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Corporate Responsibility Update nr. 6, 2024

CR
Event

  • Ronde tafel True Price – 12 november 

 Greenwashing

  • UK launches Green Claims Guide 
  • Canada adopts new ‘greenwashing’ law - Canada updates competition legislation 
  • Lululemon accused of greenwashing in class action lawsuit 
  • Italy opens greenwashing probe into Shein website 

Sector

  • ACM in pole position for supervision of abuses in production chains 
  • How is the apparel sector affected now CSDDD is here? 
  • Where is the systemic change in the fashion industry? 
  • Fast fashion: ‘We aren’t doing enough to fix the problem’– Financial Times 

Companies

  • Sweden's H&M Group ranks 3rd in climate & energy transparency report 

Legislation 

  • Will the global apparel sector agree on sustainable regulation? 
  • New EU Ecodesign Regulation in force 
  • New French government urged to rethink fast fashion taks 
  • EPR France: Re_fashion Offers Companies the Opportunity to Claim Eco-Modulation Bonuses

CIRCULAR 
Sector 

  • More and more old textiles in new denim clothing thanks to Green Deal – RVO 
  • A lot of circular legislation on the EU agenda in the next six months 
  • Levelling-up circularity in the fashion industry 
  • Dutch textile recycling company receives 70 million euros in funding 
  • EU’S share in global used clothing exports to grow: report 

CR 
Event 
Ronde tafel True Price 12 november 
Op 12 november tussen 14:00 – 17:00 organiseren we een ronde tafel voor koplopers die enthousiast zijn over true price en willen onderzoeken of en hoe dit geïncorporeerd kan worden in hun eigen bedrijfsvoering. U hoeft er niet van overtuigd te worden dat true price onmisbaar is in de transitie naar een duurzame en rechtvaardigere wereld. Uit onderzoek blijkt dat 56% van de Nederlanders positief staat tegenover het betalen van een true price. Echter is de implementatie ervan complex of – is er nog niet veel ervaring met de implementatie ervan. We zien daarom dat het bedrijven helpt om hierin samen op te trekken zoals bijvoorbeeld in de Global Partnership on the True price of Food. Dit is de eerste keer dat bedrijven in consumptiegoederen samenkomen om het gezamenlijk implementeren van true price te onderzoeken. We nodigen een beperkt aantal koplopers persoonlijk uit, u kan wat ons betreft niet ontbreken tijdens deze eerste aftrap. Het zou erg fijn zijn als u in persoon kunt deelnemen. Kunt u niet dan waarderen we het als u een van uw collega’s kunt uitnodigen. 
We hopen u te mogen verwelkomen bij deze eerste ronde tafel. Heeft u vragen over deze uitnodiging of over de ronde tafel? Neem dan contact op Claire van den Broek, Managing Director van True Price. We hopen voor 30 september van u te vernemen of u erbij bent. 

Greenwashing
UK launches Green Claims Guide 
Fashion customers are increasingly demanding products and services that do less harm to or benefit the environment. It’s important that they can make informed choices based on claims they can trust. The Competition and Markets Authority (CMA) has published this guide to help fashion businesses stay on the right side of consumer law. Drawing on lessons from our recent investigation into ASOS, Boohoo and George at Asda, we explain how you can follow the Green Claims Code when making environmental (or ‘green’) claims. 
 
Canada adopts new ‘greenwashing’ law - Canada updates competition legislation 
Mergers, greenwashing and competition are the principle focus of the latest wave of amendments to the Competition Act, with the changes receiving Royal Assent last week, reports ICLG. Read more>>

Lululemon accused of greenwashing in class action lawsuit 
Lululemon is accused of deploying misleading greenwashing tactics to make consumers think that it's more sustainable and environmentally friendly than it really is. According to a class action lawsuit filed in the US District Court of the Southern District of Florida last Friday, the Canadian athleisure brand has been taking advantage of its consumers by promoting its products, operations, and business practices as sustainable and positively impacting the environment through its "Be Planet" marketing campaign, writes FashionUnited. Read more>> 

Italy opens greenwashing probe into Shein website 
Italy’s antitrust agency has launched a probe into a company that operates Shein’s website over possibly misleading environmental claims, writes the South China Morning post. Read more>>

Sector 
ACM in pole position for supervision of abuses in production chains  
The Netherlands Authority for Consumers and Markets (ACM) is preparing for a role in the supervision of the new European duty of care, the CSDDD, which is intended to combat abuses in production chains. She is the 'least bad' potential supervisor, writesDutch Financial newspeper Het Financieele Dagblad. Read more (notice you may need a login tot read the complete article) or read the summary below.

Summary 

  • ACM to Oversee New EU Due Diligence Directive: The Authority for Consumers & Markets (ACM) is preparing to oversee the Corporate Sustainability Due Diligence Directive (CSDDD), aimed at addressing issues in production chains. 
  • Ministry Confirms ACM as Key Regulator: The Dutch Ministry of Foreign Affairs sees ACM as the main candidate for this role, with no other regulators in mind. 
  • Major Impact on Corporate Responsibility: The CSDDD is seen as a major shift in responsible business conduct, requiring companies to map their supply chains and address human rights issues. 
  • Legally Binding: Unlike previous initiatives, the CSDDD will be legally enforced, affecting businesses from 2027, starting with Dutch companies. 
  • Severe Penalties: Non-compliance could lead to fines of up to 5% of global revenue, and NGOs can take legal action against violators. 
  • ACM’s Expertise: ACM chairman Snoep believes the authority’s experience with enforcing "open norms" and overseeing green claims makes it well-suited for this role. 
  • Multiple Regulators Possible: The Ministry indicates that multiple regulators could be appointed to oversee different aspects of the directive. 

How is the apparel sector affected now CSDDD is here? 
The first phase of implementing the Corporate Sustainability Due Diligence Directive (CSDDD) could be as early as 2027 so Cascale and Worldly are urging fashion companies to start preparing their corporate due diligence programmes, writes Just-style. Read more (notice you may need a login to read the complete article) or read the summary below.

Summary 

  • Preparation Needed: Apparel companies should start preparing for the Corporate Sustainability Due Diligence Directive (CSDDD) set for implementation as early as 2027. 
  • Narrower Scope: Due to a diluted final version, many textile, apparel, and footwear brands with smaller manufacturers and suppliers may not fall directly under CSDDD's scope. 
  • Large Companies Impacted: The CSDDD primarily affects large companies that rely on complex supply chains, requiring them to address human rights and environmental risks. 
  • Key Changes: The "high-risk sector" classification was removed, meaning the textile industry won’t be targeted specifically, but sectoral guidelines will be issued. 
  • Due Diligence Obligations: Companies must integrate due diligence into risk management, assess impacts, prevent and mitigate risks, establish complaints procedures, monitor effectiveness, and communicate publicly. 
  • Consequences for Non-compliance: Failure to comply could lead to penalties, including fines up to 5% of annual turnover and civil liability for damages. 
  • Supply Chain Challenges: Fashion companies need to manage risks throughout their complex global supply chains, which could require significant time and financial resources. 
  • Digitalisation Essential: Investing in digital solutions is crucial for supply chain visibility, allowing companies to monitor sustainability performance and meet regulatory expectations. 
  • Shift in Global Supply Chains: Companies might disengage from higher-risk suppliers, particularly in countries like China, Bangladesh, Vietnam, and India, in favor of closer, more compliant partners. 
  • Proactive Measures: Apparel companies should start mapping supply chains, reviewing contracts, and gathering data on environmental and social performance to prepare for CSDDD implementation. 

Where is the systemic change in the fashion industry?  
When I was reading the book 'Man is a broiler chicken', in which writer and journalist Teun van de Keuken takes a closer look at the food industry, it reminded me several times of the fashion sector. Van de Keuken argues that it is almost impossible to escape the (ultra)processed food that is always and everywhere forced upon us. "Healthy food can't match this. It's more expensive, it's less advertised, it's available in fewer places and it's not nearly as easy and tasty as the sugar-salt-fat snacks that you eat without chewing," says Van de Keuken. A parallel with the fashion sector: consumers want to shop more sustainably, but most of the fashion items that are recommended to us are garments that are usually not produced with people and the environment in mind. It is not surprising that the latter is still the most sold (for example: Inditex, the owner of Zara, is one of the richest and most powerful fashion companies in the world), reports Dutch tradepflatform FashionUnited. Read more (in Dutch).

Fast fashion: ‘We aren’t doing enough to fix the problem’– Financial Times  
The EU’s new reforms may have limited impact until fast-fashion groups outside of Europe abide by the same manufacturing rules  Italy’s verdant Veneto region is home to luxury fashion brands and world-class textile suppliers, but it has also been plagued by environmental pollution with its watercourses poisoned by “forever chemicals”.In the 1960s, textile group Marzotto installed a research centre in the town of Trissino, where it began to produce the chemicals known as perfluoroalkyl and polyfluoroalkyl substances, or PFAS, to waterproof garments. The company, first called Rimar and then Miteni, eventually changed hands and became a supplier to the pharmaceutical and chemical industries before going bankrupt in 2018 following the water pollution scandal, but the damage to the environment will be permanent, experts say. 
 
The global fashion industry is said to be responsible for 10 per cent of global carbon emissions — more than international flights and shipping combined. Global textile fibre production has almost doubled in the two decades between 2000-2020, with a growing number of items being worn between 7 and 10 times before being thrown away, according to the Ellen MacArthur Foundation.Bags of garments at a factory in Guangzhou, in southern China, that have been made for fast-fashion group Shein.  Read more (notice you may need a login to read the complete article) or read the summary below.

Summary 

  • Italy's Veneto region, home to luxury fashion brands and textile suppliers, is facing environmental pollution due to the use of "forever chemicals." 
  • Marzotto, a textile group, produced PFAS to waterproof garments in the 1960s, leading to its bankruptcy in 2018. 
  • Long-term health effects, including increased risk of cardiovascular problems, are being felt in the provinces of Vicenza, Verona, and Padua. 
  • The fashion industry is responsible for 10% of global carbon emissions, more than international flights and shipping combined. 
  • Global textile fibre production nearly doubled between 2000-2020, with items being worn 7-10 times before being thrown away. 
  • Despite environmental damage, some argue that new European legislation will reduce the industry's environmental footprint. 
  • The fashion industry's biggest challenges include the quick wear and tear of low-quality textile items and the limited availability of fibres for reuse or recycling. 
  • Mechanical recycling, a process of sorting, washing, grinding, re-granulating, and compounding, is economically effective but limited in scope due to its limited application to wool items. 
  • Fast fashion, based on high volumes, is a major contributor to increased consumption and pollution. 
  • By 2030, 69% of global textile production will be based on synthetic fibres, with only 25% having natural origin. 
  • Durability should be the primary sustainability criteria in textiles, but it's often overlooked by green labels due to the high-volume, low-price dynamics of the sector. 
  • The EU introduced an extended producer responsibility mechanism, a right to repair directive, and legislation banning the destruction of unsold textiles and footwear from 2026. 
  • The European Fashion Alliance (EFA) supports the legislation but has highlighted problematic aspects, such as the potential for blended material production and the need for regulators to consider technological barriers and lack of sorting solutions. 
  • The EFA calls for amendments to the law to promote circularity and better define alternatives for unsold products that cannot be destroyed. 
  • Italian fashion chamber chair Carlo Capasa requests amendments to the EU's sustainability law to protect values and creativity. 
  • The industry must incentivize circularity and define alternatives like recycle and reuse for unsold products. 
  • EU institutions have been working to reduce the fashion industry's carbon and environmental footprint by making textiles more durable and reusable. 
  • Companies oppose a new requirement to declare overproduction or unsold goods due to competition concerns. 
  • The EFA proposes making such data available only to the European Commission. 
  • The fashion industry faces challenges such as quick wear and tear of low-quality textile items and limited availability of fibres for reuse or recycling. 
  • Discussions around the introduction of a Digital Product Passport, or QR code containing a garment’s textile information, are ongoing. 
  • High fashion labels and industry insiders are frustrated with the sector's targeted approach to sustainability. 
  • Younger generations' awareness of the second-hand market could help bring change. 

Companies 
Sweden's H&M Group ranks 3rd in climate & energy transparency report  
H&M Group scored 61%, placing it 3rd out of the 250 companies ranked in the report, which covers accountability, decarbonisation, energy procurement, financing decarbonisation, as well as just–transition and advocacy, writes Fibre2Fashion. Read more>>

Legislation
Will the global apparel sector agree on sustainable regulation? 
The EU is leading the way on sustainability regulation but will the rest of the world adopt the same rules or will global apparel manufacturers have to overcome disjointed requirements by region in the future? Just Style investigates.During the recent IAF and ITMF annual conference in Uzbekistan representatives from the EU, US, China and Japan provided updates on sustainability regulation. Europe is the leader of the pack when it comes to establishing and implementing sustainable regulation for the apparel industry and it applies to anyone wishing to buy or sell products within the European Union (EU, reports Just-style.com. Read more (notice you may need a login tot read the complete article) or read the summary below.

Summary 
EU leading in sustainable apparel regulation 

  • The European Union (EU) is spearheading sustainable regulations in the apparel industry, impacting anyone trading within the region. 

Ecodesign for Sustainable Products Regulation (ESPR) 

  • This key EU legislation enforces higher product durability and sustainability standards, currently being translated into apparel-specific rules. 

Digital Product Passports (DPP) 

  • EU mandates that detailed product data, including origin and production processes, be attached to every garment. 

Extended Producer Responsibility (EPR) 

  • Upcoming EU waste management regulation will hold the apparel industry accountable for its environmental impact. 

US state-specific regulations 

  • California and New York are leading sustainable regulation efforts, while the federal US lags, focusing on forced labor prevention (UFLPA). 

Japan’s Circular Economy Vision 2020 

  • Japan aims to strengthen its textile industry by 2040, with goals for circularity and improving recycling systems. 

China’s sustainability initiatives 

  • China, the world's largest apparel producer, is focusing on carbon reduction, green energy, and enhancing recycling by 2025. 

Global alignment challenges 

  • Though the EU is setting the pace, other regions like the US, Japan, and China are taking different approaches, raising concerns about fragmented regulations. 

Call for global standardization 

  • Experts highlight the need for better global engagement and collaboration across supply chains to address sustainability issues effectively. 

New EU Ecodesign Regulation in force  
The so-called 'Ecodesign for Sustainable Products Regulation' (ESPR) can be used to set requirements for the longer lifespan of products and to facilitate repair and recycling. The regulations came into force yesterday (18 July), twenty days after they were published in the Official Journal of the European Union. Among other things, the regulation should encourage companies to bring more sustainable products to the European market, and stimulate the competitiveness of frontrunners in this field, reports trade magazine Afval online.  Read more (notice you may need a login tot read the complete article) or read the summary below.

Summary

  • New Regulations: The Ecodesign for Sustainable Products Regulation (ESPR) introduces standards to extend product life and promote repairability and recycling.
  • Effective Date: The regulation became effective on July 18, twenty days after publication in the EU Official Journal.
  • Sustainable Market: It encourages companies to bring more sustainable products to the EU market and enhances the competitiveness of leaders in this area.
  • Boosting Repair & Recycling: Aims to strengthen recycling, refurbishing, and other circular economy activities, creating new job opportunities.
  • Targeted Rules: Different rules apply to various product groups like smartphones, shoes, and tires, based on scientific research and consultations.
  • Digital Product Passport: Products under the ESPR must have a scannable tag providing sustainability information.
  • Ban on Destruction: From July 2026, destruction of unsold consumer goods will be prohibited, with exceptions for small businesses and transition periods for medium-sized companies until 2030.
  • Decision Process: The final decision was made in late May after the European Council approved the ecodesign


New French government urged to rethink fast fashion taks  
Headlines globally were met with surprise when France announced political parties representing the left-wing and Macron’s centrists gained ground, just a week after it appeared to be a sure road to victory for Marine Le Pen s far-right, reports Just-style.com. Read more (notice you may need a login to read the complete article) or read the summary below.

Summary 

  • France's Political Shift: France is heading toward a hung parliament, with left, centrist, and right parties gaining ground, complicating government formation. 
  • New Popular Front: A left-wing coalition of moderate Socialists, Greens, Communists, and Melenchon’s ‘France Unbowed’ pledges to raise wages, reinstate wealth taxes, and scrap pension reforms. 
  • Far-Right Threat to Business: Euratex's president warns that a far-right win could harm European-level decision-making, making business tougher for the apparel sector. 
  • Fast Fashion Tax Controversy: France's proposed fast fashion tax, adding a levy of €5 to €10 by 2030, could drastically affect the apparel market, making it less competitive. 
  • Industry Opposition: The International Apparel Federation opposes the fast fashion tax, calling it a blunt and ineffective solution, equating it to policy "greenwashing." 
  • Uncertain Future: With the new government undecided, the fate of policies like the fast fashion tax remains in limbo. 

EPR France: Re_fashion Offers Companies the Opportunity to Claim Eco-Modulation Bonuses
Click here for more information.

CIRCULAR 
Sector 
More and more old textiles in new denim clothing thanks to Green Deal – RVO  
Thanks to the Green Deal Circular Denim, the chain is now recycling much more old jeans and other discarded textiles into new clothing. This is evident from the report Monitor Denim Deal 2020 - 2023. There was even a larger movement of brands and retailers that continue together: the Denim Deal 2.0, reports the RVO. Read more (in Dutch).

A lot of circular legislation on the EU agenda in the next six months  
The Hungarian presidency of the EU has a lot of laws to finalize in the next six months. What's on the agenda? Read more (notice you may need a login to read the complete article) or read the summary below. 

Summary 

  • EVOA Revision: Simplifies cross-border transport of waste for reuse and recycling within the EU. Parliament approved; awaiting Environmental Council approval. 
  • Ecodesign Framework: New regulation replacing the Ecodesign Directive, setting requirements for almost all physical products. Awaiting formal agreement. 
  • Packaging Regulation: A new regulation replacing the Packaging Directive is in the final approval stages by both the Parliament and the Environmental Council. 
  • Waste Framework Directive: Upcoming adjustments related to textiles and food waste. Trilogue negotiations will begin under the new Commission and Parliament. 
  • Green Claims Law: Focuses on substantiating environmental claims and preventing greenwashing. Negotiations between Parliament and Hungary’s presidency are ongoing. 
  • Microplastics: Awaiting Environmental Council's stance on reducing microplastic pollution from plastic pellets, a major source of microplastic contamination. 

Levelling-up circularity in the fashion industry  
A variety of thread spools in multiple colors, including red, blue, pink, and beige, are densely packed together with some threads loosely hanging over them.Irene Martinetti, Manager, Circular Economy, WBCSD & Elisabetta Rocchi, Associate, Circular Transition Indicators, WBCSD. The call to action is loud and clear. In May, Global Fashion Agenda’s CEO, Federica Marchionni declared: “Every company must depart from business as usual” at the Global Fashion Summit, spotlighting the need for the fashion industry to take sustainability to “the next level” to meet 2030 and 2050 sustainability targets.In the meantime, the industry continues to lose USD 460 billion annually due to a lack of recycling and garments thrown away in landfills (UNEP, 2023); and, USD 65 billion in apparel exports remain at risk due to climate-change related events including flooding and extreme heat (BoF and McKinsey, 2023), reports WCBSD. Read more>>

Dutch textile recycling company receives 70 million euros in funding  
Eindhoven-based RE&UP Recycling Technologies, part of the Sanko Group, has received 70 million euros in funding from France's Proparco to scale up textile recycling. The company reports this on its LinkedIn page, writes FashionUnited. Read more (in Dutch).

EU’S share in global used clothing exports to grow: report  
The share of European Union in global used clothing exports is estimated to continue growing in the next few years as collection rates continue to rise. Currently, EU accounts for over a third of global used clothing exports, as per a report by the United Nations Economic Commission for Europe (UNECE) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), writes FashionatingWorld. Read more>> 

 
 

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