A Sustainable Textile Industry

Our key takeaway: The global textile industry is intricately interconnected, with buyers, suppliers, workers and smallholders in various countries responsible for different segments of the value chain. This makes it challenging for companies, rightsholders and the public to have full visibility of the value chain and this obscurity creates an ecosystem conducive to adverse human rights and environmental risks and impacts. Companies, for instance, can impose unfair purchasing terms on suppliers and suppliers have no choice but to absorb the losses for fear that buyers will switch suppliers. These losses are then transferred to workers in the form of low wages below living wages and incomes. Workers may then be forced to work excessive hours to feed themselves and their dependants which has significant health and safety impacts. Thus, the power imbalances of global textile chains enforces and exacerbates existing structures of inequality such as poverty and gender disparity. While this report primarily makes policy recommendations, there are also actions companies can take. These include 1) Using the UN Guiding Principles and its human rights due diligence framework (HRDD) to address adverse human rights and environmental risks and impacts; 2) Incorporating purchasing practices and sourcing strategies into their HRDD assessment; and 3) Leveraging or building influence to enforce living wages and incomes as the baseline standard in the textile industry. The report also underscores the importance of engagement with affected stakeholders and responsible disengagement.‍

Fair Trade Advocacy Office and Fashion Revolution released a White Paper on Fair Thread: Policy Recommendations for a Sustainable Textile Industry (July 2023):

• Companies are connected to human rights and environmental abuses in the textile industry: The report highlights how the garment value chain is structured in a way that obscures adverse human rights and environmental impacts. The global value chain is interconnected and brings together a “complex web of parties” - from the cotton fields to factories - who are situated in different countries. The lack of transparency means that consumers do not have the visibility to hold brands and retailers accountable for the harm they have caused to people and planet. The power imbalance between brands and other stakeholders exists beyond the company-consumer nexus to include the company-supplier relationship. Brands have significant buying power and can unilaterally impose unfair trading practices on suppliers such as “buying at prices below the cost of production, unilateral changes to agreed contracts, late changes in lead times, and cancelling (semi-) produced garments.” Suppliers have no choice but to absorb these losses because of the real possibility that the buyer will move to a different supplier if the supplier raises these issues. This will directly impact workers’ human rights: “[T]he factory does not have enough financial space to invest in safe working conditions, sustainable production methods or living wages for its workers.” In short, companies’ unfair purchasing practices are one of the root causes of human rights abuses prevalent in the textile industry.
  

• Living wage and living income are crucial to addressing human rights abuses: The report highlights living wage and living income as a way to address poverty; one of the root causes of adverse human rights and environmental impacts in the garment industry. The report differentiates between living wage and living income: living wage refers to wage earners and allows workers to “provide for themselves and their dependants’ basic needs - including food, housing, education and healthcare as well as some discretionary income for unexpected events”; and living income refers to smallholder farmers and the “income they derive from their production, which needs to meet the needs of their household as well as their farm needs, including those of their dependents.” Workers in the garment industry do not earn enough to earn a living wage or living income, which means they are unable to meet their and their dependants’ basic needs necessary for an adequate standard of living. What are companies doing about this? Very little. The report states that “96% of brands do not disclose the number of garment workers that are paid a living wage in their supply chain.” Most companies also “do not check whether their purchasing prices allow their suppliers to pay their workers a living wage.” What can companies do? They can use “their leverage to contribute to a living income in value chains.”
  

• The interconnection between human rights, the environment and climate change: The report makes a clear connection between adverse human rights and environmental impacts: “Over 8,000 synthetic chemicals are used in the fashion manufacturing process, some of which are harmful to health and the environment.” Despite this, companies are not required to conduct HREDD across their value chains; although this is set to change with upcoming regulations like the CSDDD. The report also highlights how climate change is “posing an immediate, wide scale and irremediable threat” based on the UNGPs severity of impacts (salience) assessment. Extreme weather patterns leads to reduced yields and revenues which means that producers “don’t have the financial space to invest in climate adaptation, leading to even more losses the next season.” As a result, producers are forced to take out high-interest loans and debts, which has led to some taking their own lives. What can companies do about this? Companies can: 1) “Assess and address the adverse human rights and environmental impacts of their purchasing and pricing practices, as well as their business models, as part of their due diligence obligation”; 2) Assess the extent of their own contribution and put in place prevention, mitigation and remediation measures such as “[fair] purchasing practices and living wages and incomes that would allow suppliers to move to more sustainable business models and smallholder farmers to transition towards future proofed sustainable agricultural practices”; 3) Conduct meaningful stakeholder engagement to “identify effective ways to respond to affected stakeholders’ needs and concerns”; and 4) Fall back on responsible disengagement as the last resort if mitigation has failed.