of governments and consumers. Bruno Van Steenberghe agrees that changing the fashion industry is a shared responsibility of all companies, governments and consumers. It will only be possible by taking action on all policy levels, in all companies and through the support of the consumers that the transition to a sustainable supply chain can be facilitated. To quote Koen Van Troos (Head PR and advocacy at Fairtrade Belgium) ‘connect what’s good’.
What can you do as a consumer?
At COSH! we believe, besides the necessity of law, in shifting budgets from an unethical to an ethical clothing industry. Through choosing and shopping ethical and fair fashion at your local retailer, you can contribute to a sustainable fashion industry.
