Pulling the thread: responsibility in the supply chain of the textile and fashion industry.
In the last decade, the supply chains of organizations have undergone a major transformation due to globalization and different business strategies, such as outsourcing, just-in-time delivery and lean inventories, in the interests of greater competitiveness.
The risks associated with an organization’s supply chain include the so-called ESG (Environmental, Social and Governance) risks.
The textile and fashion industry, as in many other industries, has understood the need to manage its suppliers in a sustainable manner and minimize environmental risks (such as emissions, waste and discharge of toxic substances) and social risks (employment of low-wage workers in developing countries, particularly with respect to working hours and safety, as well as the use of child labor).
There is also a need to focus on reducing the ESG risks associated with the supply chain, as highlighted by the OECD, covering at least the following steps:
- Identification and evaluation of the environmental and social risks inherent in the business activity pursued by suppliers and in the country such activity is pursued.
- Integration of environmental and social aspects in the initial selection and certification of suppliers.
- Action plan to ensure suppliers comply with basic environmental and social management requirements, offering training and awareness programs in line with their needs.
- Environmental and social monitoring and audits of critical or high-risk suppliers.
Garrigues Environmental Law Department