The Organisation for Economic Cooperation and Development (OECD) developed guidance on Due Diligence on Recycling Processes in the Garment and Footwear Sector (February 2026). The guidance is based on research, expert interviews and informal consultations conducted by the OECD Centre for Responsible Business Conduct.
Human Level’s Take:
- While recycling supports waste reduction circular goals, it also introduces new human rights and environmental risks that require tailored due diligence.
- The good news: companies can build on existing human rights and environmental due diligence practices, adapting them to recycling supply chains.
- The OECD highlights key risks for companies to consider in their recycling supply chains. Process-specific risks include occupational hazards (e.g., hazardous substances, heavy machinery, heat stress) and environmental harms (e.g., pollution, emissions, high energy use), alongside increasing links to criminal activity.
- These risks stem from structural factors like widespread informal work and low profit margins. Informal work can increase risks of poor working conditions and child and forced labour, while low profit margins can result in low wages and weak safety and environmental safeguards.
- While the report is geared towards the garment and footwear sector, it also offers learnings for other sectors investing in circular economy and recycling. Effective due diligence in recycling supply chains requires scoping and prioritising risks based on severity and likelihood; setting expectations for suppliers and their contractors; assessing companies’ own contributions to waste such as purchasing practices and product design; and meaningful stakeholder engagement.
- In addition, supplier capacity-building is essential to ensure that human rights and environmental due diligence cascades through the full recycling supply chain.
Some key takeaways:
- The context: The garment and footwear sector is a big driver of emissions and waste. At the same time, regulations and investor pressure are accelerating the shift to circular models, including EU policies and extended producer responsibility schemes. Many companies are turning to recycling to meet their climate and nature goals, yet it can introduce new risks to workers and the environment if not managed carefully. These risks can vary in severity and likelihood compared to risks in linear supply chains, which makes it important for companies to conduct tailored due diligence for recycling supply chains. The paper also cautions that certain approaches — like reducing overall consumption — are critical to minimise risks from the garment and footwear sector where recycling is unable to keep up. The good news is that companies don’t need to start from scratch: they can build on their existing human rights and environmental due diligence practices, including meaningful stakeholder engagement and aiming for continuous improvement. Due diligence expectations apply to all companies, though small- and medium-sized enterprises might need to adapt the recommendations in the guidance in line with their size, resources and leverage.
- Key risks and impacts to consider: The guidance outlines a number of human rights and linked environmental risks connected to recycling supply chains. There are two structural factors that can influence the severity and likelihood of these impacts. For one, the prevalence of informal work in recycling supply chains (around 80% of jobs) can increase the risk of harms like poor working conditions, forced labour and child labour. In addition, the low profit margins in recycling processes (due to their reliance on manual labour and unstable waste volumes) can limit suppliers’ ability to invest in occupational health and safety, environmental safeguards and fair wages, putting workers at further risk. The guidance also identifies several process-specific risks to consider. This includes occupational health and safety risks, for example cramped spaces, heavy lifting, exposure to hazardous substances like dust and chemicals, working with heavy machinery, heat stress and fire risks. There are also environmental risks which can also impact people. These include, for example, improper disposal or burning of textiles which impacts soil, water, air and biodiversity; emissions from transporting used textiles; and energy demands for chemical treatments and recycling, especially those which need high heat or pressure. As recycling becomes more in-demand, it is also increasingly linked to criminal activity, ranging from illegal dumping to money laundering to bribery.
- Due diligence considerations: The guidance outlines some specific considerations requiring special attention from companies conducting due diligence on their recycling ingredients supply chains. First, scope potential adverse impacts that can be connected with circular processes, prioritising impacts based on severity and likelihood. Keep in mind that this may require prioritising new areas of the supply chain, like countries where textiles are collected or recycled or business relationships that are higher risk. Second, determine whether existing policies and risk management systems need to be tailored to recycling processes, as they may currently be better adapted to traditional lines supply chains and own operations. Third, consider your relationship to adverse impacts. This includes assessing your own purchasing practices that can contribute to increased waste, like last-minute order changes, unclear product specifications and rejecting finished goods. It also involves factoring in handling and disposal costs into price negotiations, ensuring that product design doesn’t contribute to negative impacts, and assessing how post-consumer and post-industrial waste from your products is handled. Fourth, enhance your due diligence by identifying key actors in the supply chain, sharing your expectations for responsible business conduct, and building leverage with others that control key processes. This can include setting expectations for suppliers and actors in the recycling supply chain for responsible sourcing, including good labour conditions and fair and stable pricing for informal waste-pickers. It can also entail making recycled-content commitments to help stabilise recyclers’ revenue and building the capacity of supply chain actors, like training manufacturers on sorting and storing waste and preventing health and safety impacts on workers.
