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The Lectra Observatory—dedicated to innovation and transformation within the fashion industry, among other things—has identified the key regulations and proposals governing traceability and transparency within the sector.
“Regulations are crucial, as they encourage the implementation of more sustainable practices and create common standards,” Maria Modroño, chief marketing and communications officer at Lectra, said. “By mapping the most advanced transformations, whether they are already in force or in the process of being implemented, the Lectra Observatory has fulfilled its objective of analyzing key transformations and helping Lectra customers and our ecosystem partners successfully adapt to them.”
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In its latest white paper, “Mapping of global traceability and transparency regulations for sustainable fashion,” Lectra outlines 22 current and future regulations in North America, Europe and Australia. The paper is structured into three major categories: due diligence, information duties and market entry barriers.
Due Diligence
In 2018, the Organization for Economic Cooperation and Development (OECD) defined “due diligence” as a tool for the Responsible Business Conduct, defining it as “the process through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts.”
In recent years, Lectra said, a more specific tool has emerged: Corporate Sustainability Due Diligence. This materialized to help companies avoid “adverse impacts” on the environment, workers, human rights, bribery, consumers and corporate governance due to their operations. The new “risk screening” is more demanding, considering its scope expands beyond companies’ own organizations and subsidiaries, reaching into their supply chains.
“With this new approach, companies are entrusted with a whole new set of responsibilities, reaching beyond their own organizations and businesses, into their entire value chain and other potential business relationships,” the paper said.
While the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD’s Due Diligence Guidance for Responsible Business Conduct promote due diligence, they haven’t been binding. However, they have served as “catalysts” for adopting regulations.
“For fashion companies, this lawmaking wave means more time and expertise spent on tracing risk factors throughout their manufacturing and sales operations—foreseeing critical yet challenging homework in an especially opaque and widespread value chain,” Lectra said. “In other words, fashion players throughout the planet will need to equip themselves with traceability solutions—the cornerstone to sustainable due diligence and information reporting.”