Key Takeouts - OECD Forum on Due Diligence in the Garment and Footwear Sector
As promised here are my key takeouts from the OECD Forum on Due Diligence in the Garment and Footwear Sector, Paris 2020.
It was my first time attending an event at the OECD; I was extremely impressed with the venue, setup and broad range of stakeholders that participated. It will be fixed in my diary each year for the future.
The event was held under Chatham House Rules. So the information below is not attributable to any participant.
Summarised key points from Angel Gurría, OECD Secretary-General:
Total greenhouse gas emissions from textiles production are 1.2 billion tonnes annually (more than the emissions of all international flights and maritime shipping combined). Emissions are expected to increase by 60% by 2030 to 2.8 billion tons.
Today, the average person buys 60% more items of clothing, compared to 15 years ago; yet keeps them for about half as long.
We consume over 100 billion items of clothing a year, and the global apparel and footwear industry is predicted to generate 102 million metric tons of products by 2030. At this rate, by 2050, the fashion industry will use up a quarter of the world's carbon budget.
27% of all fashion sales now take place online. The global online fashion market is predicted to reach USD 765 billion by 2022, that's an increase of 58% from last year.
As tensions in global trade encourage companies to seek new markets, it is imperative to understand the impact that increased production has on the environment, on outsourcing and on the use of contract workers.
We need to re-think business models in the garment and footwear sector to ensure that it contributes to the circular economy.
In the garment and footwear sectors, youth are increasingly concerned about the carbon footprint of the products they buy and wear.
Innovation in production processes can create value by helping to find alternatives to conventional chemical use, and reduce energy and water use, as well as waste.
The need to continue strengthening the role of governments in driving sustainable and responsible supply chains and creating an enabling environment for RBC.
We must ensure that companies engage meaningfully with workers through due diligence. In this respect, social dialogue is integral to responsible business conduct.
China Coronavirus - With China being the world's largest garment producer (CMT) and a massive producer of fabrics and trims the impact of the Coronavirus in the garment industry is enormous. Responsible businesses must quickly asses the impact on workers and production, react promptly and plan for further disruption. One question that was discussed at the conference was, would workers get paid while the factories are closed due to the outbreak? The problem was also reported recently on Bloomberg https://www.bloomberg.com/news/videos/2020-02-20/china-coronavirus-death-toll-rises-to-2-118-video
Trade Tensions - Really interesting to hear about the impact of the US-China trade war in the global garment sector. Businesses have to carefully manage moving production from country-to-country as mass-movement of manufacturing impacts workers as factories exceed production capacity leading to excessive overtime and poor quality production. Also not to forget managing a responsible and timely exit from the original manufacturing location.
Freedom of Association & Collective Bargaining - More significant than ever to allowing workers to join a union, organise and negotiate wages and more. Note the excellent work that the ACT initiative has carried out to-date on achieving a living wage in the sector through collective bargaining linked to brands purchasing practices. It is great to see the increase of Global Framework Agreements with IndustriALL.
Living Wages - Continues to headline Ethical Trade. Fantastic to see that Investors are showing genuine interest in how companies address non-payment of living wages in the global supply chains. Significant update from Platform Living Wage Financials at the event.
Purchasing Practices - Much more progress in this area than in previous years. Businesses now realise the effects of their actions and how they negatively impact workers, lead time, quality and costs.
Gender - As women make up the majority of workers in the garment industry, there is some excellent gender-specific work on tailoring approaches in all areas including investigations, education, capacity building and reporting.
Bangladesh Accord - Further updates on transition to the RMC and plans to continue efforts to improve conditions in the garment sector in Bangladesh. The Accord has set a president on how active focus and collaboration can dramatically enhance a country-specific garment sector. It is such a shame that the trigger for such focused efforts only came after the tragic deaths of so many workers in the collapse of Rana Plaza building in 2013. There were discussions on how the Accord might operate in other countries such as India.
Audit and Standards Fatigue - Really interesting how global companies such as Walmart are reverting back to independent audits rather than using in-house teams. There are far too many different accreditation schemes, Code of Conducts, approaches, methodologies and reporting. The costs of numerous audits get passed through the supply chain to the end-consumer; this is not to mention the disruption caused to manufacturing on the days when audits take place. Glad to see another organisation (Social & Labour Convergence) trying to combine the many different standards into a straightforward approach.
Transparency - It continues to grow in importance with many organisations going beyond Tier 1 and tier 2 locations. Consumers and other stakeholders are continually wanting more visibility of where their garments are made and under what conditions. Technology is starting to play a significant role within tracing raw materials to end consumer, with fascinating technology combining DNA and blockchain.
SDGs - More and more organisations are aligning their responsibility programmes with the UN Sustainable Development Goals, which provides the structure for businesses to focus on peace and prosperity for people and the planet.
Worker assessment, education and reporting tools - Much more focus in the use of technology to allow practical tools to engage workers and enable detailed reporting for stakeholders. With some garment sourcing countries, workers may have low literacy levels, so the use of videos to educate and communicate effectively, which is a fantastic move on from traditional methods. The use of technology provides an excellent means of scaling the reach of any worker-focused programme. Quizrr gave an excellent presentation on how this technology can be used.
Legislation - Attended a presentation which sets out details of a new ILO convention on Violence and harassment (C190). The Convention aims to protect workers and other persons in the world of work, including employees, as well as persons working irrespective of their contractual status, persons in training, including interns and apprentices, workers whose employment has been terminated, volunteers, job seekers and job applicants, and individuals exercising the authority, duties or responsibilities of an employer. The Convention applies to all sectors, whether private or public, both in the formal and informal economy, and whether in urban or rural areas. The standard is awaiting ratification, and then it will be adopted by governments around the globe. An important note, however, as with any standards, the importance is on how it is applied, governed and effectively managed.
Chemical Management -There continues to be significant progress in chemical management within the garment sector with a focus on the input, process and output of all chemicals used to produce garments. Great work by amfori, giz and ZDHC on engaging with key stakeholders to educate and provide the necessary tools to manage chemicals within supply chains.
Thank you for reading. If you would like further information on the topic contained within my blog, please let me know.