OECD: regulations in response to aspirations for sustainability

On the 16th and 17th of February, Abit representatives, through Texbrasil (Brazilian Textile and Fashion Industry Industrialization Program) — the result of a partnership between Abit (Brazilian Textile and Apparel Industry Association) and ApexBrasil (Brazilian Trade and Investment Promotion Agency) were present at the Organization for Economic Cooperation and Development (OECD) Forum, on the Due Diligence Guide in the apparel and footwear industry.

Available in Portuguese since a year ago, the Guide serves as an instrument for responsible business conduct along the value chain of companies of the apparel and footwear industry. Annually, the Forum of global character brings together representatives of States, companies, unions and civil society to analyze the progress in the implementation of the Guide, as well as to address emerging risks in the industry in different countries.

The scenario in which the meeting took place this year is that of European countries establishing mandatory due diligence for companies in the industry. That is, from a determined revenue level, companies will have to check how they act responsibly in their value chain, in the most varied topics of the sustainability agenda and how good practices are being guaranteed. 

An equivalent directive in the European Community is being prepared and relevant pressures are felt for the transformation that the industry needs in terms of the sustainability agenda. However, the process is including a lot of debates so that the implementation may not be exclusive and that the responsibility may not be transferred only to the producers.

Living wages and Partnership

On the other hand, there are many uncertainties on how to address issues that impact people’s real life, such as the guarantee of living wages in producing countries that do not even have minimum wages established by law for workers. Additionally, a scenario where retail prices are falling and causing a reduction in the amounts paid per piece to suppliers must be taken into account. Pressuring only for the increase of wages could put the supply chain at risk. As solutions, highlight the importance of reviewing business models, having responsible purchasing practices, improving productivity and establishing joint actions.

Partnership was another topic highlighted at the Forum, especially in the panel that gave emphasis to the importance of collaboration in relations between buyers and suppliers. There are brands that have invested millions of dollars in the adaptation of health and safety issues in their production chain, however, they are still held accountable for a more responsible attitude in relation to purchasing practices that directly impact the guarantee of compliance – breaches of contracts, cancellations of orders and late payments end up harming the workers, since they are directly affected when this occurs. Producers hope that the authorities will include this issue in the legislations that have been drafted. 

In addition to the aforementioned points, specialists understand that it would be important to advance in contracts in which the responsibility for risk management in relation to human rights is shared, including costs of implementation. What is currently seen, in most relationships, are commitments established in the supplier’s code of conduct, in which contractual responsibility is weighed only on one of the parties.

Brazil at an advantage in the sustainability agenda

Circularity, greenwashing and the guarantee of rights in high-risk countries were also topics addressed in the panels. There was sharing of initiatives that represent advances in collaboration formats between different players, but there are also evidences that, without regulations, it will be difficult to achieve more equitable competitive conditions for producers and brands that want to progress in their practices.

The governments of developed countries, which intend to lead this agenda, will be the protagonists in this apparel and footwear industry that will increasingly be regulated. As a result, both voluntary initiatives and markets and value chains will have to be reorganized and find ways to respond to the aspirations for a fairer and more sustainable society. In this reorganization, it is possible that there may be an interesting space for production of countries like Brazil, which are more regulated on social and environmental issues than many of their competitors in these markets. 

In order not to miss the opportunity to position Brazil through its sustainable development initiatives in the fashion industry, the Texbrasil Program held a Side Session, with the support of the OECD, on 02/13/23, even before the start of the Forum, with the topic  Ecossistema Brasileiro de Moda Sustentável: resultados e perspectivas de projetos colaborativos bem-sucedidos (Brazilian Sustainable Fashion Ecosystem: results and perspectives of successful collaborative projects). The recording is available, for those who are not able to follow it live, and is recommended due to the importance of the topic.

About Texbrasil

The Brazilian Textile and Fashion Industry Internationalization Program (Texbrasil) works together with companies in the textile and apparel sector in the development of strategies to conquer the global market. Over 21 years, it has helped around 1800 brands to get on the export trail, doing US$ 9 billion in business. The Program is carried out through a partnership between Abit and the Brazilian Trade and Investment Promotion Agency (ApexBrasil).